We’re off to a quick start for 2017 - In case any of our readers are worried that they've seen the last of greedy (and hair-brained) executives, check out Judge Jed Rakoff’s recent US District Court-SDNY opinion on Vista Outdoor, Inc. v. Reeves Family Trust, Michelle Wilkens, Jeremy Wilkens and Kyle Reeves.
You can't read the first paragraph of Judge Rakoff’s verdict and decision without taking keen interest, and without having an incredible laugh at the “gross mopery” of the defendants (slang definition of “mopery” from my home-town Chicago PD pals – “it’s like being arrested for exposing yourself to a blind person”).
Judge Rakoff so wonderfully notes in the preamble of the Court’s decision:
“Why would the executives (and former principals) of a paddle-board division of a sports and recreation company cause the company to make a one-time $60,500 purchase of one million stickers that the executives themselves immediately attempted to repurchase from the company for approximately $4 million?
The answer is that they thereby hoped to stick the company with a $10 million “earn-out” payment to the executives, thus netting themselves a cool $6 million.
Thanks, however, to the age-old “doctrine of good faith and fair dealing”, and similar legal protections, in the end it is these executives who are stuck.”
You’ve simply got to applaud Judge Rakoff, and ask yourself - what might have been going through the minds of the defendants??…..
