Almost live from the Bench, below are the legal details of the OCC divorce between Paul Senior and Paul Junior. As you can see the humorous arguments (for some) of the American Chopper show have turned into a full fledged legal battle.
When OCC was founded in 1999, Senior owned 80% and Junior 20% of the company. In January 2008, OCC and Junior signed an employment agreement with a non compete clause. The agreement also gave Senior the option to acquire Junior’s shares in OCC . Junior had to sell to his father, upon Senior’s request, of his shares for fair market value as determined by a procedure to be agreed later by the parties. In December 2008, Senior fired Junior after they got into a argument.
The legal battle between father and son started because the letter of agreement makes no mention of many legal clauses. It doesn’t state 1- how long the option lasts and a valuation date. 2- any adjustments to OCC’s income statement.. 3- whether and how to factor into fair market value the continuation or not of the American Chopper series. 4- the buyout payment terms. 5- who will decide fair market value and a time frame for doing so.
The buyout discussions went to an impasse. At the end of 2009 Paul Teutul Senior filed a lawsuit against his son, asking enforcement of his option to buy his son’s 20% shares, and asking for the appointment of an independent appraiser. Junior challenged the option and countersued his father. In January 2010, Junior asked the court to restrain Senior from engaging in any business transactions without his agreement and asked access to bookkeeping records. Senior responded by asking the court for a summary judgment on his claims. Justice Lubell decided that fair market value is not readily ascertainable in the case of a closed corporation such as OCC whose shares are privately held. I reported on the 12th of March that the Judge blasted the attorneys who drew the original agreement and gave the teutuls 60 days to settle on the choice of 2 appraisers and on the terms of this appraisal.
The court will name a third party appraiser if the appraisers chosen by Senior & Juior fail to agree. Justice Lubell granted Senior summary judgment on his claim for specific enforcement of the agreement. He also decided to appoint a neutral appraiser to be chosen by the parties or by the court if father and son can’t agree.
As I reported on February 11, 2010, TLC announced the cancellation of the American Chopper series. Then, less than 2 months later, on April 4th I hinted that TLC will have both Senior and Junior return to the series for a new seventh season. I also reported on April 16, 2010 that Junior was opening his own motorcycle competing business called Paul Jr. Designs. All industries have a business saga. This one, off camera, is for me more interesting that the show itself.