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Former exec wins partial victory in business litigation appeal

It is not unusual in Oregon and elsewhere for former executives to be pitted in litigation with the companies that they previously served, and in some instances, by the companies that they founded. This type of business litigation is currently occurring in several high-profile cases. One of the cases from another state involves the former chief executive and founder of Cirrus Aircraft.

Alan Klapmeier, who founded Cirrus some 30 years ago, departed from the company in 2009. He sued Cirrus in 2012, claiming that the company disparaged him in violation of an agreement signed by both parties after his 2009 departure. He said that the former CEO of Cirrus defamed his reputation in the industry and made it difficult for him to raise funds for a new aircraft venture.

He won a $10 million jury verdict in that case, but Cirrus appealed. The appellate court reversed the jury verdict and dismissed his claims. Cirrus then filed for reimbursement of expenses that incurred while raising a surety bond during the appeal and for other expenses totaling $942,000. The court granted Cirrus payment of nearly $672,000. Klapmeier appealed that order to the Minnesota Supreme Court, which cut more than $542,000 from the award in favor of Cirrus, leaving about $129,000 in costs still due.

The case shows how fortunes can rise and fall in business litigation cases involving claims between former executives and the companies that they founded and/or led to success. The proceedings described are procedurally in line with how a similar case might be handled in the Oregon trial and appellate courts. The decision also makes the point that certain types of expenses that a company incurs in making an appeal are not going to be reimbursable to the victorious appellant.

Source: prairiebusinessmagazine.com, “Supreme Court slashes fees owed by ex-CEO to Cirrus Aircraft”, Tom Olsen, Aug. 17, 2017

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