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STATE OF MINNESOTA IN COURT OF APPEALS A08-1157 D. Randall Blohm, Appellant, vs. Bruce D. Kelly, et al., Respondents. Filed May 12, 2009 Affirmed in part, reversed in part, and remanded Johnson, Judge Hennepin County District Court File No. 27-CV-06-3750 John D. Hagen, Jr., P.O. Box 15609, Minneapolis, MN 55415 (for appellant) Timothy P. McCarthy, Chestnut & Cambronne, P.A., 204 North Star Bank, 4661 Highway 61, White Bear Lake, MN 55110 (for respondents) Considered and decided by Ross, Presiding Judge; Halbrooks, Judge; and Johnson, Judge. SYLLABUS 1. When reviewing the procedural adequacy of an investigation by a special

litigation committee, a court may consider only the appropriateness and sufficiency of the investigative procedures chosen and pursued by the committee but may not inquire into the substance of the committees decisionmaking or the relative weight that the committee gave to the relevant factors when exercising its business judgment. 2. If the investigation and report of a special litigation committee does not

address a claim asserted by a shareholder, the district court may not rely on the

committees investigation and report to enter summary judgment against the shareholder on that claim. OPINION JOHNSON, Judge BNK, Inc., is a closely held corporation that previously owned a small business. Bruce D. Kelly, the sole officer and director, owns 80 percent of the shares; D. Randall Blohm owns 20 percent of the shares. After BNK sold all of its corporate assets for approximately $112,200, Kelly caused BNK to distribute $2,400 of the proceeds to Blohm. Blohm sued Kelly and BNK, alleging that Kelly misappropriated some of the proceeds of the sale. BNK established a special litigation committee (SLC) to investigate Blohms claims against Kelly. The SLC recommended that BNK not pursue those

claims. The district court granted summary judgment to BNK and Kelly on all of Blohms claims. We conclude that Kelly is entitled to summary judgment on Blohms claim concerning events occurring before the sale of corporate assets but not on Blohms claim concerning events occurring after the sale. We also conclude that Kelly and BNK are not entitled to summary judgment on Blohms claim that he was denied access to corporate records. Therefore, we affirm in part, reverse in part, and remand. FACTS From 1991 to 2005, BNK owned and operated an automobile service station located in the city of St. Paul. In November 2004, Blohm learned that Kelly was Blohm requested financial records of the

considering a sale of the service station.

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corporation from Kelly.

Blohm had difficulty obtaining some records and was

completely unsuccessful in obtaining other records. In January 2005, Kelly sold all of BNKs assets to the long-time manager of the service station. Kelly states that the sale price was approximately $112,200. Blohm did not object to the terms of the sale. In May 2005, Kelly sent Blohm a check, paid from BNK, for $2,400, which represented Blohms share of the proceeds of the sale of the corporations assets, after the settling of accounts with creditors. In January 2006, Blohm commenced this action against Kelly and BNK. Blohms allegations can be grouped into three claims. First, Blohm alleges that, before the sale of BNKs assets, Kelly paid himself excessive compensation and commingled BNKs funds with his personal assets and with the assets of another company partially owned by Kelly. Blohm argues that Kelly breached fiduciary duties imposed by the common law, see Pedro v. Pedro, 489 N.W.2d 798, 801 (Minn. App. 1992), review denied (Minn. Oct. 20, 1992), and the Minnesota Business Corporation Act, see Minn. Stat.

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