On appeal from the Superior Court of New Jersey, Chancery Division, Union County, Docket No. C-136-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Fuentes, Gilroy and Simonelli.
Defendants Emanuel Georgiadis (defendant) and Geoman Corporation (Geoman), d/b/a Echo Queen Diner (the diner), appeal from the March 20, 2009 Chancery Division order confirming the sale of the diner to Thrilos Realty, LLC, and from the April 1, 2009 order denying their motion for an order granting defendant the right to purchase the interest of plaintiff George J. Georgiadis in Geoman. We affirm.
Plaintiff and defendant are brothers and sole shareholders of Geoman, whose assets consist of the diner and the property on which it is situated in Mountainside. Although the parties once co-managed the diner, defendant had operated it exclusively since 1990, when plaintiff left to operate a diner in Connecticut. Following the sale of the Connecticut diner in 1999, defendant rebuked plaintiff's request to return to work at the diner.
On March 15, 2005, plaintiff filed a complaint, alleging that he was an oppressed minority shareholder pursuant to N.J.S.A. 14A:12-7, and that Geoman was irreconcilably deadlocked. Plaintiff sought to dissolve the corporation, sell its assets and distribute the proceeds between him and his brother.
Defendant alleged in a counterclaim that he owned two-thirds of Geoman's stock, and he sought equitable adjustments for an $836,000 promissory note the corporation allegedly issued to him in lieu of wages, and for repayment of a $30,000 loan to the corporation, which was used to pay corporate expenses.
After a bench trial, on March 29, 2007, the trial judge issued a written decision, concluding that the parties were equal shareholders in Geoman, plaintiff was an oppressed minority shareholder, and defendant was not entitled to equitable adjustments. By order of April 20, 2007, the judge ordered that
If within ninety days of the date of this order a buy out by defendant of plaintiff's shares of stock in [Geoman] is not agreed on by the parties, [Geoman] shall be dissolved and the court shall appoint a receiver to effect the sale of the corporate assets and distribute the proceeds of the sale of those assets fifty percent (50%) to plaintiff... and fifty percent (50%) to defendant[.] Defendants appealed. We affirmed in an unpublished opinion. Georgiadis v. Georgiadis, No. A-5136-06 (App. Div. Apr. 30, 2008).
By order of November 5, 2007, the judge dissolved Geoman and appointed a receiver to effect the sale of the corporation and distribute the proceeds equally between the parties. On February 5, 2008, the judge ordered the receiver to "immediately" effect a sale of Geoman's assets and distribute the proceeds equally between the parties. The judge also permitted defendant to "remain in possession and operate the diner while a buyer is sought with the consent of the receiver."
On November 19, 2008, Thrilos Realty submitted a contract to purchase the diner and property for $1,350,000. On March 5, 2009, the receiver filed a motion to confirm the contract and to permit him to proceed with the sale and distribute the proceeds to the parties. A week later, defendant offered to purchase plaintiff's interest in Geoman for $412,255. After plaintiff rejected the offer, defendant filed a cross-motion for an order granting him the right to purchase plaintiff's interest in Geoman "for the amount plaintiff would receive if a sale to a third party was consummated, with all applicable deductions taken therefrom, including the $30,000 representing cash loans... made to the corporation."
On March 20, 2009, the court granted the receiver's motion, concluding as follows:
There was... an attempt in 2007 to prevent the kind of issue that we have before us now but the court did address it then, recognized that... the defendant, had been the operator of the... business and that because of his status, might want to ...