GBJ Corp. v. Eastern Ohio Paving Co. (139 F.3d 1080, 1998)

OPINION

BOGGS, Circuit Judge.

Plaintiffs’ claims, stemming from the defendants’ alleged improper seizure of a corporation, were dismissed by the district court on summary judgment. G.B.J. Corp. v. Eastern Ohio Paving Co., 950 F.Supp. 816 (N.D.Ohio 1996) [GBJ I]. The plaintiffs appeal. We affirm in part and reverse in part, and remand this case for further proceedings.

I

A

The plaintiffs are all associated with Lightweight Environmental Products Corp. (LEP-CO). Patrick Callanan is (or was) the president and sole stockholder of LEPCO. GBJ and Topaz Capital Corporations hold promissory notes from LEPCO, and GBJ has an option to purchase 25% of LEPCO’s stock. Jeffrey Gelmin is the president and sole shareholder of Topaz and GBJ.

The defendants are connected to Eastern Ohio Paving Company (EOP). Glenn Straub is the president of EOP, Jeffrey Zink is its counsel, and Fred Leistiko was a consultant and an alleged agent of EOP in the events underlying this case. When distinguishing the individual roles of the defendants is unimportant, the defendants will be referred to as “EOP” or “the defendants.”

B

In October 1989, a company called Sequa loaned $700,000 to LEPCO, which secured the loan with the whole of its stock. Eventually, Sequa filed suit against LEPCO for nonpayment of this debt and obtained a default judgment for $849,769.

In their verified complaint, the plaintiffs offer a detañed version of events — the bulk of which the defendants either contradict or deny — that runs as follows. In 1992, EOP expressed interest in infusing LEPCO with capital and taking control of it, and the two sides began negotiating. At the defendants’ request, Callanan negotiated discounted settlements of LEPCO’s outstanding debts, which EOP agreed to pay. The keystone of these dealings was EOP’s proposed purchase from Sequa of the judgment against LEPCO.

On June 8, the plaintiffs allege, the two sides reached a detaüed oral agreement, whose terms were as follows:

1. Straub and EOP would buy Sequa’s judgment against LEPCO for $325,-000.

2. Straub and EOP would buy promissory notes that LEPCO owed to GBJ, Topaz, and another company, for 50