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We note first that in the Settlement Agreement, the parties
were not just settling the Cook County Lawsuit (i.e., the pending
appeal of the arbitrator’s award of $15,030,000 for the shares).
They were also settling the Lake County Lawsuit in which Mr.
Polsky had advanced claims of considerably higher values for his
shares. The claims for a higher value for the Indeck shares in
the Lake County Lawsuit were based, inter alia, (i) on Mr.
Polsky’s theory that he was entitled to the shares’ value as of
June 1, 1993, due to his wrongful termination12 (which value he
estimated to be $55 million), and (ii) on the higher of the
third-party offers for Indeck’s stock, namely, the CMS Generation
offer of $750,000 per share (or $22.5 million for Mr. Polsky’s 30
shares), which had not been presented to the arbitrator.13
Second, the settlement was prompted by developments in the Lake
County Lawsuit, not the Cook County Lawsuit. Settlement
discussions were initiated by Indeck when the presiding judge in
the Lake County Lawsuit, after hearing the first witness’s
testimony, expressed his view that Indeck may have failed as a
matter of law to meet its obligations to Mr. Polsky under the
12 In this regard, it bears noting that the portion of the
arbitrator’s award finding that Mr. Polsky’s termination had been
in violation of the terms of the Employment Agreement was
confirmed by the Cook County Circuit Court, and that portion of
the decision was not appealed by Indeck.
13 One of Indeck’s own attorneys testified herein that
Indeck’s exposure in the Lake County Lawsuit was significantly
greater than in the Cook County Lawsuit.
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