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1992. The loan agreement contained various covenants restricting
petitioner’s ability to alter its business practices without
previous approval from the bank.
Also in 1992, in furtherance of his continuing efforts to
explore investment opportunities for petitioner, V. Eihusen
considered having petitioner pursue a joint venture equity
investment in Russia (Russia project). Members of the board
became concerned that pursuing the Russia project could cause
petitioner to breach one or more of the covenants spelled out in
the loan agreement.
2. Removal of V. Eihusen and Its Immediate Aftermath
On March 5, 1993, the board held a special meeting (meeting)
at which it removed V. Eihusen as petitioner’s chairman and CEO
and elected R. Eihusen to these positions. At this time V.
Eihusen remained one of petitioner’s directors, shareholders, and
employees. Also at the meeting, the board elected R. Eihusen,
Linda M. Berney, Barbara J. Saladen, and David Schocke as the
sole members of the administration committee (ESOP committee) of
the Employee Stock Ownership Plan (ESOP) of Chief Industries,
Inc. Petitioner had established the ESOP and the related trust
in 1976 and had appointed First National Bank of Omaha (First
National) to serve as trustee.
Commencing at the meeting and continuing afterward, V.
Eihusen and the board engaged in a prolonged struggle over
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