Buyout in beef jerky case upheld by SD Supreme Court
January 3, 2010
by Meat&Poultry Staff
PIERRE, S.D. — On Dec, 30, the South Dakota state Supreme Court ruled that LSI Inc., a South Dakota affiliate of Link Snacks Inc., one of the world's largest beef jerky companies, must pay a son of the company's founder more than $16.5 million for his shares of the subsidiary, according to The Associated Press. Jay Link, son of Jack Link, Wisconsin-based Link Snacks Inc. founder, had contended he should be paid $21 million for his share of LSI Inc., a South Dakota operation that makes products that are sold to Link Snacks.
The Supreme Court unanimously upheld a circuit judge's decision to set the fair value of Jay Link's shares at $16.55 million. The justices also affirmed the trial judge's decision to let LSI pay the money over a five-year period, but they ordered the judge to enter findings on whether the company has to post security to cover those payments.
This dispute is part of a larger battle involving the family that owns Link Snacks. The fight has pitted Jack Link, company founder and CEO, against his son, Jay Link, who contends he was unfairly cut out of the business by his father and brother, Troy Link, in 2005. The Wisconsin Supreme Court heard oral arguments in October in an appeal that involves how much Jack and Troy must pay Jay for companies located there and whether Jack has to pay his son punitive damages.
Based in Alpena, S.D., LSI was owned by brothers Jay and Troy when litigation began. Each owned half the shares. Jay no longer has ownership in this business, stated a company spokesman.
Three appraisers gave their opinions on the value of LSI, and two said Jay's share was worth $16.55 million. Circuit Judge Jon R. Erickson ruled after a non-jury trial that LSI could buy Jay Link's shares for that amount over a five-year period at an interest rate of 4.5%.
“We are pleased with the outcome of the South Dakota Supreme Court’s ruling,” John Hermeier, corporate spokesperson and CFO, Jack Link’s Beef Jerky, told MEAT&POULTRY.com. “The Supreme Court evaluated all of the facts and unanimously upheld the circuit judge’s decision; a decision that was fair and equitable.”