In the
United States Court of Appeals
For the Seventh Circuit

Nos. 99-1827, 99-1925, 99-1934, and 99-1957

Krueger International, Inc., Mark
R. Olsen, Richard J. Resch, et al.,

Plaintiffs-Appellants, Cross-Appellees,

v.

Julie Blank, et al.,

Defendants-Appellees, Cross-Appellants.



Appeals from the United States District Court
for the Eastern District of Wisconsin.
No. 97-C-570--J.P. Stadtmueller, Chief Judge.


Argued January 4, 2000--Decided August 25, 2000



      Before Cudahy, Kanne, and Diane P. Wood, Circuit
Judges.

      Diane P. Wood, Circuit Judge. Perhaps death and
taxes are the only true certainties, but close
behind must be the risk of dissension when death
occurs and those left behind try to divvy up the
assets. If some of those assets are shares in a
closely held corporation, the problems only get
worse. In this case, different combinations of
the interested parties have been litigating since
the 1992 death of the central figure, Robert
Blank, about the way in which his retirement fund
should be allocated and valued. (We shall refer
to the different Blank family members by their
first names, because Robert’s wife Julie Blank
also figures prominently in the case.) The piece
of the dispute that is now before us concerns the
relation between the ERISA plan operated by
Robert’s employer, Krueger International, Inc.
(KI), and the stockholder agreement between
Robert and KI that arguably governed the KI
shares invested in the ERISA plan. The answer to
that question in turn tells the parties what they
really want to know, which is how much money KI
must pay to Robert’s beneficiaries. If the answer
is determined by the 1992 value of the KI stock,
as KI argues it is and as the district court
held, then the beneficiaries are entitled to
roughly one-fourth of what they would receive if
it is determined by the 1996 or 1997 value of the
stock. As we explain further below, we are in a
position to resolve this question in principle in
favor of KI’s position, but a critical point
remains that may yet entitle the beneficiaries to
the payment they want. We are therefore reversing
and remanding this case for further proceedings
before the district court.

I

      Robert worked for KI from 1969 until his death
in 1992. During his time there, he saved for
retirement through KI’s Salaried Employees
Retirement Plan (SERP). Under the terms of the
SERP, plan participants could either invest in
the general plan fund (and thus receive the
returns that everyone else received) or instead
create a "Directed Investment Account," which
allowed participants to "monitor and direct the
holding and subsequent disposition" of their
investments. SERP sec. 4.10(a). Of course, that
also meant that the individual participant bore
the risk of loss and enjoyed the opportunity for
gain in conjunction with her investment
decisions. Consequently, the SERP provides that
"[a]ny portion of a Participant’s Directed
Investment Account invested in a specific
investment shall be accounted for separately.
Income and expenses directly attributable to a
Participant’s specific investment shall be
charged to the account." SERP sec. 4.10(b).

      Robert decided to create a Directed Investment
Account and thought that he should invest in his
own company’s stock. Because KI is not a publicly
traded company, however, it imposes various
restrictions on its shareholders. These are
contained in the KI Stockholders Agreement (SA).
Robert executed the SA in 1986 and also signed on
to a collection of amendments in 1990. Three
provisions of the SA and amendments are relevant
to our case:

(1) SA sec. 4.4 provides that upon the death of
the employee-shareholder and upon written notice
from KI within 90 days of the event, "[KI] shall
have the option to redeem all (but not less than
all) of the stock of KI."
(2) Under SA sec. 6.1, when the stock is
returned to KI, it is valued at "the
proportionate value of the Appraised Value of all
shares [of KI stock] as of the last day of the
fiscal period . . . ending on or immediately
preceding . . . the date of notice of exercise of
the option [to repurchase shares from the
deceased employee under SA sec. 4.4]."

(3) The 1990 amendments provide that upon both
proper exercise of a repurchase option and a
request that shares in the SERP be sold, the
shareholder "shall cause the shares held in [the
Directed Investment Account] to be distributed to
Stockholder, shall cause the shares to become
subject to the Stockholders Agreement, and shall
cause the shares to be sold."

      When Robert died in 1992, he had accumulated
1,516 shares of KI stock. At the time of his
death, this stock was valued at $258.70 per
share. One of the beneficiaries of his SERP was
his then-wife, Julie Blank. Another portion was
held in trust for his children. In addition,
Diane Wilson, Robert’s former wife, claimed that
she was also entitled to a portion of Robert’s
death benefits as a consequence of their divorce
decree. KI was interested in exercising its
repurchase option, but it did not want to become
mixed up in any family feuds. With those thoughts
in mind, on June 10, 1992, KI employee and Plan
Administrative Committee member Mark Olsen sent
a letter to Julie that read in relevant part:

Krueger International, Inc., does hereby notify
you of its intent to redeem all of the shares
held by Robert L. Blank through his retirement
plan account. . . . We are also aware that Bob’s
first wife may have a claim against his estate
and accordingly we cannot actually disburse any
proceeds or issue any notes payable for the
redemption of the stock until such time as our
legal counsel has assured us that we can
distribute the assets [to the stated
beneficiary]. Once that issue has been resolved,
we will be in contact with you in regard to
having the trustee of the Plan surrender the
stock certificates to us.

      As the dispute over proper beneficiaries was
pending, Julie obtained an ex parte order
prohibiting KI from distributing any SERP
benefits. It took a trip all the way to the
Supreme Court of Wisconsin, but finally in 1996
all the family disputes were resolved with an
amended domestic relations order determining the
percentages of Robert’s pension funds that were
to go to Julie (31.83%), Diane Wilson (20.43%),
and the trust for the benefit of Robert’s
children (47.74%) (collectively, "the
beneficiaries"). At this point, the beneficiaries
jointly presented their claim for benefits to KI.

      Not surprisingly, the world had continued to
turn during the four years while the allocation
problems were being resolved. The most important
development for present purposes was the good
fortune KI had enjoyed: over that period, the
value of common shares of KI stock increased
nearly fourfold. The difference in the value of
the KI shares at the time of Robert’s death and
the value in 1996 provided the trigger for the
current dispute. In July 1996, Mark Olson, a KI
executive and member of the Plan Administrative
Committee, met with the beneficiaries and
informed them that KI intended to redeem Robert’s
KI stock at the 1992 price along with interest
for the period 1992-1996. Given the current
market value, the beneficiaries were none too
happy with this result.

      KI repeatedly offered only to give the
beneficiaries the 1992 price; the beneficiaries
repeatedly insisted that they were entitled to
current prices. They pointed to another provision
of the SERP, sec. 6.09(c), which permits deferral
of the receipt of a death benefit. Under that
provision, "[d]uring any period of deferral, the
portion of the deceased Participant’s Account(s)
payable as a death benefit to such person shall
be entitled to receive allocations of gain or
loss in the same manner as other Accounts."
According to the beneficiaries, other accounts
containing KI stock enjoyed the appreciation from
1992 to 1996, so Robert’s stock should appreciate
as well. Additionally, the beneficiaries relied
on SERP sec. 6.04, which says that the value of
a participant’s account "shall be based on the
most recently available valuation information,"
which they interpret as requiring KI to use the
1996 or 1997 share price information in
calculating the redemption value of Robert’s
stock. KI read the SERP differently, saying that
any asset in the SERP is nevertheless subject to
the terms governing that asset. Arguing that it
exercised its option to buy back the stock in
1992, KI maintained that Robert’s account was
different from all others, effectively in limbo
until the family disputes were resolved.

      Unable to settle its dispute with the
beneficiaries, KI sued, seeking a declaration
that the appropriate redemption price was $258.70
per share, requesting specific performance of
Julie’s obligation to order the plan Trustee to
tender the shares, and asking for a general
declaration of the parties’ rights and
responsibilities under the SA, SERP, and ERISA
generally. Together (at last) with the Estate of
Robert Blank, Diane Wilson, and Bank One Trust
Company, Julie counterclaimed, asserting that KI
had breached its fiduciary duties under ERISA.
The district court found that KI had indeed
exercised its option under the SA to redeem its
shares. However, it also read the SERP as
requiring the company to value the stock as of
the date of distribution (i.e., 1997). Concluding
that the SERP and SA were in conflict, the
district court decided that the SA was a
collateral contract whose application was
preempted by ERISA. It thus granted summary
judgment for the beneficiaries on the core
question and held that the 1997 values of the
stock had to be used. With respect to the
family’s counterclaims, however, the court ruled
for KI. Additionally, some collateral matters
came up during the course of the fight. At one
point, Julie requested plan documents from KI. KI
was 153 days tardy in delivering the documents,
so the judge imposed the maximum statutory
sanction--$100 per day or $15,300 in total.
Finally, the court denied the beneficiaries’
request for attorneys’ fees.

      Each side appeals, saying that every issue that
did not come out its way was wrongly decided.

II
A.

      Before turning to the main issue in this case--
the interaction between the ownership
restrictions and repurchase options contained in
the SA and the accounting rules of the SERP--we
must dispose of a few collateral questions. One
is KI’s argument that the Plan Administrative
Committee’s interpretation of the SERP is
entitled to deferential review under Firestone
Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989).
The SERP says that "the Committee shall have the
power and duty to . . . determine all questions
that shall arise under the Plan." KI believes
that this language requires us to defer to its
interpretation of the SERP (which of course
reconciled its terms with the repurchase option
in the SA). Under some of the cases decided when
the parties filed their briefs, most notably
Patterson v. Caterpillar, Inc., 70 F.3d 503 (7th
Cir. 1995), KI might have been right. We
subsequently clarified in Herzberger v. Standard
Ins. Co., 205 F.3d 327 (7th Cir. 2000), that we
will not assume plan discretion simply by virtue
of a description of the Plan Administrative
Committee’s functions. KI’s SERP comes fairly
close to doing just that--it comes as no surprise
that the committee decides questions. We need not
decide how the SERP’s language would fare under
Herzberger, however, since as we explain below,
we view the SERP and SA as standing separately.

      Secondly, Julie’s claim against KI alleging that
it breached its fiduciary duties under ERISA
rests solely on her argument that KI’s attempt to
use the 1992 stock price is incorrect. She
maintains that by trying to redeem the stock for
only $258.70 per share, KI is trying to cheat her
and the other beneficiaries out of what is
rightfully theirs under the terms of the SERP.
But this means that the real dispute exactly
parallels KI’s claim, which seeks a declaration
that the 1992 share price is the appropriate one.
Julie wants attorneys’ fees as part of the
damages for the breach of fiduciary duty, but her
sole basis for that request is 29 U.S.C. sec.
1132(g), which allows the district court to award
fees "[i]n any action" under ERISA that is
brought by a fiduciary or beneficiary. So the
counterclaim is a perfect mirror of KI’s claim
and adds nothing of substance to the case.

      Related to this point is a consideration that
relates to the jurisdiction of the district court.
Ordinarily, of course, a dispute between a
corporation and some of its stockholders about the
terms of the shareholders’ agreement would not fall
within federal jurisdiction. Corporate law is, for
the most part, state law, and no one is claiming
diversity as a basis for jurisdiction here. But KI
has argued that the shareholder agreement, at least
for purposes of this case, is a contract that
relates to an ERISA plan and thus must be
interpreted and enforced under federal common law.
See Dranchak v. Akzo Nobel, Inc., 88 F.3d 457, 459-
60 (7th Cir. 1996). That point gets KI nowhere,
however, because ERISA preemption is just a
defense, and it is well-established that
anticipating a federal defense does not create
federal jurisdiction. See Blackburn v. Sundstrand
Corp., 115 F.3d 493, 495 (7th Cir. 1997). One might
also argue that because the SA governs the terms of
the stock ownership whether the stock is owned by
an individual, a company, or an ERISA plan, the
SA’s relation to the plan is "too tenuous, remote,
or peripheral" to be considered "relate[d] to" the
SERP. See Shaw v. Delta Air Lines, Inc., 463 U.S.
85, 100 n.21 (1983). The substance of this case
makes it clear, however, that federal jurisdiction
is secure. The SA specifically mentions pension
plans and is thus consciously related to the plan
here. Furthermore, as soon as the counterclaim was
filed raising precisely the same points,
jurisdiction existed to decide the counterclaim and
the original claim would have fallen under the
court’s supplemental jurisdiction. It was a simple
case in which a beneficiary of a plan demanded
benefits in a certain amount, and the employer
contested that claim.

      The third collateral issue concerns the district
court’s decisions to award Julie statutory
penalties for KI’s delay in responding to her
document request but deny her recovery of
attorneys’ fees. Both of these issues are
committed to the district court’s discretion. See
29 U.S.C. sec. 1132(c)(1) (sanctions for delay);
sec. 1132(g)(1) (fees). Neither side contests
that KI was 153 days late in responding to
Julie’s request for SERP documents, but KI says
that the decision to impose the statutory
maximum--$100 per day or $15,300 in total--was an
abuse of discretion. We see no abuse, especially
as KI failed to provide any explanation for the
delay. KI also says that we should remand the
statutory penalty question to the district court
so that it can clarify its reason for changing
the award from $1,530 to $15,300. That is not
necessary, because the reason is clear enough
from the record: the district court made a simple
arithmetic error that it subsequently corrected.
Likewise, we see no abuse in the district court’s
decision to deny fees. As we ask whether the
losing party’s position was "substantially
justified and taken in good faith," Quinn v. Blue
Cross and Blue Shield Ass’n, 161 F.3d 472, 478
(7th Cir. 1998) (citations omitted), and as we
see substantial merit in both sides’ arguments,
there was certainly no abuse of discretion in the
denial of fees.

      Lastly, KI argues that if it is required to
value the stock at 1996 or 1997 levels, we allow
it to distribute it in kind to the beneficiaries
(as opposed to distributing the appropriate
amount of cash). This is a somewhat peculiar
position, as the ownership restrictions in the SA
were seemingly designed to preclude outside
ownership. (It makes us wonder what has happened
to the value of the stock while this round of
litigation has been pending, but that is
obviously not in the record and not material to
our decision.) In any case, KI did not raise this
possibility until its Rule 59(e) motion, so it
has waived any argument that it is entitled to
distribute stock rather than cash. Moro v. Shell
Oil Co., 91 F.3d 872, 876 (7th Cir. 1996). If KI
believed that it was allowed to distribute stock
rather than cash to the beneficiaries if it lost
in the district court, it had ample opportunity
to present this alternative argument prior to the
entry of judgment.

B.

      With the underbrush cleared away, we turn to
the task of reconciling the apparent
contradiction between the SERP and the SA. The
beneficiaries rely principally on 29 U.S.C. sec.
1144(a), which provides that ERISA "shall
supersede any and all State laws insofar as they
may now or hereafter relate to any employee
benefit plan." See also Metropolitan Life Ins.
Co. v. Taylor, 481 U.S. 58, 64-65 (1987);
Dranchak, 88 F.3d at 459-60. They contend that
KI’s action to enforce the repurchase option in
the SA is a state law contract action that is
preempted by ERISA, meaning that the terms of the
SERP must govern if they are in conflict. Also
implicit in their argument is the idea that the
SA cannot be a proper amendment to the SERP
because it was not adopted pursuant to the proper
amending procedures. See 29 U.S.C. sec.
1102(b)(3); Downs v. World Color Press, 214 F.3d
802, 805 (7th Cir. 2000).

      The beneficiaries’ position is straightforward.
They rely on the sections of the SERP that
provide for valuation using the most recent
information (sec. 6.04) and accrual of gains and
losses at the same rate as other accounts when
distribution is deferred after the principal
beneficiary dies (sec. 6.09). They argue that
because the stock remained in Robert’s account,
it must accrue gains and losses at a rate equal
to other accounts containing similar amounts of
KI stock. So, since KI stock generally increased
in value fourfold, so too Robert’s stock must
have increased. KI counters by noting that SERP
sec. 4.10(b) makes clear that "[a]ny portion of
a Participant’s Directed Investment Account
invested in a specific investment shall be
accounted for separately." KI therefore believes
that where a participant-controlled directed
account is concerned, the accounting provisions
on which the beneficiaries rely mean nothing more
than that Robert was entitled to whatever returns
the particular assets in his account would bring.
Moreover, on the assumption (which the district
court accepted) that KI had effectively exercised
its repurchase option in 1992, KI claims that the
value of Robert’s KI stock was fixed at $258.70
(plus interest, which is not contested here) from
the time the option was exercised.

      We agree with the essential point that KI
makes, but not with all of its factual
assumptions. Before the accounting rules of an
ERISA plan can be applied, the basic terms of the
asset to be accounted for must be determined.
That is what the SA does--it defines the bundle
of rights to which a KI shareholder (whether a
direct shareholder or a shareholder through an
ERISA plan) is entitled. Because KI has chosen to
remain a privately held company, it has the
prerogative to limit ownership in its shares to
employees. It has chosen to do so, which makes it
necessary to include a repurchase option in its
shareholder agreement (so that when employees
leave the firm, it gets the shares back).
Accepting this repurchase option is an
inseparable part of owning KI stock, which means
that Robert and his successors in interest to the
stock are bound to its terms. Contrary to the
beneficiaries’ contentions, the fact that they
themselves were not signatories to the SA is
irrelevant. They cannot add to the value of the
KI stock by eliminating the repurchase option
solely by surviving Robert. Similarly, it makes
no difference that some shares held in the plan
may not have been formally subject to the SA.
Robert agreed as part of the 1990 amendments to
order the plan to distribute his shares, then
sell the shares back to KI. The net effect of
these provisions is identical to the repurchase
option in the SA.

      Neither the SERP nor ERISA in any way undercut
this view of the SA. The SERP governs the
relation between the plan and the beneficiary and
dictates the way that plan assets (whether in an
ordinary or in a directed account) are to be
handled. But that does not mean that the SERP
modifies the terms of the assets themselves. A
simple example illustrates the point. Suppose
that rather than investing in his own company’s
stock, Robert had instead invested in a third-
party limited partnership that imposed ownership
restrictions similar to those found in the SA.
Upon Robert’s death, the limited partnership
would have the right to repurchase Robert’s
interest. If it exercised that option but there
was a delay in distribution, nobody would
seriously contend that KI’s SERP overrode the
partnership agreement. That agreement would
govern the nature of the property that the SERP
held. The principle that ERISA preempts state law
applies where ERISA and the state law conflict
regarding the distribution of an already defined
sum. That point is what distinguishes our case
from Boggs v. Boggs, 520 U.S. 833 (1997), on
which the beneficiaries rely heavily. Boggs
concerned a Louisiana law that would have
redirected a stream of annuity payments that
ERISA designates as belonging to the surviving
spouse. The Court held that ERISA’s objective
(ensuring the economic security of the surviving
spouse) preempted the state law alternative
distribution scheme. But the law at issue in
Boggs did not define the asset to be distributed,
as the SA does here. In short, the SA is a
contract between Robert and KI acting in its
capacity as a corporate issuer of stock; the SERP
is a contract between Robert and KI as plan
administrator. And it is those two different KI
capacities that allow us to reconcile the SA and
the SERP. They simply perform two different
functions.

      Next, the beneficiaries contend that a
redemption of the KI stock in Robert’s account
for $258.70 is prohibited by ERISA itself, which
requires that all exchanges between a plan and a
beneficiary be for "adequate consideration." 29
U.S.C. sec. 1108(e)(1). Consideration is adequate
if it equals "the fair market value of the asset
as determined in good faith by the trustee or
named fiduciary pursuant to the terms of the
plan." 29 U.S.C. sec. 1002(18). The beneficiaries
also point to a proposed ERISA regulation that
would require that the adequacy of the
consideration "be determined as of the date of
the transaction," 53 Fed. Reg. 17632, 17634 (May
17, 1988), and SERP sec. 6.04, which requires the
plan to use its most recent valuation
information. According to the beneficiaries,
these terms render KI’s proposed redemption price
a prohibited transaction--it is trying to
exchange stock that is worth roughly $1000 for a
paltry $258.70. KI counters by arguing that
because of the repurchase option in the SA, the
beneficiaries are in fact getting fair market
value for the particular KI stock held in
Robert’s directed account. Essentially, the
parties are talking about apples and oranges
here. Stock unencumbered by a repurchase option--
which became a call at the time of Robert’s
death, pursuant to sec. 4.4 of the SA--is not the
same thing as stock that is so encumbered. If, as
the district court found, KI exercised its option
when the share price was $258.70, then at that
moment Robert’s stock became quite different from
ordinary KI stock. From that time it would have
been stock subject to an exercised call option.
Because the fair market value of stock that
someone else has the right to purchase for
$258.70 is just $258.70 (at least as long as the
stock alone is worth more than that), there would
be no violation of the ERISA "adequate
consideration" rules for KI to pay that amount
per share (plus the interest, of course) to the
beneficiaries. All of this is to say simply that
the beneficiaries are entitled only to what the
plan provides; there can be no breach of
fiduciary duty if that is what the plan gives
them.

      We come, then, to the central question: how do
the SERP and SA relate to one another and ERISA?
If the beneficiaries are right and the SERP
trumps the SA’s repurchase option, then of course
KI cannot buy the stock back at the 1992 price.
On the other hand, if KI is right and under the
governing agreements it had a valid option that
it exercised when the share price was $258.70,
then its offer to give the beneficiaries that
amount plus interest would satisfy ERISA’s
requirement that consideration be based on fair
market value. In other words, the timing of the
transaction is secondary to the validity of the
repurchase option. If there was a valid
repurchase option, and if KI exercised it, then
the value of Robert’s stock was unchanged after
the option was exercised. Consequently, SERP sec.
6.04 makes no difference because 1997 price
information does not affect stock subject to a
call option that was exercised in 1992. The
beneficiaries rely on Eyler v. Commissioner of
Internal Revenue, 88 F.3d 445 (7th Cir. 1996),
but that case concerned an attempt by a taxpayer
to use out-of-date appraisals for stock whose
value floated with the market in order to
minimize liability. Obviously, if KI was supposed
to figure out the value of its stock in 1997,
1992 is a lousy place to start. But the point is
that an exercise of KI’s repurchase option would
have frozen the stock value in 1992. In essence,
although Robert (or his estate) would still have
been the owner of record, KI would have assumed
the risk of loss and opportunity for gain. Robert
and his beneficiaries would have been left with
a guarantee of a fixed amount of cash (a fine
thing in a declining market; much less attractive
in boom times). In our view, the language of the
SA plainly creates the kind of option we are
discussing: to repeat, it says that upon the
death of the employee-shareholder and upon
written notice from KI, KI "shall have the option
to redeem all (but not less than all) of the
stock of KI."

C.

      The only remaining issue is whether KI actually
exercised its option to repurchase Robert’s
shares at the $258.70 price. While the option is
valid for the reasons we have discussed, that
does not mean that it is mandatory. KI could very
well have decided to let the beneficiaries keep
the stock. Only if it exercised the option when
the price was $258.70 is it entitled to judgment.
Although this point was occasionally subsumed in
their discussions of the intricacies of ERISA,
the parties hotly disputed the issue in their
submissions to the district court and again at
oral argument here. The district court indicated
that it found that KI had in fact exercised its
option, but it did not discuss its reasoning. If
this was intended as a formal finding of fact, we
find it unsupported by the record thus far; if it
was a comment in passing, we conclude that the
issue is so central that it must be considered
and the conclusion must be explained.

      As things stand, whether the option was
exercised is anything but clear. The June 10,
1992 letter talks about an intent to exercise the
option, but concludes by saying that the company
will take action at some later time. The contract
is silent with respect to what is required for
the exercise of the option. The beneficiaries
maintain that notice by registered mail is
required, but the SA says only that such notice
is per se sufficient, not that it is mandatory.
(Maybe registered mail is meant to be the
exclusive means of notice, but the SA does not on
its face compel this conclusion.) The
beneficiaries also say that KI did not exercise
the option because if it had, it would have
closed the transaction within 90 days. That, too,
may be helpful evidence, but it is not decisive.
KI counters by saying that it was Julie’s breach
of her contractual obligations (as the
representative of Robert’s estate) to "cause the
shares to be sold" that led to the substantial
delay.

      Under the circumstances, we regretfully conclude
that nothing but a remand will do. Since the SA
is silent regarding what specific steps are
required for KI to exercise its repurchase option
under sec. 4.4, perhaps the parties will try to
use extrinsic evidence to clarify how and when an
option is exercised. See, e.g., Rosetto v. Pabst
Brewing Co., 2000 WL 862847 (7th Cir., June 29,
2000). Also, the parties’ conduct or prior
understanding might yield some insight into
whether KI’s actions sufficed to exercise its
option. KI did send the required notice of intent
to redeem, but then sat on its hands for several
years. It believed that the Wisconsin court’s ex
parte order barred it from completing the sale.
That position is odd, however, as both the court
order and Olson’s letter indicate only that the
proceeds of Robert’s account could not be
distributed. We cannot see any reason why the
stock could not have been redeemed and the cash
placed in escrow while the beneficiaries figured
out their respective shares. Indeed, even the
beneficiaries’ counsel conceded at oral argument
that this would have been quite a different case
if KI had done that. (Indeed, maybe this case
would never have materialized at all, and
everyone would have gone about his or her
business from 1996 forward.) On the facts as they
appear in the record, it is unclear whether KI
actually exercised its option under the SA to
repurchase Robert’s shares after his death. If
the court finds on remand that it did exercise
its option, then KI may finally end this
litigation by tendering the $258.70 per share,
plus interest, to the beneficiaries according to
the formula the Wisconsin courts have
established. If it did not, then its failure to
do so within the 90 days provided by the SA means
that it may now redeem the stock only by paying
the value of the stock as of the time when it
definitively informed the beneficiaries that it
wished to redeem.

III

      For the foregoing reasons, the judgment of the
district court is Reversed and the case Remanded for
further proceedings consistent with this opinion.
Each party shall bear its own costs on appeal.
