The Ultimate Umbrella Company, Inc. v. Parker

Summary

Our firm represented The Ultimate Umbrella Company, Inc. (Tuuci) in high-stakes shareholder litigation. A 2006 shareholder agreement granted Tuuci the right to redeem the shares of minority shareholders when they ceased to work for the company, with the redemption price calculated using fixed formulas linked to book value and a multiple (5x or 6.5x) of net income, depending on the circumstances of the separation. In 2021, Tuuci exercised this contractual right. The minority shareholders refused to comply, insisting that the redemption rights had expired and demanding nearly double the price set in the agreement. Tuuci initiated arbitration to enforce its rights.

After a nine-day trial in which twelve witnesses testified and more than 475 pieces of evidence were presented, a three-member arbitration panel issued a unanimous 43-page final award. The panel granted Tuuci the repurchase of the minority shareholders’ shares and rejected all counterclaims, including the claim for compulsory purchase at inflated valuations.