Lori Koch retains control of Holiday World after suitOctober 4, 2013
By NATHAN BLACKFORD
Evansville Courier & Press
INDIANAPOLIS — Lori Koch, vice president of Holiday World & Splashin’ Safari, has won another court decision in a battle with her brother-in-law over control of the Spencer County amusement park.
The Indiana Court of Appeals, in a 3-0 decision Thursday, ruled Koch can retain her majority shares of Koch Development Co., or KDC, which owns and operates Holiday World.
That affirms a ruling handed down in December by Judge Carl Heldt in Vanderburgh Circuit Court that Lori Koch did not have to sell shares formerly owned by her late husband and Holiday World President Will Koch to his brother Dan Koch.
Dan Koch, who owns 40 percent of KDC, had appealed Heldt’s ruling by Heldt, claiming a purchase agreement required Lori Koch to sell her stock after her husband’s death. But the court of appeals affirmed that because Dan Koch had materially breached the terms of that agreement, it was no longer binding.
Thursday’s 31-page ruling, written by Judge Paul D. Mathias, is occasionally harsh in its criticism of Dan Koch. Mathias wrote that while the judges “regret seeing a family divide itself over an internal business dispute,” the evidence supported the trial court’s conclusion.
Holiday World, which opened as Santa Claus Land in 1946, was originally owned by Louis J. Koch. His son William Koch Sr. later took over operations. Shares of the business were then divided among William Koch’s five children.
By 2002, only three siblings — Will, Dan and Natalie — still owned stock. They signed a share purchase agreement that provided existing shareholders the opportunity to purchase the stock of any shareholder who died. Natalie sold her shares to her brothers in 2009, leaving Will as the majority shareholder with 60 percent of the company and Dan 40 percent.
When Will died in 2010, Lori was appointed the personal representative of his estate. Lori soon sent Dan a letter expressing a desire to keep Will’s shares. Dan also sought to waive the requirements of the purchase agreement.
Dan took over as Holiday World’s president and CEO following Will’s death. He also sought to increase his annual salary as the president of KDC to more than $1 million. Lori objected to the higher salary, and Dan then sought to buy her shares.
Lori and Dan disagreed about the share price, with Dan offering $26.6 million and Lori asserting the correct figure should be $32.1 million. Dan also claimed a setoff of $2.67 million, citing a promissory note owed to KDC by Will.
Heldt had cited minutes from a July 7, 2009, shareholders meeting, which support Lori’s claim for a higher purchase price. Heldt also found that the promissory note should not have been used as a setoff, because it had not yet matured. Further, Heldt ruled that Dan and KDC had not paid enough cash upfront.
In his appeal, Dan argued that Will’s estate never could have reasonably expected to keep the shares under the purchase agreement, and that the trial court erred in not allowing him to purchase the shares at the higher price.
Mathias called that claim “an absurdity,” pointing out that under Dan’s position, he could have offered to purchase Will’s shares for $1 per share and the estate still would be obliged to sell, with its only remedy being a suit for damages plus interest.
“Dan’s position would make it possible for a party who has materially breached the agreement to avoid the consequences of its behavior by requiring the nonbreaching party to still perform under the contract,” Mathias wrote.
Dan also had argued that the intent of the purchase agreement was to keep control of Holiday World within the Koch family. Mathias wrote that the agreement did not include this specific language, and also noted that Lori and her children are members of the Koch family.
Holiday World released this statement after Thursday’s ruling: “Holiday World has flourished over the decades thanks to the dedication of three generations of Koch family members. As we move forward, we will continue to embrace our cornerstones of safety, service, friendliness and cleanliness as we add new attractions and entertain families for generations to come.”
Attorney James Johnson of Rudolph, Fine, Porter and Johnson LLP in Evansville is among those representing Dan Koch. Johnson said he had no comment on the appeals court decision at this time.
More on DuboisCountyHerald.com
Indiana State Police Superintendent Douglas Carter promoted Senior Trooper Brock Werne and...
A Friday night report of an accident south of Huntingburg resulted in a Lake County man’s arrest.
Elsie Keller of Portersville spent many nights in her recliner with a laptop on her lap...
Indiana Conservation Officers are investigating a boat fire that started on Patoka Lake this...
Monday’s solar eclipse has created a buzz while raising a galaxy’s worth of questions....
A call for suspicious subjects drinking and using drugs at Walmart resulted in a Florida woman's...
The Rotary Club of Jasper named Tonya Heim the 2017 ATHENA Award winner Thursday.
The newest additions to the St. Meinrad Archabbey’s grounds aim to further blossom the...