A 67-year-old family-owned mining business could be broken up and parceled out under a judge’s “drastic” remedy for the company’s oppression of minority shareholders.
Fairfax County Circuit Judge Jane Marum Roush concluded the Disthene Group Inc. – which owns a profitable Kyanite mine in Buckingham County – is controlled by a domineering shareholder who is “unlikely ever to treat the minority shareholders fairly.”
Roush’s decision to split up the business is a victory for three descendents of the company founder who claimed – in two separate lawsuits – that they were wrongly deprived of shares and profits by company president Gene Dixon Jr.
Roush heard evidence in the case over three weeks in rural Buckingham and Thursday delivered a 41-page letter opinion that represents an almost complete victory for the minority shareholders and a repudiation of Dixon’s practices.
Thomas Wolf of Richmond, lead counsel for the plaintiffs, said he thinks Roush’s opinion will be cited for years to come. “It shows there are protections for minority shareholders,” he said.
The opinion shows the need to change the prevailing view that a corporation can be run for the benefit of the controlling shareholders without regard for the rights of those out of power, said John Craddock, another lawyer for the plaintiffs.
Counsel for the defendants did not immediately respond to a request for comment.