Narayanan v. Sutherland Global Holdings, Inc.

Summary

The Second Circuit vacated summary judgment on a breach of contract claim for a stock buyback agreement, holding that genuine disputes existed over contract formation, ratification, and the ambiguous scope of a board-approval provision in the company’s equity incentive plan. The court also vacated summary judgment on a breach of fiduciary duty counterclaim, finding triable issues as to whether a director’s advances to a land aggregator and undisclosed personal loans to the aggregator’s company constituted self-dealing. The case was remanded for trial on both claims.

Holdings

1. The district court erred because there exist numerous disputed factual issues relating to the formation and validity of the 100% Buyback Agreement, including whether Sutherland agreed to the 100% buyback, whether it ratified the contract, and the interpretation of Provision 18 of the Equity Incentive Plan.
2. The district court erred because the record reveals several triable issues of fact, including whether Narayanan's advances to Ramanan were made in self-interest due to his personal business dealings with Ramanan's company.

Questions Presented

1. Whether the district court erred in granting summary judgment dismissing Narayanan's breach of contract claim regarding the 100% Buyback Agreement.
2. Whether the district court erred in granting summary judgment dismissing Sutherland's breach of fiduciary duty counterclaim.

Disposition

vacated