Two business partners who built a successful commercial cleaning company and sold it for over $20 million in 2012 disputed the distribution of sale proceeds and allocation of profits.
The plaintiff challenged the validity of shareholder amending agreements signed in 2002 and 2009 that altered profit-sharing arrangements for newly established divisions.
The court found the agreements valid and enforceable but determined the defendant breached the agreements by unilaterally calculating the allocation of sale proceeds using revenue rather than profit as the basis, and by failing to involve the company's chartered accountant as required.
The court awarded the plaintiff $405,199 representing the overpayment to the defendant from the improper allocation methodology.
Claims regarding salary allocations were dismissed as statute-barred.
