Piedmont Publishing Co. v. Rogers

Piedmont Publishing Company (Piedmont) (plaintiff) and Mary Pickford Rogers (Pickford) (defendant) both applied for a television station license. Piedmont and Pickford feared that a competing station would capture the television audience while they fought each other for the license. Accordingly, Piedmont and Pickford formed a new corporation, Triangle Broadcasting Corporation (Triangle), to apply for the license together. When another radio station also applied for a license, Triangle paid the radio station to withdraw its application. Triangle won the license and an exclusive local contract with National Broadcasting Company. In a written agreement, Piedmont bought two-thirds of Triangle’s stock, and Pickford bought the remaining third. The agreement gave Piedmont an option to purchase Pickford’s stock at the end of certain fiscal years, at a price to be determined by a formula applied by Triangle’s regularly employed accountants. The formula provided for Piedmont to purchase Pickford’s stock for an amount based on the total book value of Triangle’s common stock, adjusted for annual depreciation with a limitation regarding the depreciation charged against Triangle’s tangible assets, and Triangle’s average net annual profits. Piedmont exercised its option and tendered the purchase price computed by the accountants. Pickford did not transfer her shares and claimed the purchase price Piedmont tendered was inadequate. Piedmont sued Pickford for specific performance and declaratory relief. The trial court agreed with Piedmont. Neither Triangle’s accountants nor the trial court included goodwill in total book value as used in the formula. Pickford appealed.