Appeal Is Granted
Published 5:14 pm Tuesday, April 30, 2013
BUCKINGHAM – The county's largest private employer, Kyanite Mining, was on the receiving end of some hopeful news last week when the Virginia Supreme Court agreed to rehear a request for appeal from The Disthene Group, Incorporated, which includes Kyanite Mining, Blue Rock Resources LLC, and the Cavalier Hotel.
According to the Supreme Court of Virginia website, on April 25, the petition for rehearing resulted in a decision that reads, “Rehearing Granted and Petition Granted/Docketed.”
The request for appeal stems from a ruling handed down in September by Fairfax County Circuit Court Judge Jane Marum Roush, judge designate for Colgate, et al. v. The Disthene Group, Incorporated.
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Following a civil case heard in late spring 2012 in the Circuit Court of Buckingham County, Judge Roush ordered the dissolution of The Disthene Group, Inc. pursuant Virginia Code Section 13.1-749.
On the heels of her ruling, the appeal was filed. However, in February, a Writ Panel of the Supreme Court of Virginia refused the request for appeal. Subsequently, attorneys for Disthene requested the rehearing and on Thursday, the petition was granted.
During the initial trial, Curtis Dixon, Sharon Marie Newcomb, and Marion J. Colgate, Sr. sought the dissolution of Disthene and the distribution of its assets on a pro-rata basis to all the shareholders.
According to court documents filed with Buckingham Circuit Court, Curtis Dixon Colgate and Sharon Marie Newcomb are the children of the late Jeanne Dixon Colgate, the sister of Gene Dixon, Jr., and the daughter of the late Gene Dixon, Sr. and Mallie M. Dixon. Marion J. “Boyd” Colgate, Sr. is the widower of Jeanne.
Much of the three-week trial pivoted on minority shareholder oppression and the business judgment rule.
On Monday, Guy Dixon, President of Kyanite Mining Corporation, responded to the news, “Kyanite Mining Corporation is pleased that the Supreme Court of Virginia has decided to hear its appeal, and we strongly believe that it should overturn the lower court's dissolution decision.”
He shared, “We believe this for many reasons, but primarily because ours is a company that has been extraordinarily generous to its shareholders over the broad sweep of its long history, sharing with them the fruits of its success to far greater an extent than most companies do.”
Explaining, Dixon stated, “Since the late 1990's, The Disthene Group, the parent company of Kyanite Mining, has paid out over 70 percent of all of its profits to its shareholders as dividends. This compares to an average payout of only about 30 percent for all publically-traded companies in the country.”
He offered, “It is true that for a brief period in the middle part of the last decade we decided to reduce dividends in favor of increased reinvestment in the Company.” Dixon noted, “These investments helped us weather the Great Recession and have since lead to record profits, increased hiring and a tripling of the dividend.” He added, “It is difficult for us to understand why the trial court did not find merit in this business judgment.”
Dixon, who is the fourth generation of his family to be involved in Kyanite Mining, continued, “But in addition to the injustice of destroying a company such as ours for 'shareholder oppression,' we fear that auctioning off a business like this to the highest bidder could easily harm the company, its customers, its employees and possibly the wider community.”
Stressing that KMC has nearly a century's worth of roots in Southside and almost as long a record of operational and financial success, Dixon stated, “It provides many good, dependable jobs to the hard-working people of this area, and it sticks by those people and this community through good times and bad.”
Continuing, Dixon offered, “Most importantly, however, it is undisputed that the company has been a good corporate citizen and a responsible environmental steward during its long life under its current owners and managers. We believe that the forced dissolution of the company and the sale of the mine to outsiders who will undoubtedly see the company primarily as a means to a quick profit could very easily jeopardize that record.”
Retrospectively, Dixon shared, “None of this means that the Dixon family is perfect nor does it mean that every decision that I or my forefathers have made over the last 75 years been has been the right decision.” He added, “But we have made many, many more right decisions than wrong ones. And not one of these decisions-right or wrong-has ever been intended to harm the company or any of its shareholders.
“On the contrary, like many of the good men and women who work with us every day, my father and I have devoted our lives to this business, its employees, its customers, and this community. And, every decision that we have made has always aimed at strengthening the long term position and interests of all of those constituents.”
Concluding, Dixon shared, “But while the company moves forward with its appeal, I remain committed to settling this dispute out of court if at all possible. It is certainly my desire for such a settlement, as a business solution to this problem would be far better for all involved than continued wasteful and distracting litigation.”