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Second request yields writ in Disthene case

The controlling shareholders in a closely held family corporation have won the chance to ask the Supreme Court of Virginia to block a court-ordered breakup of the company.

The granting of an appeal in the case involving The Disthene Group Inc. marks the second of two prominent cases last week in which disappointed litigants won an appeal from the Supreme Court after first striking out with a three-judge panel. In the other case, two families of Virginia Tech shooting victims won the chance to appeal a ruling that put a $100,000 cap on each family’s potential recovery.

The Supreme Court’s allowance of an appeal in the Disthene case puts a hold on plans to break up the family corporation and sell off its assets, which include a profitable Kyanite mine in Buckingham County and the somewhat less profitable Cavalier Hotel in Virginia Beach.

Circuit Judge Jane Marum Roush ordered the corporate dissolution in August based on her conclusion that majority shareholders engaged in a “squeeze out” of minority owners.

The majority owners failed to persuade members of a three-judge panel to grant an appeal, but their petition for rehearing found favor with at least one of the seven justices.

“Corporate governance will be thrown into confusion” by Roush’s ruling, the majority owners argued in their petition for rehearing, according to the Richmond Times-Dispatch.

The writs granted in the Disthene and Virginia Tech cases affirm the vitality of the Supreme Court’s procedures for requesting a “second look” by the court.

Requests for appeals are initially considered by panels of three justices. A petition for rehearing is circulated to all of the sitting justices and any one of them can grant a rehearing and allow the appeal.

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