Information Technology Reference
In-Depth Information
counsel, to probe the guarantors' interest in either selling their
shares to him or, at least, getting off the line of credit guaran-
tees. He suggested that he could possibly offer them $500,000,
one half immediately upon closing the deal, and the rest later
according to a mutually agreed upon schedule. Unfortunately,
after several meetings with the guarantors Beattie had nothing
optimistic to report: the guarantors seemed uninterested in get-
ting out of
MCM
or giving up control of the company. That
deeply upset Kutt, as the rejection of his offer shattered any
hopes for a fast and non-confrontational solution to the conflict.
“I'm biggest loser,” wrote Kutt in his notes, reminiscing about
his August meetings with Beattie. He concluded that selling
his stock in the company was the best move for him. What he
had in mind was selling 100,000 of his shares for $4 per share.
That would mean, of course, losing his majority shareholding
position. He would keep $56,000 to himself and would offer
the remaining $344,000 to purchase the rights from
MCM
to
manufacture and sell
MCM
products through a new company
he would form and call
MCM
International. That was the
Kutt/
MCM
Agreement in a nutshell. “I'm discussing with the
other directors and some major shareholders the concept of the
'
MCM
/Kutt Agreement,'” wrote Robertson to Beattie on 22
August, acknowledging the receipt of Kutt's proposal.
A few days later, Kutt learned about the rejection of his Kutt/
MCM
Agreement in Robertson's 26 August letter to Beattie. “I
have now had an opportunity to speak to the other directors
and some major shareholders of
MCM
regarding the '
MCM
/
Kutt Agreement,'” wrote Robertson. “Their reaction to the
draft … [of the Agreement] was uniformly negative.” It is likely
that the proposed agreement was seen by the guarantors as
Kutt's attempt to irritate them rather than to solve the conflict
constructively. According to the proposed Kutt/
MCM
Agree-
ment, Kutt was to give up his controlling shares for the right to
