...and found that the company erred in several ways, namely "...by suspending Tate, filing the lawsuit against him and in deciding the funding mechanism for the $15 million expansion.". Yet Tate still remains in contempt of the TRO and subject to punishment if the company presses for the order.
What this means is that Tate's refusal to participate in board meetings invalidated the above decisions made by the board without his presence. This is the legal equivalent of putting "two in the chest" of the company. Until the Court can resolve a method for the company to proceed, Tate doesn't have to burn the place down, but rather simply refuse to participate.
This is the legal equivalent of holding your breath. By absenting himself, Tate has accomplished a stalemate, with the objective that either the board chairman or Tate himself will have to go. Until that is decided the company is effectively frozen in place.
The most important paragraph:
In recognition of this self-destructive end game the company seemed the most reasonable, stating:"Production is set to begin by October 2015, but the dispute between Tate and the board threatens the day-to-day operations of the popular spirits manufacturer."
But it appears that Tate and his attorney may be willing to do just that:“It is our hope that Mr. Tate will participate and engage with the rest of his co-owners,” Armstrong said. “He has the ability to cripple the company if he won’t.”
In the beginning Tate was accused of saying in effect "I'd rather see the place burn down if I can't run it". Which is an excellent reason why children shouldn't be allowed to play with matches..."“My guess now, based on the ruling, is a lot of the lawsuit is going to go away because a lot of those issues will be resolved,” Clouston (Tate's atty) said. “The goal is to figure out what is left and what is the best way to get to the end game. But the parties still will have to sit down and everybody be reasonable and come up with a resolution or we will fight forever.
Flat Ass Bottom Line
The end result is nothing new. Tate if nothing else has been consistent from the beginning. By forcing a virtual shutdown, he has improved his bargaining position only in the sense that time is now of the essence for both parties. The company has the investors and I suspect more than enough funds to buy him out; I'm not at all sure the reverse is true. Thus it would appear the more likely outcome will be based on whether Tate will accept a reasonable offer and his freedom, or whether his demands will be high enough to put the company out of business.
Without the ability to perform day to day operations, both are in big, big trouble. Although part of the lawsuit will disappear, unless Tate acts reasonably and soon, the litigation will center on the company seeking a Court order to force his participation (which I see as the most likely). If the Court orders him to attend his own board meetings, he will quickly lose his non-participation bargaining chip, will be outvoted, and he'll find himself back in the soup.
The company is far from helpless, and it's well to understand that winning a battle may result in losing the war.
This is NOT good news for our new members, so very sorry for you...
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FWIW, not a word from the STR8-boyz..
http://www.wacotrib.com/news/business/j ... b3b90.html