Corporate – Stock redemption – Appraisal

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Where three plaintiffs who entered into stock redemption agreements have filed a complaint over the purchase price of their shares, the defendants should be awarded summary judgment because (1) the parties agreed that an independent appraisal of value would be final, (2) the plaintiffs have not mustered any evidence that one of the defendants breached its contractual obligations under the agreements and (3) neither defendant owed the plaintiffs any fiduciary duties.

“Giner, Inc., is a Boston-based research and development firm that works in the electrochemical technology industry. Giner sold one of its subsidiaries in 2020. As part of this transaction, Cortney Mittelsteadt, Hector Maza, and Monjid Hamdan ended their employment with Giner and became employees of Plug Power, Inc., which required these Plaintiffs to sell their shares in Giner. Andrew Belt remained with Giner and became its CEO.

“The Plaintiffs entered into Stock Redemption Agreements that established the terms under which Giner would repurchase their shares. The Purchase Price consisted of specified percentages of: (i) the proceeds Giner was to receive from selling Giner ELX to Plug Power; (ii) the Adjusted Valuation of Giner’s remaining assets other than its interest in a company called 1A Smart Start LLC, as determined by a binding appraisal conducted by a third-party valuation advisor; and (iii) any future proceeds that Giner may receive from selling its equity interests in Smart Start.

“Plaintiffs claim that Giner and Belt improperly interfered with the third-party valuation of Giner’s assets — and that Giner thereby breached the Agreements, Giner and Belt breach their fiduciary duties, and Belt committed tortious interference with contractual relations (the ‘Valuation Claims’). They also claim that Giner committed a further breach of contract by not paying the Plaintiffs shares of a later distribution by Smart Start (the ‘Smart Start Claim’).

“The Court will allow Defendants’ motion for summary judgment in their favor on all claims. The Valuation Claims fail because the parties agreed that the independent appraisal of value would be final, Plaintiffs have not mustered any evidence that Griner breached its contractual obligations under the Agreements, and neither Griner nor Belt owed the Plaintiffs any fiduciary duties. The Smart Start Claim fails because the summary judgment record establishes that the challenged distribution from Smart Start did not arise from any sale of Giner’s Smart Start equity interests. …

“Most of Plaintiffs arguments are thinly-veiled and impermissible attempts to challenge the accuracy of the independent appraiser’s ultimate conclusion. The Stock Redemption Agreements provide that the results of the independent valuation ‘will be binding on both parties;’ they bar Plaintiffs from challenging ‘the valuation or the preparation thereof.’ Plaintiffs may not do indirectly, through a claim for breach of contract against Giner or a claim for tortious interference against Belt, what the Agreements bar them from doing directly. …

“Defendants are entitled to summary judgment on the claim for breach of fiduciary duty for two, independent reasons. …

“First, Plaintiffs have mustered no evidence showing that Giner or Belt owed any fiduciary duty to the Plaintiff shareholders. …

“In any case, even if Giner or Belt owed a fiduciary duty to the Plaintiffs (which they did not), Giner’s obligations in repurchasing shares of stock from the Plaintiffs are defined by contract. As a result, Plaintiffs may sue only for breach of contract and may not also seek to hold Giner or Belt liable for breach of fiduciary duty. …

“Defendants’ motion for summary judgment is allowed. Final judgment shall enter stating that, this matter having come before the court (Ricciuti, J.) on an anti-SLAPP motion to dismiss the counterclaim and then come before the court (Salinger, J.) and a motion for summary judgment on Plaintiffs’ claims, it is ordered and adjudged that (1) Defendants’ counterclaim is dismissed with prejudice pursuant to G.L.c. 231, §59H, and Defendants (if they have not already done so) shall pay the stipulated amount of $17,000 in attorneys’ fees, and (2) Plaintiffs shall take nothing on any of their claims.”

Maza, et al. v. Giner, Inc., et al. (Lawyers Weekly No. 09-094-25) (14 pages) (Salinger, J.) (Suffolk Superior Court) (Docket No. 2184CV01915-BLS2) (June 2, 2025).

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