PIERRE, S.D. (AP) — A South Dakota subsidiary of one of the world's largest beef jerky companies must pay a son of the company's founder more than $16.5 million for his shares of the subsidiary, the state Supreme Court ruled Thursday.
Jay Link, a son of Wisconsin-based Link Snacks Inc. founder Jack Link, had contended he should be paid $21 million for his share of LSI Inc., a South Dakota operation that makes products that are sold to Link Snacks.
The Supreme Court unanimously upheld a circuit judge's decision to set the fair value of Jay Link's shares at $16.55 million. The justices also affirmed the trial judge's decision to let LSI pay the money over a five-year period, but they ordered the judge to enter findings on whether the company has to post security to cover those payments.
The South Dakota dispute is part of a larger 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 heard oral arguments in October in an appeal that involves how much Jack and Troy must pay Jay for companies located there and whether Jack has to pay his son punitive damages.
Jon Sogn of Sioux Falls, a lawyer for Jay Link, said he could not comment on the Supreme Court ruling because the case is headed back to circuit court for further proceedings on some issues. An attorney for LSI did not immediately return a call seeking comment Thursday.
LSI, which is based in Alpena, S.D., is owned by brothers Jay and Troy. Each owns half the shares.
Three appraisers gave their opinions on the value of LSI, and two said Jay's share was worth $16.55 million. Circuit Judge Jon R. Erickson ruled after a non-jury trial that LSI could buy Jay Link's shares for that amount over a five-year period at an interest rate of 4.5 percent.
Jay Link argued that the circuit judge mistakenly reduced the value because of the risks to an outside buyer. Appraisers said a third-party buyer would be leery of investing in a privately held company that sells to only one customer, Link Snacks.
The Supreme Court said the circuit judge used an appropriate method to set a value for LSI Inc. The judge properly determined it would be unfair to apply a discount because of a lack of other potential buyers, and the fact that LSI sells to only one customer was one of many factors considered by the appraisers, the high court said.
Jay Link had asked that LSI pay him immediately or post security to cover the monthly payments.
The Supreme Court said it cannot rule on the issue of security because the circuit judge has not yet made findings on that issue. The justices also said the circuit judge must consider LSI's request to scrap his earlier order requiring that the company pay Jay Link nearly $3 million in accrued interest from the time he filed his lawsuit in 2005 until the case was decided in 2009.
Link Snacks, headquartered in Minong in northwestern Wisconsin, has operations in Wisconsin, South Dakota, Iowa and New Zealand, with more than 1,000 employees worldwide. It's known for its "Messin' with Sasquatch" ad campaign.