Reference no: EM131765105

Atlas Food Systems, Inc., based in California, was a food vending service that provided refreshments to factories and other businesses. Atlas was a closely held corporation. John Kikkas was a minority shareholder of Atlas. Alexi Kikkas was the majority shareholder. An agreement among the corporation and shareholders required the corporation to buy the shares of a shareholder at fair market value, but only upon the shareholder’s death. Throughout most of Atlas’s history, Alexi was the chairman of the board, which included John as a director. In 2005, while John was the president of the firm, the board and shareholders decided to convert Atlas to an S corporation. A few months later, however, Alexi, without calling a vote, decided that the firm would not convert. In 2006, a dispute arose over Atlas’s contract to buy certain property. John and others decided not to buy it. Without consulting anyone, Alexi elected to go through with the sale. Within a few days, under Alexi direction the Board by majority vote voted to terminate John’s role as president and employee. Two months later, Atlas offered to buy John’s interest in the firm for almost $2 million. John refused, believing that his interest was worth twice that. John filed a suit in state court against Atlas and Alexi, seeking, among other things, a dissolution of the corporation or a judicially required buyout of John’s shares. Might John succeed? Why? If John succeeded, at what price?