THE CIRCUIT COURT OF THE STATE OF...

{SSBLS Main Documents/8929/001/00664942-1 }

STOLL STOLL BERNE LOKTING & SHLACHTER P.C. 209 S.W. OAK STREET, SUITE 500

PORTLAND, OREGON 97204 TEL. (503) 227-1600 FAX (503) 227-6840

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THE CIRCUIT COURT OF THE STATE OF OREGON

FOR THE COUNTY OF MULTNOMAH

MICHAEL LYNCH, as personal representative of the Estate of Edward C. Lynch,

Plaintiff,

v.

PACIFIC FOODS OF OREGON, INC., an Oregon corporation; CHARLES EGGERT, an individual; JOHNATHAN GEHRS, an individual; KAYE BARNES, an individual; MOSS ADAMS LLP, a Washington limited liability partnership; PFO SHAREHOLDERS CORP., an Oregon corporation; and JOHN DOE DEFENDANTS 1-5,

Defendants.

Case No.

COMPLAINT (Violation of Oregon Securities Laws; Breach of Contract; Breach of Fiduciary Duty; Misrepresentation; Negligent Misrepresentation; Declaratory Judgment; Unjust Enrichment) [NOT SUBJECT TO MANDATORY ARBITRATION]

JURY TRIAL DEMANDED

Filing Fee Authority: ORS 21.160(1)(e) Amount in Controversy: in excess of $250 million

SUMMARY OF THE ACTION

1.

This case involves the Estate of Edward (“Ed”) C. Lynch. During his lifetime, Ed was a

wealthy and active philanthropist. Ed died in 2015 at the age of 94. Ed’s most valuable asset

upon his death was his 43 percent interest in Pacific Foods of Oregon, Inc. (“Pacific Foods,”

“the company,” or “PFO”). Pacific Foods is a closely-held organic food company that Ed

founded with his son-in-law, Charles Eggert (“Eggert”), in the 1980s. At the time of his death,

Ed owned Pacific Foods along with Eggert, a number of Eggert’s family members, and a

handful of Pacific Foods employees.

8/21/2017 4:11:34 PM17CV36090




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2.

Consistent with his lifelong commitment to philanthropy, Ed left substantially all of his

Estate to charity. Ed’s will makes clear his wish that his Pacific Foods interest would be sold to

maximize the economic benefit for charitable purposes.

3.

The Articles of Incorporation for Pacific Foods provided for the redemption of Ed’s

stock by the company following his death. The Articles further provided that Ed’s shares would

be redeemed at fair market value. Following Ed’s death in 2015, Pacific Foods redeemed Ed’s

shares, and represented that the price at which the shares were being redeemed was the true fair

market value for the shares. That representation was incorrect. In fact, Pacific Foods redeemed

Ed’s shares at a value vastly less than true fair market value.

4.

In July of 2017 (twenty-two months after the redemption), Campbell Soup Company

announced that it was acquiring Pacific Foods for $700 million. This amount was higher than

the 2015 redemption valuation by an order of magnitude. There were no changes at Pacific

Foods between 2015 and 2017 that justify or explain the vast difference between the redemption

valuation and the $700 million Campbell purchase price. The explanation is that the 2015

redemption valuation was grossly understated. PFO’s payment of a massively deflated

redemption price to the Estate for Ed’s shares had the effect of transferring the bulk of the value

of Ed’s Estate back to the company, to the very significant detriment of the Estate and to the

great benefit of the remaining shareholders.

5.

Plaintiff brings this suit to recover funds rightfully belonging to the Estate so that such

funds may be distributed to charity according to Ed’s wishes.




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PARTIES

6.

Plaintiff Michael Lynch (“Plaintiff”) is the personal representative for the Estate of

Edward C. Lynch (the “Estate”). Ed was Plaintiff’s father. Plaintiff brings this action in his

capacity as the personal representative of the Estate.

7.

Defendant PFO is a closely-held Oregon corporation.

8.

Defendant Eggert is an Oregon resident. Eggert was at all material times and is the

President of PFO, and a member of PFO’s board of directors. At the time of Ed’s death, Eggert

owned approximately 29 percent of PFO. Immediately following Ed’s death, Eggert became

the owner of 100 percent of PFO’s voting stock. Following PFO’s redemption of Ed’s shares

(the “Redemption”), Eggert became PFO’s majority shareholder.

9.

Defendant Jonathan Gehrs (“Gehrs”) is an Oregon resident. Gehrs was at all material

times and is a member of PFO’s board of directors, an employee of PFO and a shareholder of

PFO.

10.

Defendant Kaye Barnes (“Barnes”) is an Oregon resident. Barnes was at all material

times and is an officer, director, and shareholder of PFO.

11.

John Doe Defendants 1-5 are any and all additional members of the board of directors of

PFO from May 2015 through the present, whose identities are unknown to Plaintiff at this time.




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12.

PFO, Eggert, Gehrs, Barnes, and John Doe Defendants 1-5 are referenced collectively

herein as the “PFO Defendants.” Eggert, Gehrs, Barnes and John Doe Defendants 1-5 are

referenced collectively herein as the “PFO Directors.”

13.

Defendant Moss Adams LLP (“Moss Adams”) is a Washington limited liability

partnership with offices in Multnomah County, Oregon. During the relevant time period, PFO

retained Moss Adams to undertake periodic valuations of PFO. PFO further retained Moss

Adams to undertake the valuation used by PFO for the Redemption.

14.

Defendant PFO Shareholders Corp. is an Oregon corporation. On information and

belief, it was formed in July of 2017 in connection with a potential reorganization of PFO in

anticipation of the Campbell Soup Company acquisition. Plaintiff names PFO Shareholders

Corp. in an abundance of caution and as a party that has or may claim an interest in this action

pursuant to ORS 28.110.

JURISDICTION AND VENUE

15.

This Court has personal jurisdiction over Defendants pursuant to ORCP 4. Venue in

Multnomah County is proper pursuant to ORS 14.080.

GENERAL ALLEGATIONS

16.

PFO was founded by Ed and Eggert in or around 1987. PFO’s primary business is the

manufacture, packaging, distribution and sales of organic beverages and foods.




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17.

Ed died on May 10, 2015 at the age of 94. Immediately prior to his death, Ed owned

approximately 43 percent of PFO, consisting of 18,750 shares of Type A Voting Common

Stock and 4,446 shares of Type B Non-Voting Common Stock.

18.

At the time of his death, the Articles of Incorporation of Pacific Foods of Oregon, Inc.

(as amended by: (1) the Articles of Amendment for Pacific Foods of Oregon, Inc.; (2) Pacific

Foods of Oregon, Inc. Second Articles of Amendment; and (3) Third Amendment to Articles of

Pacific Foods of Oregon, Inc.) (collectively the “Articles”) contained provisions controlling the

redemption of Ed’s PFO shares upon his death.

19.

The Articles provide that upon Ed’s death, “the Type A [Voting] Shares owned by Ed

shall immediately convert to Type B Non-Voting Shares … .”

20.

The Articles further provide:

Upon the death … of Ed … [PFO] shall redeem the Shares owned or held by Ed … in accordance with Section 2.6 of this Article II. Redemption shall occur within ninety (90) days of the Determination Date.

21.

The “Determination Date” is defined as “thirty (30) days following … the death

… of Ed … .”

22.

The Articles at Section 2.6 state that:

For purposes of this Article II, the Purchase Price for the Corporation’s Shares (whether Type A or Type B Shares) shall be based on the True Fair Market Value of the Corporation. The Corporation will obtain an annual appraisal to determine its True Fair Market Value (the “Appraisal”). The Appraisal will be obtained from Moss Adams, LLP, or another independent appraisal firm designated by the Board of Directors.




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23.

The Articles define “True Fair Market Value” as:

the total value of the Corporation determined by independent appraisal under Section 2.6 below, based upon the assumption of 100% control (i.e. on an absolute majority basis). No discounts or premiums shall apply in determining the Corporation’s True Fair Market Value.

24.

Upon Ed’s death, pursuant to the Articles, the PFO Defendants converted all of Ed’s

Type A Voting Common Stock to Type B Non-Voting Common Stock.

25.

Prior to Ed’s death, the only owners of PFO Type A Voting Common Stock were Ed

and Eggert. Thus, immediately following Ed’s death and the conversion of Ed’s voting shares

to non-voting shares, Eggert became the owner of 100 percent of PFO’s outstanding voting

stock.

26.

The PFO Defendants engaged Moss Adams to undertake a valuation of PFO as of the

Determination Date – June 9, 2015 (30 days following Ed’s death).

27.

Moss Adams provided its Valuation Analysis (the “Valuation Analysis”) to PFO under a

cover letter dated September 3, 2015. Plaintiff is unaware whether this was the first or only

time the Valuation Analysis was provided to the PFO Defendants. The Valuation Analysis

states that “Moss Adams LLP was engaged by Pacific Foods of Oregon, Inc. … to determine

the True Fair Market Value (as defined by the Third Amendment to Articles of Pacific Foods of

Oregon, Inc.) of the Company as of June 9, 2015 in connection with Mr. Ed Lynch’s death, on

May 10, 2015.”




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28.

The Valuation Analysis contains Moss Adams’ “Concluded Value” of PFO as a total

dollar amount for all shares (and further breaks the value down to a per share value). The Moss

Adams’ Concluded Value, which was used by the PFO Defendants to set the purchase price for

Ed’s shares in connection with the Redemption, is referenced herein as the “Purported Value.”

29.

In a letter dated September 4, 2015, Eggert wrote to Plaintiff regarding the basis for the

valuation and redemption logistics. Eggert’s letter purported to explain the Purported Value,

and further informed Plaintiff of the amount of the purchase price for the Redeemed Shares (the

“Purchase Price”). Consistent with Ed’s percentage of ownership of PFO, the Purchase Price

was approximately 43 percent of the total Purported Value (adjusted downward by certain

offsets as allowed by the Articles). Eggert’s letter further stated that, “One thing to note is

Moss Adams’ valuation assumes an outside sale of the company.”

30.

On or after September 4, 2015, PFO sent Plaintiff a copy of the Valuation Analysis.

31.

Moss Adams was at all times aware that the Purported Value and the Valuation Analysis

would be shared with Plaintiff and would be used by the PFO Defendants and Plaintiff in

connection with the Redemption.

32.

On information and belief, the PFO Defendants effectuated the Redemption and

purchased all of Ed’s PFO shares (the “Redeemed Shares”) at some point after September 4,

2015. In or around December 2015, Plaintiff began receiving installment payments from PFO

for the Redeemed Shares. A significant portion of the Purchase Price has not been paid.




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33.

Immediately upon Ed’s death, Eggert became the controlling shareholder of PFO, based

on his ownership of 100 percent of PFO’s voting shares, and further based on the number of

shares he owned and his role as President of PFO and a member of its board of directors.

34.

Prior to the redemption of Ed’s shares, Eggert owned approximately 29 percent of the

outstanding shares of PFO (voting and non-voting). Following the Redemption, in addition to

his status as the only voting shareholder, Eggert further became the majority owner of PFO,

holding approximately 50.4 percent of all outstanding shares.

35.

At all relevant times, the PFO Defendants were exploring the potential that a larger

corporation would acquire PFO.

36.

PFO is a local organic food manufacturer and distributor. Consumer demand for organic

and natural foods has grown tremendously in recent times. For years, natural and organic

public food companies have been trading at significantly higher values relative to other public

food manufacturers and distributors. For well over a decade, large food manufacturers and

distributors have been acquiring natural and organic food companies at a record pace. Further,

in those acquisitions, the large food manufacturers and distributors have been paying

significantly higher multiples of revenues relative to other acquisitions generally.

37.

Prior to Ed’s death, the PFO Defendants had identified Campbell Soup Company as a

potential buyer of PFO. Campbell Soup Company, along with its wholly-owned subsidiary,

Campbell Investment Company, is referenced collectively herein as “Campbell.”




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38.

Prior to Ed’s death, executives from Campbell visited PFO’s facilities in Oregon in

connection with a potential acquisition.

39.

On July 6, 2017, Campbell announced that it was acquiring PFO for $700 million (the

“Campbell Value”). The Campbell Value was vastly higher (by an order of magnitude) than the

Purported Value (as of June 9, 2015) provided by Defendants twenty-two months earlier.

40.

There were no material changes at PFO that could potentially explain the vast

discrepancy in the Purported Value as June of 2015 and the $700 million purchase price

announced in July of 2017.

41.

The explanation is that the Purported Value was incorrect, and grossly undervalued

PFO.

42.

The Valuation Analysis states that the Standard of Value used for the valuation was the

True Fair Market Value of the Company as defined in the Articles. The Valuation Analysis

further states:

For purposes of this valuation, we have assumed that True Fair Market Value is analogous to Fair Market Value for the Company. The term “Fair Market Value” is defined by Revenue Ruling 59-60 as the price at which the property would change hands between a willing buyer and a willing seller, when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, both parties having reasonable knowledge of the relevant facts.

43.

The Purported Value was not, in fact, even in the ballpark of the price at which PFO (or

its shareholders) would have been willing to sell PFO in 2015, or what a willing buyer (such as

Campbell) would have been willing to pay for PFO in 2015.




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CLAIMS FOR RELIEF

FIRST CLAIM FOR RELIEF Violations of Oregon Securities Law – ORS 59.127

(Against All Defendants)

44.

Plaintiff incorporates by reference the allegations in the above paragraphs as if fully set

forth herein.

45.

The Redeemed Shares are securities within the meaning of ORS 59.015(19)(a).

46.

PFO purchased the Redeemed Shares by means of an untrue statement of a material fact

or an omission to state a material fact necessary in order to make the statements made, in light

of the circumstances under which they were made, not misleading in violation of ORS

59.127(1)(b).

47.

Eggert successfully solicited the purchase of the Redeemed Shares by means of an

untrue statement of a material fact or an omission to state a material fact necessary in order to

make the statements made, in light of the circumstances under which they were made, not

misleading in violation of ORS 59.127(1)(b).

48.

In purchasing the Redeemed Shares, PFO and Eggert made untrue statements of material

fact including, without limitation that:

(a) the Purported Value was the True Fair Market Value of PFO;

(b) the Purported Value was based on the price at which PFO would change hands

between a willing buyer and a willing seller; and

(c) the Purported Value assumed an outside sale of PFO.




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49.

In purchasing the Redeemed Shares, PFO and Eggert omitted to state material facts,

including, without limitation that:

(a) the Purported Value did not represent the true fair market value of PFO;

(b) the true fair market value of PFO was in fact vastly higher than the Purported

Value;

(c) the Valuation Analysis was incorrect;

(d) large food manufacturers were acquiring natural and organic food companies at a

record pace;

(e) in those acquisitions, the large food manufacturers and distributors had been

paying significantly higher multiples of revenues relative to other acquisitions

generally;

(f) the Valuation Analysis failed to use proper comparable transactions and failed

properly to weight the income and market (public company and acquisition)

approaches;

(g) PFO was a very attractive acquisition target; and

(h) PFO and Eggert would not have sold PFO for the Purported Value, and instead

would have demanded a vastly higher price.

50.

Plaintiff did not know of Defendants’ untruths and omissions.

51.

Eggert is jointly and severally liable with PFO pursuant to ORS 59.127(3). At all

relevant times, Eggert controlled PFO and was an officer and director of PFO. Eggert further

participated and materially aided in the purchase.




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52.

Barnes, Gehrs and John Doe Defendants 1-5 are jointly and severally liable with PFO

and Eggert pursuant to ORS 59.127(3). At all relevant times, Barnes was an officer and director

of PFO. At all relevant times, Gehrs was a director of PFO.

53.

Moss Adams is jointly and severally liable with PFO and Eggert pursuant to ORS

59.127(3). Moss Adams participated and materially aided in the purchase by preparing the

Valuation Analysis, without which the purchase could not have been completed.

54.

Pursuant to ORS 59.127(2), Defendants are liable for damages in the amount that would

be recoverable upon tender of the consideration paid for the securities, plus any amount

received on the securities, less the consideration paid for the securities, plus interest at the rate

set forth in ORS 82.010 beginning 120 days from the date of Ed’s death. Defendants are liable

to Plaintiff on this claim for an amount to be proven at trial in excess of $250 million.

55.

Pursuant to ORS 59.127(9), Defendants should be required to pay Plaintiff’s reasonable

attorney fees.

SECOND CLAIM FOR RELIEF Breach of Contract

(Against PFO)

56.


forth herein.

57.

The Articles are a contractual agreement between PFO and its shareholders.




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58.

The Articles, including the duty of good faith and fair dealing implied in all contracts,

required PFO to redeem the Redeemed Shares at true fair market value.

59.

In breach of the Articles and the duty of good faith and fair dealing, PFO purchased the

Redeemed Shares at an amount vastly less than true fair market value.

60.

Plaintiff has fully performed his obligations under the Articles.

61.

As a direct result of PFO’s breach of the Articles, Plaintiff has been damaged in an

amount to be proven at trial in excess of $250 million. Alternatively, as the result of its breach,

PFO should be ordered to disgorge the full amount of the windfall it received as the result of its

breach of the Articles, in an amount to be proven at trial in excess of $250 million. Plaintiff

seeks an award of prejudgment interest on this claim at the rate set forth in ORS 82.010

beginning 120 days from the date of Ed’s death.

THIRD CLAIM FOR RELIEF Breach of Fiduciary Duty/Aiding and Assisting


62.


forth herein.

63.

Following Ed’s death, the Estate held a minority interest in PFO, a closely-held

corporation.




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64.

Eggert owed fiduciary duties to Plaintiff (in his capacity as the personal representative

of the Estate) by virtue of his position as the controlling shareholder, President and a director of

PFO.

65.

The PFO Directors owed fiduciary duties to Plaintiff (in his capacity as the personal

representative of the Estate) by virtue of their positions as directors and/or officers of PFO.

66.

The PFO Directors owed Plaintiff the fiduciary duties of care, loyalty, good faith, fair

dealing, and full disclosure. As shareholders in PFO, each of the PFO Directors had a very

significant personal financial interest in PFO’s redemption of Ed’s shares.

67.

The PFO Directors breached their fiduciary duties to Plaintiff in connection with the

Redemption at least in the following ways:

(a) effectuating the Redemption in an amount other than at true fair market value;

(b) approving and/or consciously or recklessly disregarding the seriously flawed

Valuation Analysis; and

(c) making and/or consciously or recklessly disregarding the misstatements and

omissions made in connection with the Redemption, as detailed in paragraphs 48

& 49 above, and paragraphs 74 & 75 below.

68.

The PFO Directors have all become significantly enriched as the result of their breaches

of fiduciary duty alleged herein.




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69.

PFO acted in concert with the PFO Directors, and gave substantial assistance to the PFO

Directors in connection with the Redemption. PFO is jointly and severally liable for the PFO

Directors’ breaches of fiduciary duty.

70.

Moss Adams acted in concert with the PFO Directors and gave substantial assistance to

the PFO Directors in connection with the Redemption, including through the Valuation

Analysis. Moss Adams is jointly and severally liable for the PFO Directors’ breaches of

fiduciary duty.

71.

As the direct and foreseeable result of the PFO Directors’ breaches of fiduciary duty,

Plaintiff has been damaged in an amount to be proven at trial in excess of $250 million.

Alternatively, the PFO Directors and PFO should be ordered to disgorge the full amount of the

windfall they have received as the result of the breaches of fiduciary duty alleged herein, in an

amount to be proven at trial in excess of $250 million. Plaintiff seeks an award of prejudgment

interest on this claim at the rate set forth in ORS 82.010 beginning 120 days from the date of

Ed’s death.

FOURTH CLAIM FOR RELIEF Misrepresentation/Aiding and Assisting


72.


forth herein.




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73.

PFO and Eggert made material misrepresentations to Plaintiff in connection with the

Redemption, as stated in paragraph 48 above. PFO and Eggert also omitted to disclose material

facts when they were under a duty to speak, as stated in paragraph 49 above.

74.

Moss Adams made material misrepresentations to Plaintiff in connection with the

Redemption and the Valuation Analysis, including, without limitation, that:

(a) the Purported Value was the true fair market value of PFO; and

(b) the Purported Value was based on the price at which PFO would change hands

between a willing buyer and a willing seller.

75.

In connection with the Redemption and the Valuation Analysis, Moss Adams omitted to

state material facts when it was under a duty to speak, including, without limitation that:

(a) the Purported Value did not represent the true fair market value of PFO;

(b) the true fair market value of PFO was in fact vastly higher than the Purported

Value;

(c) the Valuation Analysis was incorrect;

(d) the Valuation Analysis failed to use proper comparable transactions and failed

properly to weight the income and market (public company and acquisition)

approaches;

(e) natural and organic public food companies were trading at significantly higher

values relative to other public food manufacturers and distributors;

(f) large food manufacturers were acquiring natural and organic food companies at a

record pace;




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(g) in those acquisitions, the large food manufacturers and distributors had been

paying significantly higher multiples of revenues relative to other acquisitions

generally; and

(h) PFO was a very attractive acquisition target.

76.

The PFO Defendants and Moss Adams were aware of their misrepresentations and

omissions. Alternatively, the PFO Defendants and Moss Adams made their misrepresentations

and omissions in reckless disregard of the truth.

77.

Plaintiff did not know of the untruth of Defendants’ representations and was unaware of

Defendants’ omissions. Plaintiff relied on Defendants’ misrepresentations and omissions and

had a right to so rely.

78.

All Defendants acted in concert with and aided and assisted in the actions of the PFO

Defendants and Moss Adams as alleged herein. All Defendants are jointly and severally liable

with the PFO Defendants and Moss Adams.

79.

As the direct and foreseeable result of the misrepresentations and omissions alleged

herein, Plaintiff has been damaged in an amount to be proven at trial in excess of $250 million.

Alternatively, the PFO Directors and PFO should be ordered to disgorge the full amount of the

windfall they have received as the result of the misrepresentations and omissions alleged herein,

in an amount to be proven at trial in excess of $250 million. Plaintiff seeks an award of

prejudgment interest on this claim at the rate set forth in ORS 82.010 beginning 120 days from

the date of Ed’s death.




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FIFTH CLAIM FOR RELIEF Negligent Misrepresentation/Aiding and Assisting

(Against All Defendants) 80.


forth herein.

81.

In the course of their business and professional relationship with Plaintiff, Eggert, PFO

and Moss Adams supplied information for the guidance of Plaintiff in connection with the

Redemption. Eggert, PFO and Moss Adams knew or should have known that the Purported

Value and Valuation Analysis would be supplied to Plaintiff in connection with the

Redemption. Eggert, PFO and Moss Adams supplied material false information and omitted to

state material facts necessary in order to make the statements made, in light of the

circumstances under which they were made, not misleading, as alleged in paragraphs 48, 49, 74

& 75 above.

82.

Eggert, PFO and Moss Adams were negligent in communicating information to

Plaintiff, and failed to exercise reasonable care and competence in obtaining and

communicating information to Plaintiff. Plaintiff reasonably and justifiably relied on the

misrepresentations and omissions alleged herein.

83.

All Defendants acted in concert with and aided and assisted in the actions of Eggert,

PFO, and Moss Adams as alleged herein. All Defendants are jointly and severally liable with

Eggert, PFO and Moss Adams.




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84.

As the direct and foreseeable result of the negligent misrepresentations and omissions

alleged herein, Plaintiff has been damaged in an amount to be proven at trial in excess of $250

million. Alternatively, the PFO Directors and PFO should be ordered to disgorge the full

amount of the windfall they have received as the result of the misrepresentations and omissions

alleged herein, in an amount to be proven at trial in excess of $250 million. Plaintiff seeks an

award of prejudgment interest on this claim at the rate set forth in ORS 82.010 beginning 120

days from the date of Ed’s death.

SIXTH CLAIM FOR RELIEF Oregon Declaratory Judgments Act, ORS 28.010, et seq.

(Against the PFO Defendants and PFO Shareholders Corp.)

85.


forth herein.

86.

Plaintiff seeks a declaration of his rights under the Articles. Plaintiff seeks a

declaration:

(a) declaring that he is entitled to be paid true fair market value for the Redeemed

Shares;

(b) setting the amount of such true fair market value; and

(c) ordering PFO and the PFO Directors to take whatever actions necessary to

effectuate payments to the Estate in compliance with the terms of the Articles and the Court’s

rulings.




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87.

Pursuant to ORS 28.080, Plaintiff further seeks an award of his damages in an amount to

be proven at trial in excess of $250 million, and equitable relief requiring PFO and the PFO

Defendants to disgorge any and all benefits received as the result of their failure to comply with

the Articles. The equitable relief should include interest at the rate set forth in ORS 82.010

beginning 120 days from the date of Ed’s death.

SEVENTH CLAIM FOR RELIEF Unjust Enrichment

(Against the PFO Defendants)

88.


forth herein.

89.

The PFO Defendants improperly and unjustly obtained a benefit from Plaintiff by

redeeming the Redeemed Shares at a price vastly below true fair market value.

90.

Permitting the PFO Defendants to retain the benefits and profits from their actions

would be unjust.

91.

Plaintiff is entitled to restitution and disgorgement in an amount to be proven at trial in

excess of $250 million and interest at the rate set forth in ORS 82.010 beginning 120 days from

the date of Ed’s death.




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PRAYER FOR RELIEF

Plaintiff asks that the Court enter judgment against Defendants and award Plaintiff:

(a) Actual damages in an amount to be proven at trial;

(b) Declaratory and equitable relief requiring that Plaintiff be paid true fair market

value for the Redeemed Shares, setting such true fair market value, and ordering the PFO

Defendants to take whatever actions necessary to effectuate the redemption on proper terms;

(c) An order requiring disgorgement of profits wrongfully gained as the result of

Defendants’ actions alleged herein;

(d) Costs of court;

(e) Attorneys’ fees pursuant to ORS 59.127(9);

(f) Prejudgment interest as requested herein; and

(g) Such other and further relief as the Court deems just and appropriate under the

circumstances.

DEMAND FOR JURY TRIAL

Plaintiff demands a trial by jury of all claims, defenses, and matters that are so triable.

DATED this 21st day of August, 2017.

STOLL STOLL BERNE LOKTING & SHLACHTER P.C. By: s/Jennifer S. Wagner

Gary M. Berne, OSB No. 774077 Timothy S. DeJong, OSB No. 940662 Jennifer S. Wagner, OSB No. 024470

209 SW Oak Street, Suite 500 Portland, OR 97204 Telephone: (503) 227-1600 Facsimile: (503) 227-6840




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Email: [email protected] [email protected] [email protected] Attorneys for Plaintiff

Trial Attorney: Gary M. Berne

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