A jury has found the former CEO of an Aumsville-based construction company wrongfully refused to sell his shares after he was fired in 2022, with the buyback value to be determined later.
On April 8, a 12-person jury rendered a verdict in Silbernagel vs. HP Civil Inc., et al, in Marion County Circuit Court following a trial that began March 31.
The jury found former HP Civil CEO Roger Silbernagel breached the terms of a buy-sell agreement when he refused to sell his shares following his termination May 31, 2022.
A hearing is set for May 5 for Judge Lindsay Partridge to determine the value of Silbernagel’s shares, which represent a 44.4% stake in the company. HP Civil has valued the shares at $4.6 million, while Silbernagel is prepared to argue they are worth more than $4 million above this valuation.
At issue is whether or not the shares should be valued at book rate, which reflects the company’s current assets and liabilities, or at market rate, which additionally considers current and future profits. According to court records, defendants argue the buy-sell agreement stipulates book rate, while Silbernagel argues these terms only apply if the buyback of shares is voluntary.
Silbernagel sued June 28, 2022, claiming wrongful termination, retaliation and unjust enrichment, and sought $15 million in damages. He said he was fired while looking into claims that his son, an HP Civil employee at the time, was the target of alleged racial discrimination by co-workers.
The defendants denied this claim and said Silbernagel was fired due to concerns over alleged nepotism, alleged opposition to bringing on new shareholders and other behaviors causing friction with existing shareholders.
The jury found Silbernagel did not prove his claim of retaliation.
After Silbernagel was fired, remaining shareholders Larry Gescher and Josh Smith offered him $6.3 million for his shares in June of 2022. Silbernagel refused, with his suit saying this offer “grossly undervalued” the shares.
In February of 2023, HP Civil’s accountant, who had prepared the initial offer, told Gescher and Smith there had been a miscalculation and Silbernagel’s shares should be valued at $4.6 million. Silbernagel was approached with this amended valuation and again refused to sell.
Silbernagel claimed in his suit Gescher and Smith breached their fiduciary duties when providing the erroneous initial offer. The jury found in favor of this claim and awarded Silbernagel $100,000 each from Gescher and Smith.
The jury also found Silbernagel wrongfully retained a company laptop worth $400. A work truck in dispute by the company was found by the jury to be Silbernagel’s property.
