Lucas Price sued brother Dan Price last year, alleging Dan violated his rights as a minority shareholder of Gravity Payments, the credit-card payment-processing company they co-founded in 2004.
A trial that pitted brother against brother over control of their small business ended Thursday without an expected ruling, but with a deal between the two parties to enter mediation.
In the case, heard in King County Superior Court, Lucas Price sued brother Dan Price last year, alleging Dan violated his rights as a minority shareholder of Gravity Payments, the credit-card payment-processing company they co-founded in 2004. Lucas Price said Dan, who serves as the company’s CEO, paid himself excessively, charged hundreds of thousands of dollars in personal expenses to the company and cut Lucas out of major decisions.
Dan Price has maintained that the charges are false, with his legal team calling on expert witnesses and employees to testify that his compensation was reasonable compared to the market and the amount of work Dan puts into the company.
Gravity Payments is best known for its $70,000-a-year minimum wage — an initiative by Dan Price that both sides concede did not play a part in the lawsuit but has been cited many times during the trial. The lawyer for Lucas Price used it as an example of Dan Price’s attempts to cut Lucas out of major decisions.
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Judge Theresa B. Doyle concluded the trial Thursday after closing arguments and acknowledged that the two parties had asked to try mediation one more time before she decided the case from the bench.
“This is highly unusual, you need to understand,” Doyle said, referring to her allowing mediation after the case had been submitted to the bench. “And I assume your negotiations will be in good faith. That’s why I’m doing this.”
Dan Price testified during trial that he could not afford to buy out Lucas Price’s shares, the resolution Lucas is seeking, for the presumed value of $26 million. Lucas Price owns about a third of the company; Dan controls the rest.
“There’s nowhere I could get $26 million that I know of,” Dan Price said last week when questioned by his own attorneys.
Greg Hollon, attorney for Lucas Price, contended in closing arguments Thursday that testimony from an expert witness suggested Gravity Payments could afford to pay $2 million or more each year, plus a down payment, as a way to pay Lucas over time.
“This is not flushing money down the drain,” Hollon said. “This is Dan buying, at a 2015 price, a company that keeps growing.”
Hollon proposed that the judge should allow an expert in investor relations to decide on the exact terms of a buyout.
In their closing arguments, Dan Price’s lawyers countered by saying there was no evidence that Dan breached 2008 shareholder’s agreement, which is at the center of the lawsuit. Attorney Paul Dayton argued that Dan’s leadership had “yielded substantial returns on investment for both himself and Lucas Price.”
The judge indicated that she would give a ruling on July 7 if the parties fail to reach a settlement.