Carlos Omes, as Personal Representative of the Estate of Alejandro "Alex" Omes, Appellant,
Ultra Enterprises, Inc., Appellee.
final until disposition of timely filed motion for rehearing.
appeal from the Circuit Court for Miami-Dade County Lower
Tribunal No. 12-40288, Jennifer D. Bailey, Judge.
& Magolnick, P.A. and Joel S. Magolnick, for appellant.
& Valori LLP and Peter F. Valori and Russell Landy;
Akerman LLP and Gerald B. Cope, Jr., for appellee.
ROTHENBERG, C.J., and SUAREZ and LOGUE, JJ.
appeal arises out of a bench trial in which the issues were
presented through testimonial evidence and numerous
documents. The numerous issues are complex and the trial
court issued a 16-page findings of fact and law. The trial
court's order is specific, well-researched and reasoned,
and, in our view, correct in all aspects. We address this
opinion only to the issues raised on appeal and have
attempted to boil them down and address each as simply and
directly as possible.
Omes and Russell Faibisch founded Ultra Enterprises, Inc.
["UEI"] for the purpose of holding the intellectual
property of the Ultra Music Festival ["Ultra"],
founded in 2002. UEI owns the trademarks and licenses
associated with Ultra. UEI used other corporate entities for
producing the music festival, licensing and promotion.
Festival Productions and Ticket Junkie were two of these
entities. UEI held no stock in either entity but Omes was a
shareholder in both.
and Russell were the only two partners of UEI until 2005,
when they brought in Russell's brother, Charles Faibisch,
who also brought with him a much needed cash infusion. The
three signed a Memorandum of Understanding ["MOU"]
in 2005. That document joined Charles as a shareholder, gave
him 300 shares, set forth the general duties of each person,
and stated an "intent" that Omes and Russell be
co-managers. Omes served as President and Russell as chairman
of the Board of Directors. In 2010, Adam Russakoff joined
Ultra as a 10% shareholder. That same year, the Board hired a
new accountant, who found the books to be in total
disarray. The accountant found no fraud or misconduct,
just poor recordkeeping. The accountant was able to
reconstruct and reconcile UEI's books, which became the
basis for the valuation in this case.
Ultra became more successful, the record indicates that Omes
began using his Ultra contacts and influence to set up side
deals for himself. This situation progressed to the point
where Russell became concerned that Omes was diminishing the
value and uniqueness of Ultra by using his Ultra connections
and reputation to compete with Ultra on the side. In August
2010, the UEI Board of Directors removed Omes as President,
citing self-dealing at UEI's expense and failure to
communicate and share equally in corporate decision-making.
Russell became President. Omes then became a minority
shareholder at 30%, without office.
11, 2012, because of Omes's continuing actions, the Board
of Directors by unanimous written consent recommended that
the shareholders amend the articles of incorporation to
prohibit self-dealing and competition with UEI by UEI
shareholders, and to provide UEI with the right to redeem the
shares of, inter alia, a shareholder who has
competed with UEI. Also on July 11, 2012, those shareholders
owning a majority of the common stock of UEI (70%) accepted
the recommendation of the Board of Directors and amended the
articles to so provide. The shareholders did this by a
Written Consent. Following the amendment, on the same day,
the directors of UEI voted unanimously to redeem Omes's
shares based on his self-dealing and competing personal
businesses. Omes was notified that same day of the
Board's actions and of his right to appraisal to
determine the value of his shares. The form provided to Omes
explained that in order to exercise his appraisal rights, he
needed to return the documents, an Exercise of Appraisal
Rights form and Stock Power form, on or before August 20,
2012. On August 20, 2012, Omes served Ultra with his Exercise
of Appraisal Rights form, which stated that Omes exercised
his appraisal rights and tendered his stock but did not
accept UEI's valuation of $1, 200 per share. Omes instead
offered a counter-valuation of $111, 111.11 per share. UEI
then ceased doing business with Ticket Junkie and Festival
Productions and contracted with entities having no connection
with Omes. Omes then filed the underlying suit against UEI,
and Russell and Charles Faibisch, and Adam Russakoff as
individuals, invoking the appraisal process while at the same
instance objecting to it.
response, UEI filed a one-count complaint to establish the
fair value of Omes's shares. See §
607.1330(1), Fla. Stat. (2016). The trial court, after taking
evidence and hearing argument of the parties, concluded that
1) the appraisal process was properly invoked, and found in
favor of UEI; 2) dissolution was not available as a remedy
where there was no deadlock between directors; 3) the
appraisal value of Omes's stock by Omes's appraiser
was rejected by the trial court as without realistic basis,
and the appraisal of Omes's stock by UEI's appraiser
was adopted by the trial court as supported by competent
substantial evidence. Carlos Omes ["Estate P.R."]
is the personal representative of the Estate of Alex Omes,
who died during the pendency of the litigation below. He
seeks to reverse the trial court's conclusions and to be
installed as Alex Omes's replacement as President of UEI.
Estate P.R. argues in this appeal that the MOU is in reality
a shareholder agreement. The trial court rejected that
argument, as do we. The MOU is not, according to section
607.1302(4), Florida Statutes (2016), an article of
incorporation, bylaw, or a board of director's
resolution. The MOU does not fall within any statutory
exception. As the trial court pointed out, the MOU may act as
a shareholder agreement, but it did not prohibit the
corporate actions at issue here. See Foreclosure
FreeSearch, Inc. v. Sullivan, 12 So.3d 771, 778 (Fla.
4th DCA 2009) ("The majority shareholder has a right to
engage the appraisal process to eliminate the rights of
dissenting shareholders and put an end to corporate strife.
The process must produce a fair result for the minority
Estate P.R. also argues that Omes should have had pre-consent
and post-consent notice of the Board's amendments to the
articles of incorporation. The trial court determined that
there was no procedural prejudice to Omes and no evidence the
outcome would have been any different. As the trial court
stated, "that to return these shareholders to square one
so that a pre-vote notice can be given to Omes's Estate
and a new and fruitless vote be taken with notice before and
after, would be inequitable and is unnecessary to protect any
rights of any party in this case." In any event, section
607.0704, Florida Statutes (2016), provides that, unless
otherwise provided in the articles of incorporation, a
majority of the shareholders of a corporation can take action
without a meeting, without prior notice, and without a vote.
The only ...