- 20 -
shares, and certain methods of financing. If GNN desired to sell
more than 50 percent of its stock to a third party, Griffin could
compel GNN to compel the third party to purchase Griffin's shares
on the same terms. The Stockholders' Agreement also did not list
a due date for payment of the ultimate purchase price, an exact
purchase price, or the right for GNN to sell Griffin's stock
interest or receive profits attributable to Griffin's stock
interest. In addition, the Stockholders' Agreement did not refer
to the 1981 transaction as a sale, and we know, from reading the
agreement repeatedly, that the parties thereto knew how to use
the various forms of the verb "to sell" when they wanted to.
Nor do we find much of the traditional indicia surrounding a
debtor/creditor relationship to support GNN's position that it
was a debtor of Griffin to the tune of at least $31.5 million.
We find no promissory note evidencing the purported debt, no
security, no fixed price, and no stated interest. Indeed, if we
were to accept GNN's position that Griffin sold GNN net assets of
$21.5 million in 1981 for a deferred payment of $31.75 million
that was payable at the earliest on July 1, 1989, we would be
finding that the interest rate on GNN's debt was a mere 5.2
percent compounded daily.4 We decline to find such a low
4 We use the following formula to compute this rate of
interest: F = P(1 + i/n)ny, where "F" is the future payment
($31.75 million), "P" is the principal of the loan ($21 million),
"i" is the annual interest rate (5.2%), "n" is number of times in
a year that interest is compounded (365), and "y" is the number
(continued...)
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011