Texas company sued for not repurchasing $1.5 million in founder's stock
SHERMAN - A New Hampshire man who started a Texas business is now suing the business in order to enforce a contract that forces the business to repurchase the man's business shares.
Claiming breach of contract, Daniel S. Katavola filed suit against HRchitect Inc. on March 1 in the Eastern District of Texas, Sherman Division.
Katavola formed HRchitect in November 1999 and holds 1.5 million shares. His employment with the company terminated in 2011.
Under a buyback agreement, executed in March 2000, when a shareholder is terminated they are required to sell their shares back to HRchitect and the company is required to purchase those shares.
The agreement stated that the value of the corporation for purposes of shareholder buyback was $1 per share or the total value of the company divided by the total outstanding shares of stock.
Katavola states that at his termination the company offered to repurchase his shares for his pro rata share of the net book value of the corporation, which was $147,440. Katavola responded that he HRchitect could repurchase the shares for $1.5 million. HRchitect has not responded to his offer.
The plaintiff is asking the court for an award of $1.5 million actual damages, interest, attorney's fees and court costs.
Katavola is represented by Jason P. Fulton of Diamond McCarthy LLP in Dallas. A jury trial is requested.
U.S. District Judge Richard A. Schneider is assigned to the case.
Case No. 4:12-cv-00120