Appeals court affirms decision on Lund fortune.

Byline: Dan Heilman

If you've found yourself captivated by the squabbling over the Lund family grocery fortune, stay tuned: There might be more fighting to come.

In an opinion published last week, the Minnesota Court of Appeals affirmed an earlier decision by the Hennepin County District Court holding that Kim A. Lund may negotiate a buyout for her share of the Lund estate with her estranged siblings.

Kim Lund, the eldest of four Lund siblings who equally own the Lunds & Byerlys grocery chain, had in 2014 sued Lunds and its CEO her brother Russell "Tres" Lund III to cash out of the company, which also has real estate holdings. She sought damages, a buyout of her interests, removal of Tres Lund and Stanley Rein as trustees of her trusts, attorney fees, expenses, and other relief.

In July 2016, her buyout motion was granted in Hennepin County District Court. The trial court denied Tres Lund's summary-judgment motion on Kim's claims of unfairly prejudicial conduct and equitable relief claims, but did grant summary judgment motion on her claims of breach of fiduciary duty and civil conspiracy claims.

Following a five-day trial in 2017, Hennepin County Chief Judge Ivy Bernhardson awarded Kim Lund $45.2 million for her stake in the chain, roughly splitting the difference between than the $80 million she had sought and the $21.3 million she had been offered. Tres Lund, who now is the only one of the four Lund siblings still involved in the family business, appealed.

Equitable remedy?

The Court of Appeals was asked to decide whether the District Court should have granted the buyout, determined fair value, shot down the breach-of-fiduciary-duty claims and other issues.

Tres Lund's main argument on appeal was that the District Court erred as a matter of law in granting Kim's buyout motion. Lund and his co-appellants maintained that a decision on a buyout motion is akin to summary judgment or a directed verdict and is therefore subject to de novo review. Kim Lund argued that the proper standard of review is abuse of discretion because a buy-out is an equitable remedy.

Under the Minnesota Business Corporation Act and the Minnesota Limited Liability Company Act, a District Court "may grant any equitable relief it [finds] just and reasonable in the circumstances" if individuals in control of the corporation or LLC have acted "in a manner unfairly prejudicial" toward another shareholder or member.

Thus, the District Court concluded it is appropriate to...