V&E Secures Texas Supreme Court Victory for Herring Bancorp
The Texas Supreme Court has ruled in favor of Herring Bancorp, Inc. and bank executives C.C. Burgess and C. Campbell Burgess in a long-running dispute over the redemption of preferred shares held by John Mikkelsen as part of the bank’s conversion into a Subchapter “S” Corporation.
briefing on the merits, on January 26, 2018, the high court denied a petition
for review filed by Mikkelsen challenging an Amarillo Court of
Appeals decision reversing his trial court victory and an award of
more than $127,000 in attorney’s fees against Herring Bancorp. The case is now
set to return to the trial court to consider Herring Bancorp’s claim for
dispute began in 2008, when Mikkelsen filed suit claiming that Herring Bancorp
had breached its Articles of Incorporation by failing to redeem his preferred
shares properly two years earlier. Mikkelsen also asserted minority oppression
and breach of fiduciary duty claims against C.C. Burgess and C. Campbell
In 2011, the state
trial court granted Mikkelsen’s motion for partial summary judgment on his
breach of contract claim related to the validity of the 2006 redemption. In
light of that ruling, Herring Bancorp again redeemed Mikkelsen’s preferred
shares in 2013 to cover what he allegedly was owed under the Articles of
In January 2015,
after a three-day jury trial, the jury awarded Mikkelsen more than $23,000 in
compensatory damages based on its findings that C.C. Burgess and C. Campbell
Burgess engaged in oppressive conduct, and it awarded Mikkelsen more than
$127,000 in attorneys’ fees through trial plus $55,000 in conditional appellate
fees based on Mikkelsen’s breach of contract claim. The trial court entered
judgment in June 2015, which included a declaratory judgment in favor of
Mikkelsen that the 2006 redemption and the 2013 tender were invalid.
and the Burgesses engaged V&E to take the lead on post-trial motions and
the appeal. The trial court denied Herring Bancorp and the Burgesses’
post-trial motions. Herring Bancorp and the Burgesses then filed an appeal.
Mikkelsen also filed a cross-appeal on certain evidentiary issues.
In a complete
vindication for Herring Bank and the Burgesses, the Amarillo Court of Appeals
held that both the 2006 redemption and the 2013 tender were valid under the
terms of the Articles of Incorporation and issued a declaratory judgment to
that effect. The court of appeals also rendered judgment against Mikkelsen on
his minority oppression, breach of fiduciary duty, and attorneys’ fees claims.
The V&E team includes partners Tom Leatherbury and Manuel
Berrelez and senior associate Stephen Gilstrap.