Orange County Choppers' Junior wins round

Dec 26, 2010

Paul Sr. can't force stock sale, court decides

GOSHEN — Paul Teutul Sr. can't force Paul Teutul Jr. to sell his 20 percent interest in Orange County Choppers Holding Inc., an appeals court ruling has determined.

As the Discovery Channel begins its new season of "American Chopper," featuring the Teutul family feud, the year-old lawsuit between the battling father-and-son custom motorcycle builders continues.

In January 2009, Paul Sr. and Paul Jr. hashed out an agreement to define their professional relationship, something they had to do to avoid violating their contract with Discovery. The document included an option that Paul Sr. said gives him the power, at his discretion, to buy out Paul Jr. for fair market value. They agreed to settle at a later date just how to determine fair market value. In late 20009, Paul Sr. filed the lawsuit to force the sale.



Agreement language too vague

In April, Orange County state Supreme Court Justice Lewis Lubell ruled for Paul Sr., saying a hearing should be held so a neutral appraiser, and the court if needed, could set the fair market value of Junior's shares. Paul Jr.'s lawyers appealed.

The Appellate Division, Second Department of state Supreme Court, ruled last week that the clause Paul Sr. tried to exercise to make Paul Jr. sell him his interest in Orange County Choppers Holding Inc. is too vague.

"The Second Department has determined that what Senior was calling an 'option,' basically to force Paul Jr. to sell his shares in OCC, is not valid and not enforceable," said Paul Jr.'s lawyer, James Burke of Larkin, Axelrod, Ingrassia & Tetenbaum in Newburgh. "He can't compel Junior to sell his shares."

Back in court in January

Paul Sr.'s lawyer, Richard Mahon II of Tarshis, Catania, Liberth, Mahon & Milligram in Newburgh, said the decision doesn't really change anything. Paul Jr. is still a shareholder. But it does affect the case. "The option would have provided us with a fast way to get to the valuation phase," Mahon said. "We have to either agree among ourselves, or we have to find some other mechanism" under state business law.

The case was due back in court in January, but Lubell is being transferred to Putnam County, and it's unclear which judge will get the Teutuls' case.

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