A Hamilton County judge has ruled that two Mike's Carwash directors essentially did nothing wrong when they fired their cousin and forced him to sell his shares in the company in 2010 for an "unfairly low" total of about $17 million.
Although Superior County Court Judge William Hughes did order Bill Dahm to pay Allen County resident Jerry Dahm $141,000 in punitive damages for backdating corporate documents, he rejected in its entirety Jerry Dahm's claim that Bill and Mike Dahm had forced him to accept a below-market buyout after he tried to use his stake in the company - founded in Fort Wayne in 1948 - as collateral for a bank loan needed to cover "tax issues and 'out-of-control' " spending, according to court documents.
Hughes wrote that finding in favor of Jerry Dahm would constitute "an unwarranted intrusion into Indiana's strongly pro-management rule simply to preserve an artificial future rate of return," adding that Bill and Mike Dahm "made decisions based upon their business judgment and in good-faith reliance upon knowledgeable experts."
In the lawsuit filed in 2010 and tried in March, Jerry Dahm claimed his cousins secretly worked to reduce the company's payments to shareholders, thereby increasing the financial pressures he felt. An appraisal by the accounting firm Baden, Gage and Schroeder listed the value of Mike's Carwash at $49 million in 2008 and $45 million the following year.
Jerry Dahm remains part owner of Dahm Property, which owns the land on which the car washes operate. He claimed that the property arm of the business had been reducing the rent it charged to the car wash arm, thereby boosting the value of the business he no longer owned while harming the company in which he maintained a stake.
Jerry Dahm had been seeking an additional $3.3 million for his share in the car washes and another $26.2 million for his share in Dahm Property.
Mike's, now headquartered in Indianapolis, operates 37 car washes in Indiana and Ohio, including six in Fort Wayne. Brothers Bill, a Marion County resident and Ohio resident Mike are sons of Joe Dahm, founder of the company. Jerry is the son of Ed Dahm, a former minority shareholder in Mike's Carwash.
Under Indiana law, Jerry Dahm will collect just 25 percent of his judgement. The rest will go to a state fund to compensate the victims of violent crime.