IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
F I L E D
No. 06-10894 September 20, 2007
Charles R. Fulbruge III
Clerk
THE PARKER GROUP INC
Plaintiff-Appellant
v.
MICHAEL P BRYAN
Defendant-Appellee
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 5:05-CV-230
Before DAVIS, BARKSDALE, and PRADO, Circuit Judges.
PER CURIAM:*
This appeal arises from a dispute between Plaintiff-Appellant The Parker
Group, Inc. (“Parker Group”) and Defendant-Appellee Michael P. Bryan
(“Bryan”) over the terms of a contract (the “Agreement”) that set forth the
conditions of Parker Group’s purchase of all the outstanding shares of American
Administrative Group, Inc. (“AAG”). At the time of the purchase, Bryan, who
held a majority of AAG’s shares, had negotiated for AAG to purchase Gallagher
Benefit Administrators, Inc. (“GBA”). As part of the Agreement, Parker Group
*
Pursuant to 5TH CIRCUIT RULE 47.5, the court has determined that this opinion should
not be published and is not precedent except under the limited circumstances set forth in 5TH
CIRCUIT RULE 47.5.4.
No. 06-10894
agreed to pay Bryan additional consideration should Parker Group successfully
complete the purchase of GBA under the terms negotiated by Bryan. Parker
Group ultimately purchased GBA and, therefore, owed the additional amount
to Bryan.
Pursuant to the Agreement, Bryan was to receive Seller Note B, a
promissory note, for the amount owed to him by Parker Group. The amount of
Seller Note B was to be determined, in part, by using GBA’s Normalized
EBITDA1, which was to be calculated from GBA’s audited financial statements.
At the time the parties negotiated the Agreement, GBA’s audited financial
statements were not available, so the Agreement called for Seller Note B to be
issued based on the parties’ estimated numbers and automatically adjusted once
the audited financial statements became available. Seller Note B was issued
approximately two months after the parties signed the Agreement, and Parker
Group calculated GBA’s Normalized EBITDA at an amount that resulted in
Seller Note B being issued for over $7 million. Parker Group now seeks to
reduce the amount of Seller Note B by approximately $6 million based on GBA’s
audited financial statements. However, at the time Seller Note B was issued,
Parker Group was in possession of GBA’s audited financial statements and gave
indications that it based the $7 million amount on those statements.
Parker Group filed a declaratory judgment action against Bryan, seeking
a declaration that the amount of Seller Note B should be reduced. The parties
filed cross-motions for partial summary judgment, and the district court ruled
in favor of Bryan and issued a judgment pursuant to Rule 54(b) of the Federal
Rules of Civil Procedure. Parker Group appealed to this court.
We have now reviewed the record and examined the parties’ arguments,
and we agree with Bryan’s position. Although the Agreement contemplated an
1
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization.
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No. 06-10894
adjustment to Seller Note B once GBA’s Normalized EBITDA could be calculated
from GBA’s audited financial statements, there is nothing in the Agreement that
prohibits the parties from making a final determination as to GBA’s Normalized
EBITDA prior to the issuance of Seller Note B if the financial statements are
available at that time. The record indicates that the financial statements were
available and that Parker Group relied on those statements in agreeing to the
$7 million Seller Note B. Consequently, we AFFIRM the judgment of the district
court.
AFFIRMED.
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