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Rapistan Corp. v. Michaels

511 N.W.2d 918, 203 Mich. App. 301 (1994)

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Rapistan Corp. v. Michaels

Michigan Court of Appeals
511 N.W.2d 918, 203 Mich. App. 301 (1994)

Facts

Lear Siegler Holdings (Lear) acquired Rapistan (plaintiff), a manufacturer and seller of conveyor equipment. William Michaels, Michael Tilton, and Stephen O’Neill (collectively, the officers) (defendants) were part of the management team of Rapistan until their resignations on September 6, 1988. The officers subsequently signed employment agreements with Alvey Holdings, Inc. (Alvey), a manufacturer of conveyors and palletizers that was recently acquired by another company, for the purposes of acquiring Alvey. Lear sued the officers, alleging they breached their fiduciary duties, misappropriated a Rapistan corporate opportunity, and misappropriated and misused confidential Rapistan information. The trial court ruled in favor of the officers, holding that Alvey was for sale to the officers as individuals, the acquisition of Alvey was not essential to Rapistan, and Rapistan did not have a reasonable expectancy in Alvey. Rapistan appealed, arguing the trial court erred by not addressing whether Alvey’s acquisition was desirable to Rapistan, by finding that the acquisition was not essential and that Rapistan did not have a reasonable expectation, and lastly, by substituting its judgment for Rapistan’s judgment regarding how important Alvey was to Rapistan.

Rule of Law

Issue

Holding and Reasoning (Per curiam)

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