Tuesday, April 9, 2013

Michael–Curry Cos., Inc. v. Knutson Shareholders Liquidating Trust case brief

Michael–Curry v. Knutson Shareholders case brief summary
423 N.W.2d 407

Appellant company sought review of an order from a trial court (Minnesota), which denied the company's request for a temporary injunction to prevent respondent trust from making a distribution of funds to its trustee instead of indemnifying the company for losses it assumed when it purchased a construction company from the trust.

-The company purchased a construction company from the trust.
-The amended purchase agreement stated that the trust would only assume liability for claims arising from projects that were completed prior to the sale.
-The agreement also stated that the trust was to unconditionally guarantee a total profit of a certain sum on the unfinished projects.
-The company discovered that a letter of credit to the trust had been reduced, leaving a large sum available for distribution to the trust's beneficiaries.
-The company filed an action for a temporary injunction of the distribution alleging that it had expenses related to the construction company's projects that exceeded the value of the trust's assets. -The trial court denied the injunction and the company sought review.

-The court found that the trial court abused its discretion in finding that no irreparable harm would have resulted from the distribution, that the company had an adequate remedy at law, that attachment of the trust's assets by the company would have been impossible, and that the company met its burden of showing that it probably would have succeeded at trial on the merits.

OUTCOME: The court reversed and remanded the trial court's order.

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