SIOUX FALLS, S.D. (AP) — The state Supreme Court stepped into a years-long family dispute involving one of the world's largest beef jerky companies Tuesday, when the son of the Wisconsin company's founder asked justices for a better valuation of a South Dakota subsidiary.
Jay Link, a son of Link Snacks Inc. founder Jack Link, contends that a circuit judge undervalued his shares of LSI Inc. when he ruled they were worth $16.55 million.
Attorney Jon Sogn asked the South Dakota Supreme Court on Tuesday to direct that Jay Link's shares of LSI be purchased for $21 million or order a new trial to set the shares' value.
Sogn argued that the circuit judge mistakenly discounted the value because of the risks to an outside buyer. Appraisers had said a third-party buyer would be leery of investing in a privately held company that sells to only one customer, corporate parent Link Snacks.
"You don't look at the discounts that would be applicable to a hypothetical third-party buyer," Sogn said. "You look at the economic realities of the situations."
Attorney Brian Norton, representing LSI, argued that the circuit judge was not discounting the value of Jay Link's shares but properly looking at what the company is worth.
"If a corporation has one customer, it's not as valuable as a corporation that has multiple customers," Norton said.
The feud is a small part of a battle involving the family that owns Link Snacks, which calls itself the fastest growing meat snack manufacturer in the world. The dispute has largely been centered in Wisconsin, where the company is based.
The fight has pitted company founder and chief executive Jack Link 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 on Oct. 6 heard oral arguments in the appeal, which involves how much Jack and Troy have to pay Jay for companies located there and whether Jack has to pay his son punitive damages.
Alpena, S.D.-based LSI is owned by Jay Link and his brother Troy. Each own half the shares.
Circuit Judge Jon R. Erickson ruled after a non-jury trial that LSI could buy Jay Link's shares over a five-year period at an interest rate of 4.5 percent.
Sogn asked the high court to order that LSI pay him immediately or post security.
Norton said LSI should not have to pay interest to Jay Link, because he used his shares as security to get a bank loan several years ago, so interest would pay him twice for the use of his shares.
Links Snacks, headquartered in Minong in northwestern Wisconsin, has operations in Wisconsin, South Dakota, Iowa and New Zealand, and more than 1,000 employees worldwide. It's known for its "Messin' with Sasquatch" ad campaign.