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public offering of PMI stock would violate the terms of the fran-
chise agreements between Pizza Hut and PMI.
PepsiCo's actions2 in preventing the public offering
adversely affected the value of petitioner's PMI stock. Also,
petitioner suffered personal emotional distress as a consequence
of PepsiCo's actions. Further, the damages to petitioner's
business reputation caused by PepsiCo resulted in petitioner's
suffering personal financial setbacks in ventures unrelated to
his investment in PMI.
In May 1988, petitioner, as a shareholder of PMI, and his
children, as shareholders of PMI, brought a civil action against
PepsiCo,Pizza Hut, PMI, and other PMI shareholders. Petitioner
alleged that he suffered damages as a result of Pizza Hut's
refusal to allow the public offering to go forward. Specifi-
cally, petitioner made three claims against Pizza Hut and
PepsiCo. First, petitioner alleged that PMI and PepsiCo had
entered into agreements, after petitioner had transferred his
sole proprietorship restaurants to PMI, which restricted PMI's
right to "go public" and that the agreements between PepsiCo and
PMI constituted a breach of obligations owed to petitioner as a
third-party beneficiary under the original agreements between
Pizza Hut and PMI. Second, petitioner urged that Pizza Hut be
2By the spring of 1986, PepsiCo had purchased all of the
stock of Pizza Hut, and Pizza Hut became a wholly owned
subsidiary of PepsiCo.
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