Preview
73-CV-23-9522
Filed in District Court
State of Minnesota
12/5/2023 2:03 PM
STATE OF MINNESOTA DISTRICT COURT
COUNTY OF STEARNS SEVENTH JUDICIAL DISTRICT
______________________________________________________________________________
John Thomas, Jr., Case Type: Contract
Plaintiff, Court File No. ________________
vs. JURY TRIAL REQUESTED
Daniel Brady, Robert Warzecha,
Jeffrey Haversack, Countryside Packaging &
Equipment, Inc., and W&B Holdings, LLC,
Defendants.
______________________________________________________________________________
COMPLAINT
______________________________________________________________________________
Plaintiff John Thomas, Jr. (“Plaintiff” or “Thomas”) as and for his Complaint against
Defendants Daniel Brady (“Brady”), Robert Warzecha (“Warzecha”), Jeffrey Haversack
(“Haversack”), Countryside Packaging & Equipment, Inc. (“Countryside”), and W&B Holdings,
LLC (“W&B Holdings”) (collectively, the “Defendants”) hereby states and alleges as follows:
The Parties
1. Plaintiff Thomas is a natural person residing at 7398 West Old Sauk Road,
Middleton, Wisconsin 53562.
2. Upon information and belief, Brady is a natural person residing at 19378 Two
Rivers Road, Avon, Minnesota 53610.
3. Upon information and belief, Warzecha is a natural person residing at 490 River
Street West, Holdingford, Minnesota 56340.
4. Upon information and belief, Haversack is a natural person residing at W5428
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Keystone Road, Elkhart Lake, Wisconsin 53020.
5. Upon information and belief, Countryside is a Minnesota corporation with its
principal place of business at 19378 Two Rivers Road, Avon, Minnesota 53610.
6. Upon information and belief, W&B Holdings is a Minnesota limited liability
company with its principal place of business at 19378 Two Rivers Road, Avon, Minnesota 53610.
Jurisdiction and Venue
7. This Court has subject matter jurisdiction pursuant to Minn. Stat. § 484. 01.
8. This Court has personal jurisdiction over Defendants Brady and Warzecha
because they reside and do business in the State of Minnesota. This Court has personal
jurisdiction over Countryside because Countryside is a Minnesota corporation with its principal
place of business in the State of Minnesota that does business in the State of Minnesota. This
Court has personal jurisdiction over W&B Holdings because it is a Minnesota limited liability
company with its principal place of business in the State of Minnesota that does business in the
State of Minnesota. This Court has personal jurisdiction over Haversack and all Defendants
because (a) Plaintiff’s claims involve causes of action that arose in Stearns County, Minnesota;
(b) Defendants own, use, or possess real or personal property situated in the State of
Minnesota; and (c) Defendants transact business within the State of Minnesota.
9. This action is properly venued in Stearns County pursuant to Minn. Stat. § 542.09
because: (a) Defendants Brady and Warzecha reside in Stearns County, Minnesota; (b)
Defendants Countryside and W&B Holdings have an office, registered agent, or business place
in Stearns County; and (c) Plaintiff’s cause of action, or some part thereof, arose in Stearns
County, Minnesota.
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Factual Allegations
10. Thomas and Haversack met while working together for a former employer.
11. Haversack introduced Thomas to Warzecha while Thomas and Haversack were
working together. Haversack knew Warzecha from having made sales to Warzecha and his
company while Thomas and Haversack were working for their former employer.
12. Warzecha eventually introduced Thomas and Haversack to Brady, and proposed
forming a business venture whereby Thomas, Haversack, and Brady would provide their time,
experience, skills, relationships, and resources within the industry to identify and help the
business venture enter into future distribution agreements with various companies, and
Warzecha would run the day‐to‐day operations of the business venture.
13. Brady, Warzecha, Haversack, and Thomas entered into an agreement, whereby
the four of them agreed to establish, become partners of, and become co‐owners of a new
business for the purpose of distributing cook‐in film and other products to companies including
(a) a company with whom Brady had a prior relationship; and (b) Hormel Foods, Inc. and its
affiliates, such as Dan’s Prize, Inc., with whom Thomas had a prior relationship.
14. Brady, Warzecha, Haversack, and Thomas agreed to own, control, and split the
profits of the new business in the following percentages:
(a) Warzecha: twenty‐eight percent (28%);
(b) Brady: twenty‐four percent (24%);
(c) Haversack: twenty‐four percent (24%); and
(d) Thomas: twenty‐four percent (24%).
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15. Thomas and the Defendants agreed that Warzecha would take a larger
percentage of ownership, control, and profits (28% rather than 24%) to compensate Warzecha
for managing the day‐to‐day operation of the new business venture.
16. Thomas, Haversack, Warzecha, and Brady agreed that Warzecha and Brady
would take responsibility for the formation of the new business for the benefit of each of the
four founders (including Thomas) without immediately issuing Haversack or Thomas any formal
shares while Thomas and Haversack contributed to the new business behind the scenes. The
parties agreed that after Thomas and Haversack eventually quit their jobs, Warzecha and Brady
would later issue formal shares to Haversack and Thomas upon request. The parties agreed that
while Thomas and Haversack each would be 24% partners and owners of the new business,
however structured, they would not officially reflect Thomas and Haversack as owners of the
new business until Thomas and Haversack quit working for their employer and requested
official documentation of their ownership. The parties agreed that Warzecha and Brady would
hold Thomas’s 24% share of the business on his behalf and that Thomas would be entitled to
24% of the profits of the business regardless of formal designations or the issuance of shares.
17. Brady was never able to negotiate a distribution agreement between the parties’
new business venture and a company with whom Brady had a prior relationship.
18. On behalf of the parties’ business venture, Thomas successfully identified
business opportunities to sell cook‐in film to Hormel Foods, Inc. or one of its affiliates, such as
Dan’s Prize, Inc., and helped negotiate agreements with them for the new business.
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19. On behalf of the parties’ business venture, Thomas used his relationships with
vendors who could supply Hormel Foods, Inc. and/or Dan’s Prize, Inc. with specialized cook‐in
film, and helped negotiate agreements with them for the new business.
20. Thomas’s experience in the industry allowed him to successfully negotiate the
appropriate pricing for the parties’ new business venture to enter into a distribution agreement
with food packaging suppliers and Hormel Foods, Inc. and Dan’s Prize, Inc.
21. Later, when the United States imposed restrictive tariffs on Chinese imports,
Thomas was instrumental in recognizing the need for additional vendors to supply Hormel
Foods, Inc. and Dan’s Prize, Inc. with food packaging products and establishing such vendors.
Upon information and belief, the food packaging vendor that Thomas was able to substitute for
the Chinese vendor is the current food packaging vendor that Countryside currently utilizes.
22. Thomas was instrumental to the startup of the new business and without him
the new company would have had no chance of landing deals with Hormel and its affiliates.
Thomas provided his time, “sweat equity,” experience, skills, insights, resources, relationships,
goodwill, and other contributions, including but not limited to, his relationships with key
suppliers, negotiating distribution agreements between the new company and those key
suppliers, and arranging for new distribution agreements with other manufacturers with similar
products, to improve the sales and profitability of the new business venture. Thomas would not
have made these investments and contributions but for the promise of receiving 24% of the
ownership of the new business and 24% of the profits of the new business.
23. After leaving his job, Thomas requested that Brady and Warzecha officially
reflect Thomas as an owner of the new business and pay Thomas his accumulated 24% of the
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profits of the business. Brady and Warzecha told Thomas that the attorney that formed the
corporate entity had the paperwork ready for Thomas to sign, noting his ownership interest in
the new business venture, leading Thomas to believe that they would comply with Thomas’s
requests and never claimed that Thomas was not an owner or partner of the new business.
24. In or around February 2019, Brady disclosed to Thomas that Brady and Warzecha
had formed Countryside as the corporate entity under which the new business was being
operated. Brady also disclosed to Thomas that Brady and Warzecha had formed W&B Holdings
as a limited liability company to hold real property for the new business. Brady showed Thomas
two documents that indicated Brady and Warzecha were reflected in the official corporate
records as the sole owners of Countryside and W&B Holdings.
25. Thomas was somewhat surprised about the formation of the second business
entity, W&B Holdings, but understood from Brady that Brady and Warzecha formed it to hold
real estate for the parties’ new business venture and to lease out space to Countryside.
26. In or around April of 2019, Thomas asked Brady and Warzecha for the 2016,
2017, and 2018 tax returns of Countryside and W&B Holdings, to have his name listed as an
official owner of Countryside and W&B Holdings, and to receive his 24% of the profits of both
Countryside and W&B Holdings, as previously agreed upon by all parties.
27. Thomas never received the 2016, 2017, or 2018 tax returns of Countryside and
W&B Holdings, but instead, was given a one‐page document that listed the net income of
Countryside and W&B Holdings.
28. In or around November of 2019, the parties agreed that Thomas would fly to
Minnesota from South Carolina so that they could meet at the office of attorney Daniel T.
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Zimmerman, the attorney who incorporated Countryside and W&B Holdings, to officially reflect
both Thomas and Haversack as owners of Countryside and W&B Holdings.
29. On November 6, 2019, when Thomas got to Minnesota, Brady and Warzecha
took Thomas to a restaurant in Rice Lake, Minnesota, instead of the attorney’s office. The
meeting that occurred between Brady, Warzecha, Haversack, and Thomas at that restaurant
consisted of mostly social conversation over a meal. Thomas eventually asked if they would be
going to the attorney’s office after lunch and they said “no.”
30. On November 6, 2019, at the restaurant, Brady, Warzecha, and Haversack told
Thomas they wanted to buy him out, without offering a specific price. Thomas asked Brady and
Warzecha what they were willing to offer Thomas to buy him out. Brady and Warzecha said
they would have to finish their 2019 taxes in order to provide an offer and indicated they would
not be able to make an offer until February or March of 2020.
31. On November 6, 2019, after Brady and Warzecha left the restaurant, Thomas
and Haversack remained at the restaurant for a while and spoke privately. Thomas asked
Haversack if he had received his 24% ownership interest in Countryside. Haversack told Thomas
no, but that he was still working for Countryside. Thomas told Haversack that he was not
comfortable with what Brady and Warzecha were proposing.
32. After the meeting in the restaurant on November 6, 2019, Thomas flew home to
South Carolina. Shortly thereafter, he notified Brady, Warzecha, and Haversack that he was not
comfortable waiting until March of 2020 to receive a buyout offer.
33. On or about December 2, 2019, the attorney for Defendants Countryside and
W&B Holdings, Daniel T. Zimmerman (“Attorney Zimmerman”), sent Thomas a draft proposal
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to pay him the sum equal to 24% of the combined asset values of Countryside and W&B
Holdings as determined effective December 31, 2019 net of 2019 taxes owed, in exchange for
the mutual release and settlement of all claims between the parties. The proposal did not
include a specific purchase price, but was dependent on figures to be prepared by Defendants’
accountant and received prior to April 15, 2020.
34. On December 3, 2019, Warzecha forwarded an e‐mail with an attachment from
Defendants’ corporate accountant. The attachment provided the net income of Countryside for
the years 2016, 2017, and 2018, and the net income of W&B Holdings for the year 2018, but did
not include any more information.
35. On December 6 and 7, 2019, as a shareholder of Countryside and a member of
W&B Holdings, Thomas sent an e‐mail to Warzecha to request the books, records, and
financials of both Countryside and W&B Holdings and to inform Warzecha that he needed the
full tax returns that showed all of the details in order to evaluate any buyout offer.
36. On December 9, 2019, Brady sent an e‐mail to Thomas to respond to Thomas’s
request for books, records, and financials of both Countryside and W&B Holdings. Brady stated
in that December 9, 2019 e‐mail, that the numbers in the December 3, 2019 e‐mail attachment
from Warzecha came from the generally accepted accounting principles reports. Brady also
informed Thomas in that e‐mail dated December 9, 2019, that Defendants would likely be
willing to buy out Thomas for twenty‐thousand‐dollar ($20,000.00).
37. On or about April 29, 2020, after finishing their tax returns, Attorney Zimmerman
sent a letter to Thomas to inform him of Defendants’ settlement offer. Attorney Zimmerman
stated that Defendants were offering twenty‐one thousand six hundred and fifty‐three dollars
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($21,653.00) in exchange for a mutual release and settlement of all claims. The letter included a
spreadsheet with more financial information, but even that spreadsheet was an incomplete
accounting of the books, records, and financials of Defendants Countryside and W&B Holdings.
To date, Thomas has never received a full and complete accounting of the books, records, and
financials of Defendants Countryside or W&B Holdings.
38. On or about November 17, 2021, Thomas sent a letter dated November 16,
2021, to formally demand access to the books, records, and financials of Countryside.
39. On or about November 17, 2021, Thomas sent a letter dated November 16,
2021, to formally demand access to the books, records, and financials of W&B Holdings.
40. On February 7, 2022, Thomas’s legal counsel sent a letter to Defendants to (a)
reiterate Thomas’s demands from November 17, 2021; (b) request payment of Thomas’s pro
rata share of all profit distributions and dividends made from the inception of Countryside and
W&B Holdings to date; and (c) request a special meeting of Countryside’s shareholders, all, on
or before February 11, 2022.
41. On February 11, 2022, Attorney Zimmerman sent a letter to Thomas’s attorney
stating that he formed both Countryside and W&B Holdings on behalf of Defendants, that his
firm represents Countryside and W&B Holdings, and that their records indicate that no shares
in Countryside and no membership interest in W&B Holdings were ever issued to Thomas.
Attorney Zimmerman stated, for the first time, that Thomas is neither entitled to any of the
documents requested, nor entitled to request a special meeting for either entity.
42. On March 5, 2022, Thomas’s counsel sent Attorney Zimmerman a letter stating
that if Attorney Zimmerman’s records of Countryside do not indicate that Thomas is a
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shareholder and his records of W&B Holdings do not indicate that Thomas is a member, then
Defendants are in breach of the parties’ agreement that Thomas was a 24% owner of
Countryside and a has a 24% membership interest in W&B Holdings. Thomas’s counsel
demanded (a) that Countryside issue Thomas 24% of the shares of Countryside and 24% of the
membership interests of W&B Holdings; (b) an updated ledger for both Countryside and W&B
Holdings to reflect Thomas as a 24% owner; (c) confirmation, in writing, that Thomas is a 24%
owner; (d) payment of 24% of both Countryside’s and W&B Holdings’ profits to Thomas; and (e)
a copy of the requested books, records, and financials of Countryside and W&B Holdings.
43. The Defendants have not acknowledged or agreed to Thomas’s status as a
shareholder of Countryside, Thomas’s status as a member of W&B Holdings, Thomas’s right to
24% of the profits of both Countryside and W&B Holdings, the buyout of Thomas’s interests in
these entities, or the resolution of their dispute.
Count I.
Breach of Contract
44. Thomas realleges and reincorporates all of the allegations contained in the
preceding paragraphs as though fully set forth herein.
45. Thomas and Defendants, by their mutual assent, entered into a contractual
agreement supported by good and valuable consideration, whereby Thomas agreed to make
contributions to the new business venture and Defendants, in exchange, agreed to transfer to
Thomas 24% ownership in Countryside, twenty‐four percent 24% membership interest in W&B
Holdings, and 24% of the profits of these businesses. Defendants Countryside and W&B
Holdings have ratified, adopted, and benefitted from this agreement by and through their
authorized agents, the individual defendants named herein.
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46. Defendants have breached their contractual obligations by failing to recognize
Thomas as an owner of Countryside or W&B Holdings, failing to issue to Thomas any shares of
stock in Countryside, failing to issue to Thomas any membership interests in W&B Holdings,
failing to provide 24% of the profits of Countryside to Thomas, failing to provide 24% of the
profits of W&B Holdings to Thomas, refusing to treat Thomas as an owner of Countryside or
W&B Holdings, and failing to recognize Thomas’s rights as an owner of these companies.
47. Thomas, for his part, has performed all of his obligations under the agreement.
Among other things, Thomas provided his time, “sweat equity,” experience, skills, insights,
resources, relationships, goodwill, and other contributions, including but not limited to, his
relationships with key suppliers, negotiating distribution agreements between the new
company and those key suppliers, and arranging for new distribution agreements with other
manufacturers with similar products.
48. As a result of the aforesaid conduct, Plaintiff has suffered damages in an amount
greater than Fifty Thousand Dollars ($50,000.00) to be proven with specificity at trial.
49. The aforesaid conduct, for which there is no complete adequate remedy at law,
is irreparable, continuing in nature, and will continue unless properly enjoined.
50. Among other things, Thomas is entitled to the remedy of specific performance
and the Court should order Defendants to issue to Thomas 24% of the shares of Defendant
Countryside and 24% of the membership interests of Defendant W&B Holdings.
Count II.
Breach of Implied Covenant of Good Faith and Fair Dealing
51. Thomas realleges and reincorporates all of the allegations contained in the
preceding paragraphs as though fully set forth herein.
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52. Minnesota common law implies a covenant of good faith and fair dealing into
every contract including the contract between Thomas and the Defendants.
53. Due to the close friendship, personal relationship, working relationship, and
position of trust and confidence between Defendants and Thomas that preceded the formation
of Countryside and W&B Holdings and followed thereafter, and the general partnership formed
by Defendants and Thomas when they agreed to form a food packaging and equipment
distribution business venture and splits its profits, Defendants owed Thomas a covenant of
good faith and fair dealing. Further, Defendants, as shareholders of a closely held Minnesota
corporation and members of a closely held Minnesota limited liability company, have an
implied duty of good faith and fair dealing to a fellow shareholder or member, such as Thomas.
54. Defendants breached the covenant of good faith and fair dealing by failing to
negotiate in good faith with Thomas, failing to carry out the letter and spirit of the parties’
agreement, failing to disclose material information to Thomas, misleading Thomas, taking the
fruits of Thomas’s labor without compensating him, failing to give Thomas access to the books,
records, and financials of Countryside and W&B Holdings, failing to transfer to Thomas 24%
ownership in Countryside, failing to transfer to Thomas 24% membership interest in W&B
Holdings, failing to provide Thomas with 24% of the profits of these businesses, and failing to
compensate Thomas in any fashion, despite Thomas’s contributions.
55. As a result of the aforesaid conduct, Plaintiff has suffered damages in an amount
greater than Fifty Thousand Dollars ($50,000.00) to be proven with specificity at trial.
56. The aforesaid conduct, for which there is no complete adequate remedy at law,
is irreparable, continuing in nature, and will continue unless properly enjoined.
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57. Among other things, the Court should order Defendants to issue to Thomas 24%
of the shares of Defendant Countryside and 24% of the membership interests of Defendant
W&B Holdings.
Count III.
Promissory Estoppel
58. Thomas realleges and reincorporates all of the allegations contained in the
preceding paragraphs as though fully set forth herein.
59. Defendants, in their personal capacities and as the authorized agents and
representatives of Defendants Countryside and W&B Holdings, promised to transfer to Thomas
24% ownership in Countryside, 24% membership interest in W&B Holdings, and 24% of the
profits of these businesses, in exchange for Thomas providing his agreed‐upon contributions.
60. Defendants, in making the aforesaid promise to Thomas, should have reasonably
expected to induce Thomas to provide his time, “sweat equity,” experience, skills, resources,
relationships, and contributions to the new business venture.
61. In reliance on Defendants’ promises, Thomas did, in fact, provide his time,
“sweat equity,” experience, skills, resources, relationships, and contributions to the new
business venture and Thomas was instrumental in making Defendants successful.
62. As a result of Thomas’s contributions, Defendant Countryside’s and Defendant
W&B Holdings’ sales and profitability improved and Defendants were rewarded handsomely.
63. Defendants failed to keep their promises, and refused to transfer to Thomas 24%
ownership in Countryside, 24% membership interest in W&B Holdings, or 24% of the profits of
these businesses.
64. Justice requires enforcement of Defendants’ promises.
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65. As a result of the aforesaid conduct, Plaintiff has suffered damages in an amount
greater than Fifty Thousand Dollars ($50,000.00) to be proven with specificity at trial.
66. The aforesaid conduct, for which there is no complete adequate remedy at law,
is irreparable, continuing in nature, and will continue unless properly enjoined.
67. Among other things, the Court should order Defendants to issue to Thomas 24%
of the shares of Defendant Countryside and 24% of the membership interests of Defendant
W&B Holdings.
Count IV.
Declaratory Judgment
68. Thomas realleges and reincorporates all of the allegations contained in the
preceding paragraphs as though fully set forth herein.
69. The declaratory relief sought by Thomas in this action is authorized by, under,
and pursuant to Rule 57 of the Minnesota Rules of Civil Procedure and Minnesota Statutes
Chapter 555, the Minnesota Uniform Declaratory Judgments Act.
70. This matter involves a genuine and justiciable controversy arising out of the
conflicting claims of the parties with regard to the respective rights of Thomas and Defendants.
71. Thomas contends that (a) Thomas is a 24% shareholder of Countryside; (b)
Thomas is entitled to 24% of Countryside’s profits; (c) Thomas is a 24% member of W&B
Holdings; and (d) Thomas is entitled to 24% of W&B Holdings’ profits.
72. Defendants content that (a) Thomas is not a 24% shareholder of Countryside; (b)
Thomas is not entitled to 24% of Countryside’s profits; (c) Thomas is not a 24% member of W&B
Holdings; and (d) Thomas is not entitled to 24% of W&B Holdings’ profits.
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73. A declaratory judgment determining the respective rights of the parties would
serve the useful purpose of clarifying the legal relationship between Thomas and Defendants
and would settle the controversy between them.
74. The court should declare that (a) Thomas is a 24% shareholder of Countryside;
(b) Thomas is entitled to 24% of Countryside’s profits; (c) Thomas is a 24% member of W&B
Holdings; and (d) Thomas is entitled to 24% of W&B Holdings’ profits under the Minnesota
Uniform Declaratory Judgments Act, and to make such other declarations as are appropriate
and authorized under the Act to clarify the parties’ rights and responsibilities.
75. The court should award Thomas his reasonable costs pursuant to Minn. Stat. §
555.10.
Count V.
Breach of Fiduciary Duty
76. Thomas realleges and reincorporates all of the allegations contained in the
preceding paragraphs as though fully set forth herein.
77. Due to the close friendship, personal relationship, working relationship, and
position of trust and confidence between Defendants and Thomas that preceded the formation
of Countryside and W&B Holdings and followed thereafter, and the general partnership formed
by Defendants and Thomas when they agreed to form a food packaging and equipment
distribution business venture and splits its profits, Defendants owed Thomas fiduciary duties of
honesty, loyalty, good faith, and fair dealing. Further, Defendants, as shareholders of a closely
held Minnesota corporation and members of a closely held Minnesota limited liability
company, have fiduciary duties to a fellow shareholder or member, such as Thomas.
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78. The fiduciary duties Defendants Brady, Warzecha, and Haversack owed to
Thomas include the duty to deal openly, honestly, and fairly, the duty of loyalty, good faith and
fair dealing, the duty not to oppress him or act in an unfairly prejudicial manner towards him,
the duty to carry out the reasonable expectations of the parties, and a duty of full disclosure.
79. Defendants Brady, Warzecha, and Haversack have breached their fiduciary
duties to Thomas.
80. As a result of the aforesaid conduct, Plaintiff has suffered damages in an amount
greater than Fifty Thousand Dollars ($50,000.00) to be proven with specificity at trial.
81. The aforesaid conduct, for which there is no complete adequate remedy at law,
is irreparable, continuing in nature, and will continue unless properly enjoined.
82. Among other things, the Court should order Defendants to issue to Thomas 24%
of the shares of Defendant Countryside and 24% of the membership interests of Defendant
W&B Holdings.
83. Thomas is entitled to recover all of Thomas’s expenses, including attorneys’ fees
and disbursements, incurred as a result of Defendant’s breach of fiduciary duties pursuant to
Minn. Stat. §§ 302A.467, 322B.38, 322C. 0409 and 323A.0404.
Count VI.
Violation of Minn. Stat. §§ 302A. 461 and 302A. 463
(Failure to Produce Books, Records, and Financial Statements)
84. Thomas realleges and reincorporates all of the allegations contained in the
preceding paragraphs as though fully set forth herein.
85. Thomas is a shareholder of Countryside, holding 24% of its outstanding capital
stock. In the alternative, Thomas is the beneficial owner of 24% of Countryside’s stock.
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86. Minn. Stat. § 302A.461, subd. 4(a)‐(b) provides that a shareholder, beneficial
owner, or a holder of a voting trust certificate of a corporation that is not a publicly held
corporation has an absolute right, upon written demand, to examine and copy, in person or by
a legal representative, at any reasonable time, and the corporation shall make available within
ten (10) days after receipt by an officer of the corporation of the written demand, the share
register and all documents referred to in subdivision 2; other corporate records at any
reasonable time only if the shareholder, beneficial owner, or holder of a voting trust certificate
demonstrates a proper purpose for the examination; and upon written demand stating the
purpose and acknowledged or verified in the manner provided in chapter 358, a right at any
reasonable time to examine and copy the corporation's share register and other corporate
records reasonably related to the stated purpose and described with reasonable particularity in
the written demand upon demonstrating the stated purpose to be a proper purpose.
87. Minn. Stat. § 302A.463 provides that, upon written request by a shareholder, a
corporation shall furnish its most recent annual financial statements no later than ten (10)
business days after receipt of request.
88. Thomas, for the purposes of evaluating the buyout price the other shareholders
would offer, and to understand his financial and other rights in Defendant Countryside, made a
formal demand as a shareholder under Minn. Stat. §§ 302A.461, subd.4 and 302A.463 to obtain
access to various records he is entitled to receive under applicable law.
89. To date, Countryside has failed to furnish Thomas with, and grant Thomas access
to examine and copy, the complete collection of Countryside’s books, records, financial
statements, and other documents and information Thomas has a right to receive. Countryside
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has, therefore, violated Minn. Stat. §§ 302A.461, subd. 4 and 302A.463.
90. As a result of Defendant Countryside’s failure to furnish Thomas with, and
refusing Thomas access to examine and copy, Countryside’s books, records, financial
statements, and other documents and information Thomas has a right to, Thomas has suffered
and will continue to suffer damages in an amount to be proven with specificity at trial.
91. Thomas is entitled to an order compelling Countryside to furnish Thomas with,
and grant Thomas access to examine and copy, Countryside’s books, records, financial
statements, and other documents and information Thomas has a right to receive.
92. Pursuant to Minn. Stat. § 302A. 467, Thomas is entitled to reasonable expenses,
including attorneys’ fees and disbursements.
Count VII.
Violation of Minn. Stat. §§ 302A. 551 & 302A. 557
(Improper Distributions)
93. Thomas realleges and reincorporates all of the allegations contained in the
preceding paragraphs as though fully set forth herein.
94. Thomas is a shareholder and rightful owner of 24% of the outstanding capital
stock of Countryside. In the alternative, Thomas is the beneficial owner of 24% of Countryside’s
stock.
95. Minn. Stat. § 302A.551, subd. 4(1) provides that a distribution may be made to
the holders of a class or series of shares only if all amounts payable to the holders of shares
having a preference for the payment of that kind of distribution, other than those holders who
give notice to the corporation of their agreement to waive their rights to that payment, are
paid.
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96. Minn. Stat. § 302A.557 provides that a shareholder who receives a distribution
made in violation of the provisions of section 302A.551 is liable to the corporation, its receiver
or other person winding up its affairs, or a director under 302A.559, subdivision 2, but only to
the extent that the distribution received by the shareholder exceeded the amount that properly
could have been paid under section 302A.551.
97. Upon information and belief, Countryside’s articles of incorporation, bylaws, or
the board of directors under Minn. Stat. § 302A.551, subdivisions 1 and 2, do not provide for
distributions contrary to Minn. Stat. § 302A.551, subdivision 4(2)(b).
98. Upon information and belief, Defendants have approved improper profit
distributions and Defendants Haversack, Warzecha, and Brady have received improper profit
distributions in Defendant Countryside. Plaintiff is entitled to a 24% share of all profit
distributions made to the shareholders of Defendant Countryside.
99. As a result of the aforesaid conduct, Plaintiff has suffered damages in an amount
greater than Fifty Thousand Dollars ($50,000.00) to be proven with specificity at trial.
100. Pursuant to Minn. Stat. § 302A. 467, Thomas is entitled to reasonable expenses,
including attorneys’ fees and disbursements.
Count VIII.
Violation of Minn. Stat. § 302A. 751, Subd. 2
(Equitable Buy‐Out on Motion)
101. Thomas realleges and reincorporates all of the allegations contained in the
preceding paragraphs as though fully set forth herein.
102. Thomas is a shareholder of Countryside, holding 24% of its outstanding capital
stock. In the alternative, Thomas is the beneficial owner of 24% of Countryside’s stock.
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103. Minn. Stat. § 302A.751, subd. 2 provides that a shareholder of a corporation may
seek and receive equitable relief in the form of, among other things, corporate dissolution or a
buyout when the directors or those in control of the corporation have acted fraudulently,
illegally, or in a manner that is unfairly prejudicial toward the shareholder in their capacities as
shareholders, directors, officers, or employees of a corporation.
104. Defendants Brady, Warzecha, and Haversack have acted fraudulently, illegally,
and in an unfairly prejudicial manner toward Thomas in their capacities as shareholders,
directors, officers, and/or employees of Countryside by, among other things:
(a) Defendants Countryside, Brady, Haversack, and Warzecha have failed and
refused to issue or otherwise acknowledge Thomas as a shareholder and
owner of 24% of Countryside’s outstanding capital stock;
(b) Defendants Countryside, Brady, Haversack, and Warzecha unfairly
granted and caused to grant profit distributions in violation of Minn. Stat.
§§ 302A.551 and 302A.557 by failing to grant distributions in proportion
to Thomas’s 24% ownership interest in Countryside;
(c) Defendants Countryside, Brady, Haversack, and Warzecha unlawfully
failed and refused to notify Thomas of Countryside’s shareholder
meetings during the years Thomas has been a shareholder of
Countryside;
(d) Defendants Countryside, Brady, Haversack, and Warzecha attempted to
marginalize Thomas’s role in Countryside by, among other things, not
allowing Thomas to vote for matters brought before the shareholders
during shareholder meetings, not including Thomas in important
decisions regarding the company, and otherwise not informing Thomas of
his rights as a minority owner of Countryside;
(e) Defendants Countryside, Brady, Haversack, and Warzecha continued to
induce Thomas to reasonably rely on their initial agreement by actively
making Thomas believe he was a shareholder of Countryside;
(f) Defendants Countryside, Brady, Haversack, and Warzecha refused to
respond to Thomas’s good faith requests for information, documents,
and profit distributions to which Thomas was entitled under the law;
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(g) Defendants Countryside, Brady, Haversack, and Warzecha unlawfully
failed and refused to provide Plaintiff with access to examine
Countryside’s financial documents in response to his written demands on
December 6, 2019, December 7, 2019, and November 17, 2021, in
violation of Minn. Stat. §§ 302A.461 and 302A.463;
(h) Defendants Countryside, Brady, Haversack, and Warzecha unlawfully
failed and refused to furnish Thomas with a copy of Countryside’s most
recent financial statement in response to his written requests on
December 6, 2019, December 7, 2019, and November 17, 2021, in
violation of Minn. Stat. §§ 302A. 461 and 302A. 463;
(i) After repeated requests from Thomas, Defendants Countryside, Brady,
Haversack, and Warzecha finally agreed to meet with Thomas on
November 6, 2019 to discuss his ownership interest. Soon after that
meeting, on December 9, 2019, Defendants Brady, Haversack, and
Warzecha offered to pay Plaintiff $20,000.00 to extinguish his claim of
ownership in Countryside and Defendant W&B Holdings, an amount that
represents a fraction of the fair market value of Thomas’s 24% ownership
of Countryside’s outstanding capital stock; and
(j) Defendants Countryside, Brady, Warzecha, and Haversack continued to
act unfairly prejudicially towards Thomas throughout the offer of a
buyout. Thomas inquired about the buyout price and Defendants Brady,
Warzecha, and Haversack stalled, delayed, and refused to engage in due
diligence, and negotiated with Thomas in bad faith.
105. As a result of Defendants’ fraudulent, illegal, and unfairly prejudicial actions,
Thomas has suffered and will continue to suffer a loss of past and future incom
Preview
73-CV-23-9522 Filed in District Court State of Minnesota 12/5/2023 2:03 PM STATE OF MINNESOTA DISTRICT COURT COUNTY OF STEARNS SEVENTH JUDICIAL DISTRICT ______________________________________________________________________________ John Thomas, Jr., Case Type: Contract Plaintiff, Court File No. ________________ vs. JURY TRIAL REQUESTED Daniel Brady, Robert Warzecha, Jeffrey Haversack, Countryside Packaging & Equipment, Inc., and W&B Holdings, LLC, Defendants. ______________________________________________________________________________ COMPLAINT ______________________________________________________________________________ Plaintiff John Thomas, Jr. (“Plaintiff” or “Thomas”) as and for his Complaint against Defendants Daniel Brady (“Brady”), Robert Warzecha (“Warzecha”), Jeffrey Haversack (“Haversack”), Countryside Packaging & Equipment, Inc. (“Countryside”), and W&B Holdings, LLC (“W&B Holdings”) (collectively, the “Defendants”) hereby states and alleges as follows: The Parties 1. Plaintiff Thomas is a natural person residing at 7398 West Old Sauk Road, Middleton, Wisconsin 53562. 2. Upon information and belief, Brady is a natural person residing at 19378 Two Rivers Road, Avon, Minnesota 53610. 3. Upon information and belief, Warzecha is a natural person residing at 490 River Street West, Holdingford, Minnesota 56340. 4. Upon information and belief, Haversack is a natural person residing at W5428 1 73-CV-23-9522 Filed in District Court State of Minnesota 12/5/2023 2:03 PM Keystone Road, Elkhart Lake, Wisconsin 53020. 5. Upon information and belief, Countryside is a Minnesota corporation with its principal place of business at 19378 Two Rivers Road, Avon, Minnesota 53610. 6. Upon information and belief, W&B Holdings is a Minnesota limited liability company with its principal place of business at 19378 Two Rivers Road, Avon, Minnesota 53610. Jurisdiction and Venue 7. This Court has subject matter jurisdiction pursuant to Minn. Stat. § 484. 01. 8. This Court has personal jurisdiction over Defendants Brady and Warzecha because they reside and do business in the State of Minnesota. This Court has personal jurisdiction over Countryside because Countryside is a Minnesota corporation with its principal place of business in the State of Minnesota that does business in the State of Minnesota. This Court has personal jurisdiction over W&B Holdings because it is a Minnesota limited liability company with its principal place of business in the State of Minnesota that does business in the State of Minnesota. This Court has personal jurisdiction over Haversack and all Defendants because (a) Plaintiff’s claims involve causes of action that arose in Stearns County, Minnesota; (b) Defendants own, use, or possess real or personal property situated in the State of Minnesota; and (c) Defendants transact business within the State of Minnesota. 9. This action is properly venued in Stearns County pursuant to Minn. Stat. § 542.09 because: (a) Defendants Brady and Warzecha reside in Stearns County, Minnesota; (b) Defendants Countryside and W&B Holdings have an office, registered agent, or business place in Stearns County; and (c) Plaintiff’s cause of action, or some part thereof, arose in Stearns County, Minnesota. 2 73-CV-23-9522 Filed in District Court State of Minnesota 12/5/2023 2:03 PM Factual Allegations 10. Thomas and Haversack met while working together for a former employer. 11. Haversack introduced Thomas to Warzecha while Thomas and Haversack were working together. Haversack knew Warzecha from having made sales to Warzecha and his company while Thomas and Haversack were working for their former employer. 12. Warzecha eventually introduced Thomas and Haversack to Brady, and proposed forming a business venture whereby Thomas, Haversack, and Brady would provide their time, experience, skills, relationships, and resources within the industry to identify and help the business venture enter into future distribution agreements with various companies, and Warzecha would run the day‐to‐day operations of the business venture. 13. Brady, Warzecha, Haversack, and Thomas entered into an agreement, whereby the four of them agreed to establish, become partners of, and become co‐owners of a new business for the purpose of distributing cook‐in film and other products to companies including (a) a company with whom Brady had a prior relationship; and (b) Hormel Foods, Inc. and its affiliates, such as Dan’s Prize, Inc., with whom Thomas had a prior relationship. 14. Brady, Warzecha, Haversack, and Thomas agreed to own, control, and split the profits of the new business in the following percentages: (a) Warzecha: twenty‐eight percent (28%); (b) Brady: twenty‐four percent (24%); (c) Haversack: twenty‐four percent (24%); and (d) Thomas: twenty‐four percent (24%). 3 73-CV-23-9522 Filed in District Court State of Minnesota 12/5/2023 2:03 PM 15. Thomas and the Defendants agreed that Warzecha would take a larger percentage of ownership, control, and profits (28% rather than 24%) to compensate Warzecha for managing the day‐to‐day operation of the new business venture. 16. Thomas, Haversack, Warzecha, and Brady agreed that Warzecha and Brady would take responsibility for the formation of the new business for the benefit of each of the four founders (including Thomas) without immediately issuing Haversack or Thomas any formal shares while Thomas and Haversack contributed to the new business behind the scenes. The parties agreed that after Thomas and Haversack eventually quit their jobs, Warzecha and Brady would later issue formal shares to Haversack and Thomas upon request. The parties agreed that while Thomas and Haversack each would be 24% partners and owners of the new business, however structured, they would not officially reflect Thomas and Haversack as owners of the new business until Thomas and Haversack quit working for their employer and requested official documentation of their ownership. The parties agreed that Warzecha and Brady would hold Thomas’s 24% share of the business on his behalf and that Thomas would be entitled to 24% of the profits of the business regardless of formal designations or the issuance of shares. 17. Brady was never able to negotiate a distribution agreement between the parties’ new business venture and a company with whom Brady had a prior relationship. 18. On behalf of the parties’ business venture, Thomas successfully identified business opportunities to sell cook‐in film to Hormel Foods, Inc. or one of its affiliates, such as Dan’s Prize, Inc., and helped negotiate agreements with them for the new business. 4 73-CV-23-9522 Filed in District Court State of Minnesota 12/5/2023 2:03 PM 19. On behalf of the parties’ business venture, Thomas used his relationships with vendors who could supply Hormel Foods, Inc. and/or Dan’s Prize, Inc. with specialized cook‐in film, and helped negotiate agreements with them for the new business. 20. Thomas’s experience in the industry allowed him to successfully negotiate the appropriate pricing for the parties’ new business venture to enter into a distribution agreement with food packaging suppliers and Hormel Foods, Inc. and Dan’s Prize, Inc. 21. Later, when the United States imposed restrictive tariffs on Chinese imports, Thomas was instrumental in recognizing the need for additional vendors to supply Hormel Foods, Inc. and Dan’s Prize, Inc. with food packaging products and establishing such vendors. Upon information and belief, the food packaging vendor that Thomas was able to substitute for the Chinese vendor is the current food packaging vendor that Countryside currently utilizes. 22. Thomas was instrumental to the startup of the new business and without him the new company would have had no chance of landing deals with Hormel and its affiliates. Thomas provided his time, “sweat equity,” experience, skills, insights, resources, relationships, goodwill, and other contributions, including but not limited to, his relationships with key suppliers, negotiating distribution agreements between the new company and those key suppliers, and arranging for new distribution agreements with other manufacturers with similar products, to improve the sales and profitability of the new business venture. Thomas would not have made these investments and contributions but for the promise of receiving 24% of the ownership of the new business and 24% of the profits of the new business. 23. After leaving his job, Thomas requested that Brady and Warzecha officially reflect Thomas as an owner of the new business and pay Thomas his accumulated 24% of the 5 73-CV-23-9522 Filed in District Court State of Minnesota 12/5/2023 2:03 PM profits of the business. Brady and Warzecha told Thomas that the attorney that formed the corporate entity had the paperwork ready for Thomas to sign, noting his ownership interest in the new business venture, leading Thomas to believe that they would comply with Thomas’s requests and never claimed that Thomas was not an owner or partner of the new business. 24. In or around February 2019, Brady disclosed to Thomas that Brady and Warzecha had formed Countryside as the corporate entity under which the new business was being operated. Brady also disclosed to Thomas that Brady and Warzecha had formed W&B Holdings as a limited liability company to hold real property for the new business. Brady showed Thomas two documents that indicated Brady and Warzecha were reflected in the official corporate records as the sole owners of Countryside and W&B Holdings. 25. Thomas was somewhat surprised about the formation of the second business entity, W&B Holdings, but understood from Brady that Brady and Warzecha formed it to hold real estate for the parties’ new business venture and to lease out space to Countryside. 26. In or around April of 2019, Thomas asked Brady and Warzecha for the 2016, 2017, and 2018 tax returns of Countryside and W&B Holdings, to have his name listed as an official owner of Countryside and W&B Holdings, and to receive his 24% of the profits of both Countryside and W&B Holdings, as previously agreed upon by all parties. 27. Thomas never received the 2016, 2017, or 2018 tax returns of Countryside and W&B Holdings, but instead, was given a one‐page document that listed the net income of Countryside and W&B Holdings. 28. In or around November of 2019, the parties agreed that Thomas would fly to Minnesota from South Carolina so that they could meet at the office of attorney Daniel T. 6 73-CV-23-9522 Filed in District Court State of Minnesota 12/5/2023 2:03 PM Zimmerman, the attorney who incorporated Countryside and W&B Holdings, to officially reflect both Thomas and Haversack as owners of Countryside and W&B Holdings. 29. On November 6, 2019, when Thomas got to Minnesota, Brady and Warzecha took Thomas to a restaurant in Rice Lake, Minnesota, instead of the attorney’s office. The meeting that occurred between Brady, Warzecha, Haversack, and Thomas at that restaurant consisted of mostly social conversation over a meal. Thomas eventually asked if they would be going to the attorney’s office after lunch and they said “no.” 30. On November 6, 2019, at the restaurant, Brady, Warzecha, and Haversack told Thomas they wanted to buy him out, without offering a specific price. Thomas asked Brady and Warzecha what they were willing to offer Thomas to buy him out. Brady and Warzecha said they would have to finish their 2019 taxes in order to provide an offer and indicated they would not be able to make an offer until February or March of 2020. 31. On November 6, 2019, after Brady and Warzecha left the restaurant, Thomas and Haversack remained at the restaurant for a while and spoke privately. Thomas asked Haversack if he had received his 24% ownership interest in Countryside. Haversack told Thomas no, but that he was still working for Countryside. Thomas told Haversack that he was not comfortable with what Brady and Warzecha were proposing. 32. After the meeting in the restaurant on November 6, 2019, Thomas flew home to South Carolina. Shortly thereafter, he notified Brady, Warzecha, and Haversack that he was not comfortable waiting until March of 2020 to receive a buyout offer. 33. On or about December 2, 2019, the attorney for Defendants Countryside and W&B Holdings, Daniel T. Zimmerman (“Attorney Zimmerman”), sent Thomas a draft proposal 7 73-CV-23-9522 Filed in District Court State of Minnesota 12/5/2023 2:03 PM to pay him the sum equal to 24% of the combined asset values of Countryside and W&B Holdings as determined effective December 31, 2019 net of 2019 taxes owed, in exchange for the mutual release and settlement of all claims between the parties. The proposal did not include a specific purchase price, but was dependent on figures to be prepared by Defendants’ accountant and received prior to April 15, 2020. 34. On December 3, 2019, Warzecha forwarded an e‐mail with an attachment from Defendants’ corporate accountant. The attachment provided the net income of Countryside for the years 2016, 2017, and 2018, and the net income of W&B Holdings for the year 2018, but did not include any more information. 35. On December 6 and 7, 2019, as a shareholder of Countryside and a member of W&B Holdings, Thomas sent an e‐mail to Warzecha to request the books, records, and financials of both Countryside and W&B Holdings and to inform Warzecha that he needed the full tax returns that showed all of the details in order to evaluate any buyout offer. 36. On December 9, 2019, Brady sent an e‐mail to Thomas to respond to Thomas’s request for books, records, and financials of both Countryside and W&B Holdings. Brady stated in that December 9, 2019 e‐mail, that the numbers in the December 3, 2019 e‐mail attachment from Warzecha came from the generally accepted accounting principles reports. Brady also informed Thomas in that e‐mail dated December 9, 2019, that Defendants would likely be willing to buy out Thomas for twenty‐thousand‐dollar ($20,000.00). 37. On or about April 29, 2020, after finishing their tax returns, Attorney Zimmerman sent a letter to Thomas to inform him of Defendants’ settlement offer. Attorney Zimmerman stated that Defendants were offering twenty‐one thousand six hundred and fifty‐three dollars 8 73-CV-23-9522 Filed in District Court State of Minnesota 12/5/2023 2:03 PM ($21,653.00) in exchange for a mutual release and settlement of all claims. The letter included a spreadsheet with more financial information, but even that spreadsheet was an incomplete accounting of the books, records, and financials of Defendants Countryside and W&B Holdings. To date, Thomas has never received a full and complete accounting of the books, records, and financials of Defendants Countryside or W&B Holdings. 38. On or about November 17, 2021, Thomas sent a letter dated November 16, 2021, to formally demand access to the books, records, and financials of Countryside. 39. On or about November 17, 2021, Thomas sent a letter dated November 16, 2021, to formally demand access to the books, records, and financials of W&B Holdings. 40. On February 7, 2022, Thomas’s legal counsel sent a letter to Defendants to (a) reiterate Thomas’s demands from November 17, 2021; (b) request payment of Thomas’s pro rata share of all profit distributions and dividends made from the inception of Countryside and W&B Holdings to date; and (c) request a special meeting of Countryside’s shareholders, all, on or before February 11, 2022. 41. On February 11, 2022, Attorney Zimmerman sent a letter to Thomas’s attorney stating that he formed both Countryside and W&B Holdings on behalf of Defendants, that his firm represents Countryside and W&B Holdings, and that their records indicate that no shares in Countryside and no membership interest in W&B Holdings were ever issued to Thomas. Attorney Zimmerman stated, for the first time, that Thomas is neither entitled to any of the documents requested, nor entitled to request a special meeting for either entity. 42. On March 5, 2022, Thomas’s counsel sent Attorney Zimmerman a letter stating that if Attorney Zimmerman’s records of Countryside do not indicate that Thomas is a 9 73-CV-23-9522 Filed in District Court State of Minnesota 12/5/2023 2:03 PM shareholder and his records of W&B Holdings do not indicate that Thomas is a member, then Defendants are in breach of the parties’ agreement that Thomas was a 24% owner of Countryside and a has a 24% membership interest in W&B Holdings. Thomas’s counsel demanded (a) that Countryside issue Thomas 24% of the shares of Countryside and 24% of the membership interests of W&B Holdings; (b) an updated ledger for both Countryside and W&B Holdings to reflect Thomas as a 24% owner; (c) confirmation, in writing, that Thomas is a 24% owner; (d) payment of 24% of both Countryside’s and W&B Holdings’ profits to Thomas; and (e) a copy of the requested books, records, and financials of Countryside and W&B Holdings. 43. The Defendants have not acknowledged or agreed to Thomas’s status as a shareholder of Countryside, Thomas’s status as a member of W&B Holdings, Thomas’s right to 24% of the profits of both Countryside and W&B Holdings, the buyout of Thomas’s interests in these entities, or the resolution of their dispute. Count I. Breach of Contract 44. Thomas realleges and reincorporates all of the allegations contained in the preceding paragraphs as though fully set forth herein. 45. Thomas and Defendants, by their mutual assent, entered into a contractual agreement supported by good and valuable consideration, whereby Thomas agreed to make contributions to the new business venture and Defendants, in exchange, agreed to transfer to Thomas 24% ownership in Countryside, twenty‐four percent 24% membership interest in W&B Holdings, and 24% of the profits of these businesses. Defendants Countryside and W&B Holdings have ratified, adopted, and benefitted from this agreement by and through their authorized agents, the individual defendants named herein. 10 73-CV-23-9522 Filed in District Court State of Minnesota 12/5/2023 2:03 PM 46. Defendants have breached their contractual obligations by failing to recognize Thomas as an owner of Countryside or W&B Holdings, failing to issue to Thomas any shares of stock in Countryside, failing to issue to Thomas any membership interests in W&B Holdings, failing to provide 24% of the profits of Countryside to Thomas, failing to provide 24% of the profits of W&B Holdings to Thomas, refusing to treat Thomas as an owner of Countryside or W&B Holdings, and failing to recognize Thomas’s rights as an owner of these companies. 47. Thomas, for his part, has performed all of his obligations under the agreement. Among other things, Thomas provided his time, “sweat equity,” experience, skills, insights, resources, relationships, goodwill, and other contributions, including but not limited to, his relationships with key suppliers, negotiating distribution agreements between the new company and those key suppliers, and arranging for new distribution agreements with other manufacturers with similar products. 48. As a result of the aforesaid conduct, Plaintiff has suffered damages in an amount greater than Fifty Thousand Dollars ($50,000.00) to be proven with specificity at trial. 49. The aforesaid conduct, for which there is no complete adequate remedy at law, is irreparable, continuing in nature, and will continue unless properly enjoined. 50. Among other things, Thomas is entitled to the remedy of specific performance and the Court should order Defendants to issue to Thomas 24% of the shares of Defendant Countryside and 24% of the membership interests of Defendant W&B Holdings. Count II. Breach of Implied Covenant of Good Faith and Fair Dealing 51. Thomas realleges and reincorporates all of the allegations contained in the preceding paragraphs as though fully set forth herein. 11 73-CV-23-9522 Filed in District Court State of Minnesota 12/5/2023 2:03 PM 52. Minnesota common law implies a covenant of good faith and fair dealing into every contract including the contract between Thomas and the Defendants. 53. Due to the close friendship, personal relationship, working relationship, and position of trust and confidence between Defendants and Thomas that preceded the formation of Countryside and W&B Holdings and followed thereafter, and the general partnership formed by Defendants and Thomas when they agreed to form a food packaging and equipment distribution business venture and splits its profits, Defendants owed Thomas a covenant of good faith and fair dealing. Further, Defendants, as shareholders of a closely held Minnesota corporation and members of a closely held Minnesota limited liability company, have an implied duty of good faith and fair dealing to a fellow shareholder or member, such as Thomas. 54. Defendants breached the covenant of good faith and fair dealing by failing to negotiate in good faith with Thomas, failing to carry out the letter and spirit of the parties’ agreement, failing to disclose material information to Thomas, misleading Thomas, taking the fruits of Thomas’s labor without compensating him, failing to give Thomas access to the books, records, and financials of Countryside and W&B Holdings, failing to transfer to Thomas 24% ownership in Countryside, failing to transfer to Thomas 24% membership interest in W&B Holdings, failing to provide Thomas with 24% of the profits of these businesses, and failing to compensate Thomas in any fashion, despite Thomas’s contributions. 55. As a result of the aforesaid conduct, Plaintiff has suffered damages in an amount greater than Fifty Thousand Dollars ($50,000.00) to be proven with specificity at trial. 56. The aforesaid conduct, for which there is no complete adequate remedy at law, is irreparable, continuing in nature, and will continue unless properly enjoined. 12 73-CV-23-9522 Filed in District Court State of Minnesota 12/5/2023 2:03 PM 57. Among other things, the Court should order Defendants to issue to Thomas 24% of the shares of Defendant Countryside and 24% of the membership interests of Defendant W&B Holdings. Count III. Promissory Estoppel 58. Thomas realleges and reincorporates all of the allegations contained in the preceding paragraphs as though fully set forth herein. 59. Defendants, in their personal capacities and as the authorized agents and representatives of Defendants Countryside and W&B Holdings, promised to transfer to Thomas 24% ownership in Countryside, 24% membership interest in W&B Holdings, and 24% of the profits of these businesses, in exchange for Thomas providing his agreed‐upon contributions. 60. Defendants, in making the aforesaid promise to Thomas, should have reasonably expected to induce Thomas to provide his time, “sweat equity,” experience, skills, resources, relationships, and contributions to the new business venture. 61. In reliance on Defendants’ promises, Thomas did, in fact, provide his time, “sweat equity,” experience, skills, resources, relationships, and contributions to the new business venture and Thomas was instrumental in making Defendants successful. 62. As a result of Thomas’s contributions, Defendant Countryside’s and Defendant W&B Holdings’ sales and profitability improved and Defendants were rewarded handsomely. 63. Defendants failed to keep their promises, and refused to transfer to Thomas 24% ownership in Countryside, 24% membership interest in W&B Holdings, or 24% of the profits of these businesses. 64. Justice requires enforcement of Defendants’ promises. 13 73-CV-23-9522 Filed in District Court State of Minnesota 12/5/2023 2:03 PM 65. As a result of the aforesaid conduct, Plaintiff has suffered damages in an amount greater than Fifty Thousand Dollars ($50,000.00) to be proven with specificity at trial. 66. The aforesaid conduct, for which there is no complete adequate remedy at law, is irreparable, continuing in nature, and will continue unless properly enjoined. 67. Among other things, the Court should order Defendants to issue to Thomas 24% of the shares of Defendant Countryside and 24% of the membership interests of Defendant W&B Holdings. Count IV. Declaratory Judgment 68. Thomas realleges and reincorporates all of the allegations contained in the preceding paragraphs as though fully set forth herein. 69. The declaratory relief sought by Thomas in this action is authorized by, under, and pursuant to Rule 57 of the Minnesota Rules of Civil Procedure and Minnesota Statutes Chapter 555, the Minnesota Uniform Declaratory Judgments Act. 70. This matter involves a genuine and justiciable controversy arising out of the conflicting claims of the parties with regard to the respective rights of Thomas and Defendants. 71. Thomas contends that (a) Thomas is a 24% shareholder of Countryside; (b) Thomas is entitled to 24% of Countryside’s profits; (c) Thomas is a 24% member of W&B Holdings; and (d) Thomas is entitled to 24% of W&B Holdings’ profits. 72. Defendants content that (a) Thomas is not a 24% shareholder of Countryside; (b) Thomas is not entitled to 24% of Countryside’s profits; (c) Thomas is not a 24% member of W&B Holdings; and (d) Thomas is not entitled to 24% of W&B Holdings’ profits. 14 73-CV-23-9522 Filed in District Court State of Minnesota 12/5/2023 2:03 PM 73. A declaratory judgment determining the respective rights of the parties would serve the useful purpose of clarifying the legal relationship between Thomas and Defendants and would settle the controversy between them. 74. The court should declare that (a) Thomas is a 24% shareholder of Countryside; (b) Thomas is entitled to 24% of Countryside’s profits; (c) Thomas is a 24% member of W&B Holdings; and (d) Thomas is entitled to 24% of W&B Holdings’ profits under the Minnesota Uniform Declaratory Judgments Act, and to make such other declarations as are appropriate and authorized under the Act to clarify the parties’ rights and responsibilities. 75. The court should award Thomas his reasonable costs pursuant to Minn. Stat. § 555.10. Count V. Breach of Fiduciary Duty 76. Thomas realleges and reincorporates all of the allegations contained in the preceding paragraphs as though fully set forth herein. 77. Due to the close friendship, personal relationship, working relationship, and position of trust and confidence between Defendants and Thomas that preceded the formation of Countryside and W&B Holdings and followed thereafter, and the general partnership formed by Defendants and Thomas when they agreed to form a food packaging and equipment distribution business venture and splits its profits, Defendants owed Thomas fiduciary duties of honesty, loyalty, good faith, and fair dealing. Further, Defendants, as shareholders of a closely held Minnesota corporation and members of a closely held Minnesota limited liability company, have fiduciary duties to a fellow shareholder or member, such as Thomas. 15 73-CV-23-9522 Filed in District Court State of Minnesota 12/5/2023 2:03 PM 78. The fiduciary duties Defendants Brady, Warzecha, and Haversack owed to Thomas include the duty to deal openly, honestly, and fairly, the duty of loyalty, good faith and fair dealing, the duty not to oppress him or act in an unfairly prejudicial manner towards him, the duty to carry out the reasonable expectations of the parties, and a duty of full disclosure. 79. Defendants Brady, Warzecha, and Haversack have breached their fiduciary duties to Thomas. 80. As a result of the aforesaid conduct, Plaintiff has suffered damages in an amount greater than Fifty Thousand Dollars ($50,000.00) to be proven with specificity at trial. 81. The aforesaid conduct, for which there is no complete adequate remedy at law, is irreparable, continuing in nature, and will continue unless properly enjoined. 82. Among other things, the Court should order Defendants to issue to Thomas 24% of the shares of Defendant Countryside and 24% of the membership interests of Defendant W&B Holdings. 83. Thomas is entitled to recover all of Thomas’s expenses, including attorneys’ fees and disbursements, incurred as a result of Defendant’s breach of fiduciary duties pursuant to Minn. Stat. §§ 302A.467, 322B.38, 322C. 0409 and 323A.0404. Count VI. Violation of Minn. Stat. §§ 302A. 461 and 302A. 463 (Failure to Produce Books, Records, and Financial Statements) 84. Thomas realleges and reincorporates all of the allegations contained in the preceding paragraphs as though fully set forth herein. 85. Thomas is a shareholder of Countryside, holding 24% of its outstanding capital stock. In the alternative, Thomas is the beneficial owner of 24% of Countryside’s stock. 16 73-CV-23-9522 Filed in District Court State of Minnesota 12/5/2023 2:03 PM 86. Minn. Stat. § 302A.461, subd. 4(a)‐(b) provides that a shareholder, beneficial owner, or a holder of a voting trust certificate of a corporation that is not a publicly held corporation has an absolute right, upon written demand, to examine and copy, in person or by a legal representative, at any reasonable time, and the corporation shall make available within ten (10) days after receipt by an officer of the corporation of the written demand, the share register and all documents referred to in subdivision 2; other corporate records at any reasonable time only if the shareholder, beneficial owner, or holder of a voting trust certificate demonstrates a proper purpose for the examination; and upon written demand stating the purpose and acknowledged or verified in the manner provided in chapter 358, a right at any reasonable time to examine and copy the corporation's share register and other corporate records reasonably related to the stated purpose and described with reasonable particularity in the written demand upon demonstrating the stated purpose to be a proper purpose. 87. Minn. Stat. § 302A.463 provides that, upon written request by a shareholder, a corporation shall furnish its most recent annual financial statements no later than ten (10) business days after receipt of request. 88. Thomas, for the purposes of evaluating the buyout price the other shareholders would offer, and to understand his financial and other rights in Defendant Countryside, made a formal demand as a shareholder under Minn. Stat. §§ 302A.461, subd.4 and 302A.463 to obtain access to various records he is entitled to receive under applicable law. 89. To date, Countryside has failed to furnish Thomas with, and grant Thomas access to examine and copy, the complete collection of Countryside’s books, records, financial statements, and other documents and information Thomas has a right to receive. Countryside 17 73-CV-23-9522 Filed in District Court State of Minnesota 12/5/2023 2:03 PM has, therefore, violated Minn. Stat. §§ 302A.461, subd. 4 and 302A.463. 90. As a result of Defendant Countryside’s failure to furnish Thomas with, and refusing Thomas access to examine and copy, Countryside’s books, records, financial statements, and other documents and information Thomas has a right to, Thomas has suffered and will continue to suffer damages in an amount to be proven with specificity at trial. 91. Thomas is entitled to an order compelling Countryside to furnish Thomas with, and grant Thomas access to examine and copy, Countryside’s books, records, financial statements, and other documents and information Thomas has a right to receive. 92. Pursuant to Minn. Stat. § 302A. 467, Thomas is entitled to reasonable expenses, including attorneys’ fees and disbursements. Count VII. Violation of Minn. Stat. §§ 302A. 551 & 302A. 557 (Improper Distributions) 93. Thomas realleges and reincorporates all of the allegations contained in the preceding paragraphs as though fully set forth herein. 94. Thomas is a shareholder and rightful owner of 24% of the outstanding capital stock of Countryside. In the alternative, Thomas is the beneficial owner of 24% of Countryside’s stock. 95. Minn. Stat. § 302A.551, subd. 4(1) provides that a distribution may be made to the holders of a class or series of shares only if all amounts payable to the holders of shares having a preference for the payment of that kind of distribution, other than those holders who give notice to the corporation of their agreement to waive their rights to that payment, are paid. 18 73-CV-23-9522 Filed in District Court State of Minnesota 12/5/2023 2:03 PM 96. Minn. Stat. § 302A.557 provides that a shareholder who receives a distribution made in violation of the provisions of section 302A.551 is liable to the corporation, its receiver or other person winding up its affairs, or a director under 302A.559, subdivision 2, but only to the extent that the distribution received by the shareholder exceeded the amount that properly could have been paid under section 302A.551. 97. Upon information and belief, Countryside’s articles of incorporation, bylaws, or the board of directors under Minn. Stat. § 302A.551, subdivisions 1 and 2, do not provide for distributions contrary to Minn. Stat. § 302A.551, subdivision 4(2)(b). 98. Upon information and belief, Defendants have approved improper profit distributions and Defendants Haversack, Warzecha, and Brady have received improper profit distributions in Defendant Countryside. Plaintiff is entitled to a 24% share of all profit distributions made to the shareholders of Defendant Countryside. 99. As a result of the aforesaid conduct, Plaintiff has suffered damages in an amount greater than Fifty Thousand Dollars ($50,000.00) to be proven with specificity at trial. 100. Pursuant to Minn. Stat. § 302A. 467, Thomas is entitled to reasonable expenses, including attorneys’ fees and disbursements. Count VIII. Violation of Minn. Stat. § 302A. 751, Subd. 2 (Equitable Buy‐Out on Motion) 101. Thomas realleges and reincorporates all of the allegations contained in the preceding paragraphs as though fully set forth herein. 102. Thomas is a shareholder of Countryside, holding 24% of its outstanding capital stock. In the alternative, Thomas is the beneficial owner of 24% of Countryside’s stock. 19 73-CV-23-9522 Filed in District Court State of Minnesota 12/5/2023 2:03 PM 103. Minn. Stat. § 302A.751, subd. 2 provides that a shareholder of a corporation may seek and receive equitable relief in the form of, among other things, corporate dissolution or a buyout when the directors or those in control of the corporation have acted fraudulently, illegally, or in a manner that is unfairly prejudicial toward the shareholder in their capacities as shareholders, directors, officers, or employees of a corporation. 104. Defendants Brady, Warzecha, and Haversack have acted fraudulently, illegally, and in an unfairly prejudicial manner toward Thomas in their capacities as shareholders, directors, officers, and/or employees of Countryside by, among other things: (a) Defendants Countryside, Brady, Haversack, and Warzecha have failed and refused to issue or otherwise acknowledge Thomas as a shareholder and owner of 24% of Countryside’s outstanding capital stock; (b) Defendants Countryside, Brady, Haversack, and Warzecha unfairly granted and caused to grant profit distributions in violation of Minn. Stat. §§ 302A.551 and 302A.557 by failing to grant distributions in proportion to Thomas’s 24% ownership interest in Countryside; (c) Defendants Countryside, Brady, Haversack, and Warzecha unlawfully failed and refused to notify Thomas of Countryside’s shareholder meetings during the years Thomas has been a shareholder of Countryside; (d) Defendants Countryside, Brady, Haversack, and Warzecha attempted to marginalize Thomas’s role in Countryside by, among other things, not allowing Thomas to vote for matters brought before the shareholders during shareholder meetings, not including Thomas in important decisions regarding the company, and otherwise not informing Thomas of his rights as a minority owner of Countryside; (e) Defendants Countryside, Brady, Haversack, and Warzecha continued to induce Thomas to reasonably rely on their initial agreement by actively making Thomas believe he was a shareholder of Countryside; (f) Defendants Countryside, Brady, Haversack, and Warzecha refused to respond to Thomas’s good faith requests for information, documents, and profit distributions to which Thomas was entitled under the law; 20 73-CV-23-9522 Filed in District Court State of Minnesota 12/5/2023 2:03 PM (g) Defendants Countryside, Brady, Haversack, and Warzecha unlawfully failed and refused to provide Plaintiff with access to examine Countryside’s financial documents in response to his written demands on December 6, 2019, December 7, 2019, and November 17, 2021, in violation of Minn. Stat. §§ 302A.461 and 302A.463; (h) Defendants Countryside, Brady, Haversack, and Warzecha unlawfully failed and refused to furnish Thomas with a copy of Countryside’s most recent financial statement in response to his written requests on December 6, 2019, December 7, 2019, and November 17, 2021, in violation of Minn. Stat. §§ 302A. 461 and 302A. 463; (i) After repeated requests from Thomas, Defendants Countryside, Brady, Haversack, and Warzecha finally agreed to meet with Thomas on November 6, 2019 to discuss his ownership interest. Soon after that meeting, on December 9, 2019, Defendants Brady, Haversack, and Warzecha offered to pay Plaintiff $20,000.00 to extinguish his claim of ownership in Countryside and Defendant W&B Holdings, an amount that represents a fraction of the fair market value of Thomas’s 24% ownership of Countryside’s outstanding capital stock; and (j) Defendants Countryside, Brady, Warzecha, and Haversack continued to act unfairly prejudicially towards Thomas throughout the offer of a buyout. Thomas inquired about the buyout price and Defendants Brady, Warzecha, and Haversack stalled, delayed, and refused to engage in due diligence, and negotiated with Thomas in bad faith. 105. As a result of Defendants’ fraudulent, illegal, and unfairly prejudicial actions, Thomas has suffered and will continue to suffer a loss of past and future incom