Jordan v. Duff and Phelps, Inc.

Jordan (plaintiff), an employee-shareholder at Duff (defendant), was contractually required to sell his stock back to Duff at book value whenever his employment ended. While Duff was privately negotiating a merger that would have valued the company at $50 million, Jordan told the company's chairman he planned to resign for family reasons; the chairman said nothing about the pending merger. Jordan stayed through year-end to lock in the December 31 book value, then sold his stock back for $23,225 — but before cashing the check, learned Duff had merged at a valuation that would have made his stock worth over $450,000 had he waited. Jordan refused to cash the check and sued; after the merger later fell through and Duff was instead sold in a leveraged buyout, Jordan amended his complaint to seek rescission. The trial court granted Duff summary judgment, and Jordan appealed.