Actors face off in suit over sale of business interests

The technology designed to help clean-up efforts after the BP oil spill sits at the center of a Louisiana lawsuit pitting one movie celebrity against another. Our readers in Baton Rouge may be interested to hear that actor Stephen Baldwin and a former business partner filed suit against fellow actor Kevin Costner and a fourth partner in a shareholder dispute that recently went to trial.

Both actors were partners in a firm that developed a specialized centrifuge for separating oil in the wake of a spill. Baldwin and the other former partner sold their shares in the company to the remaining partners. This occurred at some point after Costner conducted a meeting during which oil company executives demonstrated an interest in placing a sizable order.

Baldwin’s side claims they were intentionally cut out of the meeting and were never told about the likelihood that the oil company would invest in the firm’s product. They claim the remaining partners cheated them out of a fair share of profits, and Baldwin’s side is seeking compensation for more than $21 million in damages. Costner and the other defendant filed counterclaims of their own and assert that Baldwin and the other ex-partner are simply acting out of regret over a bad business decision.

The main issues at trial are likely to turn on what exactly Baldwin and the other ex-partner knew or should have known at the time they decided to sell their interests in the company. If the partners had no knowledge of the oil company’s interest in placing an order, the question may turn to the scope of the duty that the remaining shareholders had to proactively inform Baldwin’s side before buying them out.

It remains to be seen whether this lawsuit presents an example of underhanded business dealings or just a case of sour grapes. In complex business litigation such as this, both sides will certainly benefit from skillful legal teams to effectively understand and plead the issues.

Source: Associated Press, “Kevin Costner downplays Baldwin’s role in BP deal,” Michael Kunzelman, June 8, 2012