COA affirms dissolution of corporation embroiled in family dispute

A company owned by two brothers – one disabled and one terminally ill – was properly dissolved by the trial court over the disabled brother’s objections, the Indiana Court of Appeals held.

Timothy and Randall Enders inherited Enders & Longway Builders Inc. from their father in the 1980s and each owned 50 percent of the company. They had a buy-sell agreement, which strictly limited their ability to transfer their shares of the company and provided that upon the death of one brother, his shares passed automatically to the surviving brother, unless, among other occurrences, the corporation was dissolved.

Timothy Enders stopped actively working for the company around 2004 because of a disability but had some of his bills paid by the company. Randall Enders continued to work until he became terminally ill in 2012. Randall Enders sought to dissolve the corporation because it was no longer profitable. Timothy Enders told his brother to “get out of bed” in order to make the company profitable.

Randall Enders filed a petition for a judicial dissolution of the corporation, alleging that the directors and shareholders were deadlocked in the management of corporate affairs. The trial court retroactively granted the dissolution effective the date of the hearing, even though Randall Enders had died the day after the hearing and before the court ruled.

The business’s accountant Mark McNamee testified at trial about the company’s lack of profits, that Timothy Enders hadn’t performed any services for the company since 2004, and the deadlock between the brothers over dissolving the company disadvantaged shareholders and directors.

“In short, the evidence before the trial court established that the corporation was no longer profitable because of Timothy’s disability and Randall’s terminal illness. Consequently, the business of the corporation could no longer be conducted to the advantage of the shareholders, who were deadlocked as to whether to dissolve the corporation. Accordingly, under these circumstances, we cannot say that the trial court erred when it dissolved the corporation,” Judge John Baker wrote in Timothy S. Enders and Enders & Longway Builders, Inc. v. Debra Sue Enders as Personal Representative of the Estate of Randall Enders, 71A03-1211-PL-494.