Alston & Bird secured a unanimous decision from the New York Appellate Division, First Department, affirming the claim by MSI Management Services former CEO Teri Martin that retirement did not cause the forfeiture of her shares in the company’s stock.
After 42 years at MSI, a closely held corporation in the business entertainment sector, Martin decided to retire, offering to sell her stock to other shareholders. The remaining shareholders tried to prevent her from retiring by arguing that, under the shareholders’ agreement, she would automatically forfeit her shares if she stopped working. The relevant contractual provision read: “[S]o long as [Martin] is a shareholder, she shall serve as CEO.”
In Martin v. Abrams Trust, the New York appeals court upheld a trial court’s decision, finding that the contract’s language did not address what happened to a retiring shareholder’s shares. In affirming the trial court’s order in Martin’s favor, the appeals court confirmed Alston & Bird’s client’s right to distributions and shares worth millions of dollars.
Representing Martin was an Alston & Bird team led by partners Scott Schirick and Joe Tully and associate Emma Braden (Business Litigation).