Inside Track: Estate of Ken Macke wins long legal battle

The estate of the late Ken Macke, former CEO of Dayton Hudson Corp. (now Target Corp.) has survived lawsuits that sought to collect millions in loan guarantees that Macke and other directors made in 2002 while on the board of Burnsville-based PureChoice.

The Minnesota Supreme Court recently declined to review lower court decisions against PureChoice, a maker of sensors that monitor air quality and energy use.

Macke, who died in 2008 at age 69, joined the board of PureChoice in 1997, after his retirement from Dayton Hudson in 1994.

In 2002, Macke and two other directors signed personal guarantees and invested through debt and equity, as part a capital-raising effort. By 2003, Macke, who had suffered from Parkinson's disease and mental deterioration, sought to revoke his guarantee; resigned as a director and, through his lawyer and a series of letters, said he had "no recollection of signing the guarantee."

As M&I bank moved to collect on an outstanding $2 million loan in 2006, a judge exempted Macke from any liability because his competency was at issue. Macke, who was then represented by his wife, Kathleen, subsequently signed a settlement agreement among M&I and PureChoice and other directors that required Macke to pay $1 million and concede his PureChoice stock options.

After the settlement, PureChoice sued Ken Macke's son Jeff, a money manager and market commentator, alleging that he had interfered with the company subordinated debt offering and for pulling his father's support. Jeff Macke, concerned about his father's legal exposure, had said back in 2003 that he was going to legally "pound and kill" PureChoice, according to court statements. A federal judge dismissed the suit against Jeff Macke after his father's death in 2008.

PureChoice subsequently filed suit claiming that it was a creditor of Macke's estate, based on his 2002 guarantee. Hennepin County District Judge Gary Larson granted the Macke estate's request to dismiss the suit .in 2009.

"We convinced Judge Larson that this [suit] needed to be dismissed based on the settlement agreement," said George Eck of Dorsey & Whitney, the Macke estate lawyer. "Macke paid $1 million and gave up options. His family thought this was done. Then they get sued by PureChoice for $32 million. We won hook, line and sinker, and it now has been affirmed by the Minnesota Court of Appeals [in January]. And the Supreme Court refused to review that decision."

PureChoice did not respond to inquiries about the matter.

John Houston, who headed the corporate practice at Robins Kaplan Miller & Ciresi, and three other lawyers have joined Fredrikson & Byron. Robins Kaplan is mostly a litigation shop; Fredrikson focuses on business law.

Houston said "substantially" all of the team's commercial clients are moving to Fredrikson. The parting was said to be amicable.

Fredrikson, which employs 240 lawyers, declined to name any of the clients coming aboard with the new crew.

Houston said Fredrikson's more expansive commercial-law platform "is essential to serving our clients' growing corporate legal and business needs."

Houston will be joined at Fredrikson by Eric Madson, Kevin Spreng and Ryan Miest.

Riverbridge Partners, the private money manager, is joining with the Minneapolis Foundation and Opportunity International on May 10 for a 5 p.m. reception and program that focuses on women and the empowerment and joy of charitable giving.

The keynote speaker will be Betty Jane Hess, a former executive of Arrow Electronics, who is chair of the board of Opportunity International, a Christian-based nonprofit that provides training to thousands of people working their way out of poverty through small enterprises in 20 developing countries.

The panelists will include Krista Carroll, the owner of a printing company Print 4 change, which donates 50 percent of profits to assist the poor; Penny George, president of the George Family Foundation and a leader in the field of integrative medicine; Barbara Lupient, former CEO of Lupient Automotive Group and a board volunteer; and Polly McCrea, a retired small-businesswoman engaged in nonprofit and philanthropic work.

More information on the Interlachen Club event: www.opportunity.org/joyingiving or Cassidy Burns at Riverbridge, 612-904-6221.

•Paula Norbom has become the sole owner of Vallon LifeSciences and renamed it Talencio. Norbom bought out her partner, Doug Ruth, who resigned to focus fulltime as CEO of EarthClean, an early-stage company. Norbom, who began her career as a CPA at Ernst, said Talencio aims to be the "preferred provider of contract professionals for the medical technology, biotechnology, pharmaceutical and health care industries." Norbom, who has worked as a "contract CFO" at several medical-related start-up companies, worked for Restore Medical, Spine-Tech, IntraTherapeutis and ThreeWire. She helped raise capital as well as sales to larger organizations.

•It's barbecue season and Famous Dave Anderson, the founder of the barbecue operation that bears his name, is still at the grill. Anderson will be one of six "BBQ masters" featured in Food Network's "Best in Smoke" competition that begins a four-part episode the evening of Sunday, May 8. "Dave's passion for BBQ is unmatched," Aric Nissen, a Famous Dave's executive, said in a classic understatement.