Karmanos Wins Again: Michigan Supreme Court Unanimously Rejects Appeal of $16.5 Million Award

Karmanos Wins Again: Michigan Supreme Court Unanimously Rejects Appeal of $16.5 Million Award

November 1, 2017

LANSING – The Michigan Supreme Court yesterday unanimously rejected Compuware Corporation’s request for further appeal of an arbitrator’s $16.5 million award to Peter Karmanos. Jr. arising out of Compuware’s wrongful termination of his consulting agreement and stock options in 2013.

Karmanos, the co-founder and longtime Chairman and CEO of Compuware, retired in May 2013 and entered into a six-year consulting agreement with the company. After speaking out against Compuware’s cooperation with activist hedge funds and warning they would break up the company, Karmanos was terminated and his vested stock options were cancelled. Karmanos sued, claiming “he suffered significant damages, including unpaid salary, severance pay, bonuses and stock options.” Karmanos was awarded $16.5 million following a two-week arbitration, the largest arbitration award for a wrongful termination case in Michigan history. The award was later confirmed by Wayne County Circuit Court Judge Daniel P. Ryan and a unanimous panel of the Michigan Court of Appeals.

Karmanos hailed the latest ruling. “The result was worth the wait. I spent my career building Compuware, and I couldn’t stay silent when the Board of Directors decided to sell it off for less than its true value. The real tragedy has been the enormous cost to former employees and stockholders. These kinds of transactions are happening every day, and they deserve a lot more scrutiny.” Compuware ultimately laid off thousands of employees while its executives walked away with millions of dollars in golden parachutes.

Karmanos’ attorney, Kevin F. O’Shea of The Miller Law Firm in Rochester, is also pleased with the case’s end. “It’s enormously gratifying to receive another unanimous ruling in Mr. Karmanos’ favor. Justice has truly been done in this case.”

Karmanos is often credited with jump-starting Detroit’s revival by moving Compuware’s headquarters downtown in 2003. After leaving Compuware, he established MadDog Technology in Birmingham, MI, which develops cloud-based solutions to create new revenue streams for companies of all sizes. In March 2017, MadDog Technology moved three of its startup companies to downtown Pontiac and has plans to hire more than 100 professionals over the next three years. With the move, Karmanos hopes to “unleash in Pontiac the same sort of explosive growth as occurred in downtown Detroit when we arrived there two decades ago.” Karmanos has also recently formed MadDog Ventures, a venture capital firm that will invest in companies that develop and market cloud-based business applications.

For additional information contact Kevin F. O’Shea

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