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Creamery Association (Danish Creamery), another cooperative also
represented by Bidart. The Danish Creamery plaintiffs are not
petitioners in this case.
The coordinated proceedings included four other lawsuits.
One was a single suit brought by Knudsen and certain affiliates
and subsidiaries, known at the time as K.F. Dairies, Inc.
Another was also a single action brought by parties (known as the
F.D. partners) who had sold their stock in Foremost to Knudsen
and had received security interests that were subordinated to
those of the banks.
In addition, Citicorp filed separate cross-complaints
against K.F. Dairies, Inc., and the F.D. partners for
indemnification. Citicorp's suit against K.F. Dairies was based
on claims stemming from the loan and security agreement between
Citicorp and Knudsen. Its suit against the F.D. partners was not
based on contract but on a theory of equitable indemnity.6
6 The related suits were conditionally settled in an
agreement dated Aug. 23, 1990. The settlement was subject to
various conditions and events in the future. Unlike the
situation of the milk producers settlement of Aug. 13, 1990, this
settlement required the approval of the bankruptcy court.
One contingency in the Aug. 23 agreement was the banks'
obtaining releases by the milk producer plaintiffs of their
claims as unsecured creditors of the bankruptcy estate, in return
for an assignment by Knudsen of its causes of action for breach
of fiduciary duty against its individual directors and officers.
The agreement called for a plan of reorganization of Knudsen
and its affiliates to be jointly proposed by all the various
parties (not including the milk producers), reflecting an agreed
division of the remaining assets in the estate. When the
(continued...)
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