Kim Lund’s $45 million court victory to cash out her fortune in Lunds Inc. will stand.
The Minnesota Supreme Court on Wednesday denied Lunds Inc.’s petition to overturn a lower court award to Kim, the oldest of four Lund siblings who own Lunds & Byerlys, a well-known Twin Cities supermarket chain.
Kim Lund five years ago sued Lunds and Russell “Tres” Lund III — her brother and the company’s CEO — for breach of fiduciary duty, among other claims. She had been trying for several years to free up her 25 percent stake in the company, but amicable attempts had failed.
After a five-day trial in 2017, Hennepin County Chief Judge Ivy Bernhardson awarded Kim Lund $45.2 million for her ownership in Lunds. That was less than the $80 million she sought, but more than double the $21.3 million that Lunds had offered.
Bernhardson ruled that Kim Lund was the “prevailing party” — the winner in legal terms.
Lunds challenged the ruling before the Minnesota Court of Appeals, contending Kim Lund couldn’t sell her stake without written unanimous consent of the other three sibling shareholders. The appeals court disagreed in January, so Lunds took the case to the Supreme Court last month.
In its petition, Lunds said the appeals court set a “dangerous precedent” on the legal interpretation of shareholder agreements. Kim Lund argued that Lunds’ petition to the Supreme Court didn’t present any new or unique legal arguments.
The Supreme Court on average hears only 12 to 13 percent of the petitions it receives annually.
In a statement, Kim Lund’s attorneys said she was “very pleased” with the Supreme Court’s decision and “that this matter is finally coming to a close.” Kim Lund looks forward to “what she has been promised for decades — liquidity and financial independence.”
The $45 million award will create a significant financial obligation for the Edina-based company.
Lunds, in a statement, said that it was “disappointed” with the Supreme Court’s decision. But it “will comply with the lower court’s decision while also moving forward with a continued focus on growing our presence in this market and further elevating the shopping experience for our customers.”
Lunds was founded 80 years ago by Kim and Tres Lund’s grandfather, Russell T. Lund Sr. Lunds merged with Byerly’s in 1997.