Bott v. Gravier
- Donovan Frank
- 0:24-cv-00524
- U.S. District Court · District of Minnesota
- 19
In Bott v. Gravier, Judge Frank granted in part the Botts’ temporary restraining-order motion, barring specified corporate changes while the case proceeds.
Tim Bott, Joy Bott, Robert Gravier, Candy Gravier, Allan Block Corporation, and people acting for or with the Graviers are affected. The order temporarily preserves Tim Bott’s employment role and specified corporate responsibilities.
What happened
In Bott v. Gravier, minority shareholders Tim Bott and Joy Bott sought an emergency order against majority shareholders Robert Gravier and Candy Gravier concerning Allan Block Corporation. They argued that the Graviers were violating agreements by changing the company’s board, shifting Tim Bott’s responsibilities, and attempting to end his employment agreement.
The court found that the Botts were likely to prove that the Graviers breached the agreements by making those changes without the required approval of holders of 85% of the company’s shares. The court also found a risk of harm that money could not adequately repair and concluded that the balance of harms and the public interest favored preserving the existing arrangement.
Judge Frank granted the motion in part. The Graviers and those acting with them may not terminate Tim Bott’s 2016 employment agreement, expand Allan Block’s board or appoint Bill Holden to it, or assign Tim Bott’s financial, corporate, and legal responsibilities to Robert Gravier. No bond was required, and the order also recognized Tim Bott’s retention of counsel for Allan Block as controlling while the temporary order remains in effect.
The detailed version
- Bott v. Gravier · No. 0:24-cv-00524
- Donovan Frank
- Mar. 22, 2024
Background
Tim Bott and Joy Bott jointly owned approximately 20% of Allan Block Corporation’s shares. Robert Gravier and Candy Gravier jointly owned approximately 80%. Tim Bott was Allan Block’s president and a board member; Robert Gravier was its chief executive officer and also served on the board.
The dispute involved the 1997 Stock Transfer Agreement and Tim Bott’s 2016 Executive Employment Agreement. Section 10.3 of the stock agreement required written consent from holders of more than 85% of Allan Block’s shares for specified corporate actions, including amending the bylaws, amending the agreement, entering or amending certain employment agreements, and making certain distributions.
The Botts alleged that the Graviers violated those agreements by attempting to terminate or change Tim Bott’s employment status, expand Allan Block’s two-member board to three members, appoint Bill Holden to the board, and transfer responsibility for material financial, corporate, and legal decisions from Tim Bott to Robert Gravier. At a February 7, 2024 meeting, the Graviers’ votes totaled approximately 80%, and the Botts voted against expanding the board and appointing Holden. Robert Gravier nevertheless proceeded with those actions.
The Botts filed claims including breach of contract and declaratory judgment and moved for a temporary restraining order. The parties also disputed which lawyers properly represented Allan Block. The court noted that the Botts had represented that Allan Block faced only the declaratory-judgment claim and had agreed to amend the complaint accordingly.
Temporary Restraining Order
A temporary restraining order is short-term emergency relief intended to preserve existing conditions until the court can consider further injunctive relief or decide the case. The court considered the likelihood of success, irreparable harm, the balance of harms, and the public interest.
Irreparable Harm
The court found that the Botts faced irreparable harm without an order preserving the status quo. Tim Bott had been president for eight years, his duties included all material business matters involving financial, corporate, and legal decisions, and Allan Block had maintained a two-member board for 27 years. The court concluded that the Graviers’ attempted changes risked harm to Allan Block’s reputation, lost business opportunities, and dilution of the value of the Botts’ ownership interests.
Likelihood of Success
The court found that the Botts were likely to succeed on their breach-of-contract claims. It concluded that they were likely to show that the Graviers breached Section 10.3 of the 1997 stock agreement by:
- Increasing the size of Allan Block’s board without the required 85% shareholder consent;
- Adding Bill Holden to the board without that consent and without the vote required to fill a board vacancy; and
- Changing the terms of Tim Bott’s 2016 employment agreement by transferring his responsibility for material financial, corporate, and legal decisions to Robert Gravier.
The court also found that the attempted transfer of those responsibilities likely breached the 2016 employment agreement. Because the Botts were likely to succeed on their contract claims, the court did not consider the alternative grounds they offered under Minnesota Statutes § 302A.751 and their claims for breach of loyalty and breach of good faith and fair dealing.
The court also concluded that the Botts were likely to succeed on their related request for a declaratory judgment concerning the board expansion, Holden’s appointment, the transfer of responsibilities, and the authorization of an employment agreement for Robert Gravier.
Other Factors and Bond
The court found that the balance of harms favored an injunction because the order would preserve the existing arrangement and any harm to the Graviers would be minimal. It also found that the public interest favored enforcing valid contracts. The court required no bond because it found that the temporary relief would not harm the defendants.
Counsel for Allan Block
Because the temporary order preserved Tim Bott’s responsibility for all material financial, corporate, and legal decisions, the court held that Tim Bott’s retention of counsel for Allan Block governed.
Order
The court granted the Botts’ motion for a temporary restraining order in part. The Graviers, their agents, employees, attorneys, and people acting with them were restrained from:
- Terminating Tim Bott’s 2016 Executive Employment Agreement; - Expanding Allan Block’s board or appointing Bill Holden to it; and - Assigning financial, corporate, and legal decision-making responsibility to Robert Gravier.
The temporary restraining order remains in place until the court decides a motion for a preliminary injunction or the parties stipulate to continue it until final adjudication. No bond is required.
Read the full 19-page opinion on CourtListener, the free public archive maintained by the Free Law Project.