Published on Dec 30, 2008

$550,000 settlement in Breach of Contract case

Distribution group, founder dispute contract

Former CEO’s advisory agreement terminated after failed meeting $550,000

Plaintiff David Handleman was one of the founding members of the defendant Handleman Company (Company), formerly one of the largest U.S. distributors of prerecorded videotapes, music, computer software and books. Handleman served as its CEO and president for a select period, and upon his 1989 retirement had entered into an advisory agreement with the Company.

Under the agreement, the Company would pay Handleman $300,000 a year for the rest of his life, plus a $300,000 death benefit. In return, Handleman agreed to non-solicitation and non-compete provisions, in addition to providing consulting services upon request, subject to his availability and at his sole determination. From 1989 to 2008, the Company never sought any of Handleman’s consulting services.

In January 2008, the Company requested that Handleman appear at the Company office for a 2 1/2-hour, videotaped meeting. Handleman, who was 93 and had a broken leg, declined to appear but invited management to his home instead. The Company refused and ceased payments under the contract, and purported to terminate the advisory agreement. Handleman filed a lawsuit and a subsequent summary disposition motion for breach of contract. After the motion was briefed and argued but before a decision was rendered, the parties agreed to a buyout of Handleman’s contract for $550,000.

Type of action: Breach of contract

Name of case: Handleman v. Handleman Company

Court/Case no./Date: Oakland County Circuit Court; 08-090111-CZ; Aug. 18, 2008

Tried before: Jury

Name of judge: Michael Warren

Settlement amount: $550,000

Attorney for plaintiff: E. Powell Miller, Jayson E. Blake

Attorney for defendant: Withheld


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