JACKSON, Miss.-A U.S. district court judge has granted summary judgment in favor of three defendants, including farm tire maker Titan Tire Corp., in a lawsuit stemming from Titan's 1997 takeover of Condere Corp. and its Fidelity Tire Manufacturing Co. facility in Natchez, Miss.
On May 8, Judge William H. Barbour of the U.S. District Court for the Southern District of Mississippi ordered summary judgment for defendants Titan, Citicorp Venture Capital and 399 Venture Partners in the suit brought by specialty tire and wheel maker Galaxy Tire Inc.
The suit alleged the defendants ``tortiously breached'' a Condere stockholders agreement under which if one shareholder decided to sell shares in the company, then other key shareholders could participate in that sale on a pro rata basis.
Galaxy in the suit claimed the defendants interfered in its intent to co-sell shares by conspiring to ``deprive Galaxy of the value of its ownership interests in Condere,'' court records said. Another defendant, OTR Wheel Inc., was dismissed from the case in October because of lack of personal jurisdiction.
Galaxy, which purchased a 23-percent share in Condere in the fall of 1996, sought to participate in the sale of shares to Titan parent Titan International Inc. by early 1997 because it didn't want to be a shareholder with a major competitor in the off-the-road tire market.
Galaxy also didn't want to see its investment in Condere further diluted if Titan put financially troubled Condere and its Fidelity operation into bankruptcy.
Condere did file for bankruptcy on May 13, 1997, and one day later Titan CEO and President Maurice Taylor Jr. was named to the same positions at Condere.
Galaxy managed to sell some of its shares through the key shareholders agreement.
However, it claimed Citicorp and 399 Venture Partners, which had notified Galaxy of their intent to sell shares to Titan, entered into a ``side deal'' with Titan to receive compensation in exchange for retaining their shares in Condere and thus deny Galaxy a chance to co-sell more shares.
Mr. Barbour, however, agreed with Titan and the other defendants on alleged counts of breach of contract, fraud and civil conspiracy and granted their motions for summary judgment. The judge opined that there was no tortious interference with Galaxy's business dealings because the defendants' decisions were made to benefit themselves and not to hurt Galaxy.