8th U.S. Circuit Court of Appeals upholds $20.7M arbitration award

St. Louis Daily Record & St. Louis Countian, Oct 13, 2008 by Heather Cole

A U.S. appeals court upheld a $20.7 million arbitration award for a former Enterprise Rent-A-Car executive.

The 8th U.S. Circuit Court of Appeals on Oct. 6 said the $45.90 per-share price set by a three-member arbitration panel for William Holekamp's incentive stock awards couldn't be set aside because the judges might have interpreted the stock award and shareholder agreement differently.

It was up to the arbitration panel to decide which testimony was most persuasive, the appeals court judges said in an opinion written by Roger Wollman and affirmed by Diana Murphy and Lavenski Smith.

"Whether we as judges would have found that testimony equally as persuasive is beside the point," Wollman wrote.

Holekamp retired from Enterprise in 2000. Early that year, Crawford Group, Enterprise's parent company, instituted a stock award program to make Enterprise more attractive to possible shareholders as the company considered going public. The move to take the company public later was dropped.

In 2004, Crawford said it would pay Holekamp $25.32 a share, or $11.4 million, to repurchase his stock. Holekamp filed a demand for arbitration, saying the proposed valuation breached the award agreement. A circuit court concluded and the Missouri Court of Appeals Eastern District affirmed that an arbitration panel should settle the difference over price. Two of the arbitrators settled on the $45.90 price, with the third arbitrator filing a dissent.

A circuit court confirmed the award, and Crawford appealed, saying an arbitrator designated by Holekamp wasn't selected and appointed in accordance with the stock award agreement.

Chicago-based law firm Much Shelist represented Holekamp. San Francisco firm Folger Levin & Kahn represented Crawford.

Holekamp has pledged that all money collected beyond the original offer from Crawford and expenses incurred during the legal battle will be given to charity, according to a press release from Much Shelist.