The opinion of the court was delivered by: WEINFELD
FINDINGS OF FACT AND CONCLUSIONS OF LAW
These actions center about contracts with respect to a proposed Grand Prix automobile race to be conducted in New York City.
Bernard J. Kamin, the plaintiff in one action, is a lawyer of Toronto, Canada, who, in addition to his legal activities, is employed by Mosport Park, Ltd., a Canadian corporation, in an entreprenurial as well as legal capacity. Mosport Park (Grand Prix), Inc., the plaintiff in the other action, is a Canadian corporation formed as an affiliate or subsidiary of Mosport Park, Ltd., to enter into agreements that are the subject of this action (both are referred to hereafter as Mosport).
The defendants are New York Grand Prix, Inc., a New York State corporation organized to promote "Grand Prix Race" in the greater New York metropolitan area and Daniel Koren, its chief executive officer. Koren had been active in the promotion, development and construction of that project for several years prior to November 12, 1984, when the agreements here at issue were entered into and continued with such activities thereafter. Associated with him in the initial stages of the venture were John Rosart and his affiliates ("Rosart" or "Rosart interests").
A project of this nature requires substantial financing, construction of a racing site, public relations, engineering, architectural and landscaping services, sales promotion and various other activities. In addition, it requires the authorization and approval of an international supervisory group known as the Formula One Constructors Association ("FOCA"), which was granted sometime in 1982. The project, from its inception in 1981, ran into the not unusual delays encountered in negotiations with departments, boards and agencies of New York City, whose consents were required with respect to various aspects of the project as it moved forward, which included but was not limited to environmental impact statements, building, fire and other permits and aaprovals. Although much progress had been made with respect to these matters under the executive leadership of Koren and substantial funds, almost $1 million, had been advanced by John Rosart, also a Canadian citizen, and members of his family, in November 1984 the project was still in the developmental state and in need of additional financing. Prior thereto, Rosart, for whom Kamin had performed some legal services in real estate matters, met with Harvey M. Hudes, also a Canadian Citizen who was president and general manager and a principal of Mosport and associated with Kamin. Hudes and Kamin were experienced in the development and promotion of racing projects in Canada and other countries.
Following a number of conferences among Hudes, Kamin, Koren and Rosart, a series of agreements were entered into an November 12, 1984, which are at the heart of this litigation. As one of the parties to subscription and shareholders agreements,
Mosport agreed to purchase 1,295 shares of New York Grand Prix for $500,000, of which $50,000 was payable upon execution of the agreements, the balance of installments of $50,000 each on December 1, 1984 and January 1, 1985; $200,000 on February 1, 1985 and $150,000 on March 1, 1985, the latter two payments subject to deferral, dependent upon the date a contract was entered into with the City of New York permitting the New York Grand Prix race. The shareholders agreement also provided that he Rosart interests and Koren, who already had invested heavily in New York Grand Prix, each contribute shares to the capital of New York Grand Prix under a recapitalization provision. In addition, Rosart agreed to purchase 1,295 additional shares of New York Grand Prix payable in installments, the first of which $50,000, was paid upon execution of two subscription agreements and like installments payable on December 1, 1984 and January 1, 1985; $200,000 on February 1, 1985 and $150,000 on March 1, 1985, the latter two, however, subject to deferment dependent upon the date of the contract between the New York City Parks Department and New York Grand Prix. The shareholders agreement provided that New York Grand Prix would enter into four-year consulting agreements with Mosport, the Rosart interests and another shareholder, Connor Clark & Company, Ltd. The shareholders agreement also provided that New York Grand Prix would continue to employ Koren as president and Chief Execuitve Officer for four years.
All agreements, however designated - the shareholders agreement, the subscription agreements, the consulting agreements and the employment agreement - were executed simultaneously. The shareholders agreement contained a provision for a Board of Directors of three and that the shareholders vote their shares in favor of Koren, Rosart and one individual designated by Mosport as directors, and to cause the election of Koren as Chief Executive Officer.
The subscription agreements provided that no shares subscribed for there under were to be issued to the subscriber until the full purchase price had been paid; further, that in the default of payment of installments due for subscribed shares, all payments previously made and rights to shares were forfeited; and all monies paid converted into a ten-year subordinated loan bearing interest.
It is undisputed that Mosport paid the first installment upon execution of the contracts, but did not pay the installments due on December 1, 1984 and January 1, 1985, each in the sum of $50,000. However, plaintiffs contend that on April 22, 1985, the shareholders agreed to amend the November 12, 1984 agreement and chose not to threat Mosport's nonpayment of the installments as a default. The alleged agreement was oral. The defendants deny there was a modification of the terms of the original agreement.
At a meeting of the Board of Directors of New York Grand Prix held on August 15, 1985 (not attended by Kamin) Koren and Rosart terminated the Mosport consulting agreement for cause because of Mosport's default in the payment of the amounts due under the Mosport subscription agreement. At a special meeting of shareholders held on the same day, Koren and Rosart voted to remove Kamin as a director abased upon Mosport's failure to pay the balance of the payments due under the subscription agreement, which resulted in "ill will" among the directors and because Kamin's continued presence on the Board was "disruptive" and his "unilateral actions in the past were potentially dangerous to the Corporation [New York Grand Prix]."
The two plaintiffs, Kamin and Mosport, in their respective actions seek the following relief: an accounting by Koren as a director and President of New York Grand Prix; the removal of Koren as chief officer and director of New York Grand Prix; a declaration that New York grand Prix breached the consulting agreement by failure to pay $43,750, the amount claimed by Mosport for services rendered; a declaration that the subscription agreement was amended on April 22, 1985, so that Mosport was not in default there under by reason of the nonpayment of installments as specified in the agreement of NOvember 12, 1984; specific performance of the claimed amended agreement allegedly entered into on April 22, 1985; and a declaration that Kamin continues to be a member of the Board of Directors. the defendants categorically deny the default was waived and the plaintiff's various claims for relief.
Upon commencement of these actions, plaintiffs moved for a preliminary injunction, which the defendants opposed. However, the case was tried upon the merits pursuant to Fed. R. Civ. P. 65(a) (2). The principal witnesses who testified were Kamin and Hudes on behalf of plaintiffs and Rosart on behalf of the defendants. Their testimony as to significant matters was in sharp conflict.
Based upon the Court's trial notes, which included a contemporaneous appraisal of each witness, word-by-word reading of the post-trial stenographic transcript of the trial record, the demeanor of the witnesses, an evaluation of their credibility and the reasonable inferences to be drawn form established facts and surrounding circumstances, this Court concludes that plaintiffs have failed to sustain their burden of proof. Kamin's penchant for writing letters containing self-serving statements and his testimony with glib and ready explanations ...