The opinion of the court was delivered by: Sue E. Myerscough, U.S. District Judge:
Tuesday, 15 May, 2012 04:56:41 PM
Clerk, U.S. District Court, ILCD
This matter comes before the Court on Plaintiff Robert Alan Davis' Motion for Temporary Restraining Order and Preliminary Injunction (d/e 2) ("Motion"). For the reasons that follow, the Motion is GRANTED IN PART.
On April 30, 2012, Plaintiff filed a Verified Complaint (d/e 1) (Complaint) against Defendants Bob W. Richter ("Richter"), David M. Kaylor, Steven W. Kaylor, Richard E. Kaylor, Earnest Kaylor (collectively "the Kaylors"), and Valley Land & Cattle Company ("Valley Land"). The two-count Complaint alleges breach of contract and seeks specific performance and declaratory relief. In the Motion, Plaintiff seeks a preliminary injunction and temporary restraining order ("TRO") prohibiting Defendants Richter, David Kaylor, Steven Kaylor, Richard Kaylor, and Earnest Kaylor from proceeding with the sale, purchase, or transfer of Earnest Kaylor's shares in Valley Land to any and all parties pending resolution of Davis' claims and from selling or otherwise transferring any shares of Valley Land currently owned by Defendants.
The Complaint (signed under penalty of perjury by Plaintiff's counsel) explains that Plaintiff, Richter, and the Kaylors are shareholders in Valley Land, a farming operation in Quincy, Illinois. Plaintiff alleges that the Kaylors were employed by Valley Land from 2000 to 2007. Plaintiff alleges that, in 2007, the Kaylors terminated their employment with Valley Land and began working for a separate company owned and operated by Richter but failed to inform Plaintiff that the Kaylors had terminated their employment with Valley Land. Further, Plaintiff alleges that from 2007 to 2009, the records of Valley Land incorrectly reflected that the Kaylors were still employed by Valley Land.
On February 10, 2000, Plaintiff, Richter, and the Kaylors entered into an Agreement Regarding the Shares of Valley Land & Cattle Co., Inc. ("Agreement"). Under the terms of the Agreement, which is attached to the Complaint, Plaintiff, Richter, and the Kaylors agreed to certain restrictions regarding their ownership of shares in Valley Land. Section 6 of the Agreement provides that the occurrence of certain events, including the termination of employment by a shareholder who is also an employee of Valley Land, creates a mandatory obligation to purchase one or more shares from another shareholder. Section 4 of the Agreement requires a shareholder whose shares are subject to a mandatory purchase obligation to give notice to Valley Land and the other shareholders upon the occurrence of an event triggering the mandatory purchase obligation.
According to Section 7 of the Agreement, the mandatory obligation to purchase such shares is first assigned to Plaintiff. Under the Agreement, if Plaintiff does not purchase the shares, then Valley Land has a mandatory obligation to purchase the shares. If Valley Land does not purchase the shares, then the remaining shareholders are required to purchase the shares according to the percentage of total shares owned by the remaining shareholders.
The purchase price for the shares is to be determined according to Section 13 of the Agreement, which states that "the value of shares shall be the book value of such shares as determined on the last day of the month immediately preceding the event requiring valuation, subject to the adjustments and rules set forth in this Agreement."
Plaintiff alleges that on December 8, 2011, Earnest Kaylor sent a letter to all other shareholders of Valley Land notifying them that he was "voluntarily resigning [his] employment with [Valley Land]." The letter also stated that "pursuant to the [Agreement] that [his] twelve (12) shares are subject to mandatory purchase by [Davis] according to the terms and conditions of the Agreement." On December 13, 2011, Davis responded to Earnest Kaylor's notice, by handwritten note, stating that he wished to exercise his option to purchase all of Earnest Kaylor's shares in Valley Land.
In March 2012, Plaintiff discussed the mandatory purchase obligation with Richter and learned from Richter that the Kaylors had actually terminated their employment with Valley Land in 2007.
Defendants notified Plaintiff that he must pay $798,251.28, as purchase price for Earnest Kaylor's twelve shares, to Earnest Kaylor on May 1, 2012. Defendants stated to Plaintiff that if Plaintiff does not pay the requested amount, Plaintiff will be in breach of the ...