EVANSVILLE — A ruling in a two-year court battle has, for now, placed control of Spencer County’s Holiday World & Splashin’ Safari theme park in the hands of the widow of former park president Will Koch, who died in June 2010.
A Vanderburgh County circuit judge ruled in December that Lori Koch is the majority owner of the holding company that operates the nation’s oldest theme park.
She has since fired her brother-in-law Dan Koch, who had served as Holiday World president after the death of his brother and this week named Matt Eckert, the park’s former general manager, as its new president and chief executive officer. Lori Koch is now the park’s vice president.
The changes follow a ruling by Vanderburgh County Judge Carl Heldt that Dan Koch and Koch Development Co. had violated the terms of a purchase agreement by improperly undervaluing the shares of KDC that Will Koch owned at the time of his death.
Dan Koch is appealing Heldt’s ruling.
Paula Werne, director of communication for Holiday World, provided the following prepared statement:
“Holiday World & Splashin’ Safari have been owned and operated by the Koch family of Santa Claus, Ind., since the park opened as Santa Claus Land in 1946. Following the death of park CEO and President Will Koch in 2010, questions involving the interpretation of the company’s Shareholders’ Agreement arose. Koch family members turned the issue over to the court system. Regardless of the outcome, the park will continue to be owned and operated by members of the Koch family.”
Werne confirmed that the $6.5 million in improvements and additions to the park announced last year will be completed as planned.
Court records show Lori Koch originally filed a lawsuit against Dan Koch and KDC in January 2011, claiming her husband’s 49,611.6 shares of KDC were worth more than $32 million. However, Dan Koch and Koch Development Co. valued the shares at $26.8 million. The value of the shares was to be determined by a formula based on the park’s value and earnings.
Will, Dan and their sister Natalie Koch each owned equal shares of Koch Development Co. in 2002, when they signed an agreement that stated upon the death of any of the siblings, KDC would purchase that person’s shares. Natalie Koch sold her shares to her brothers shortly before Will Koch’s death.
The agreement stipulated that Lori Koch, acting as the personal representative of her late husband’s estate, was to sell his shares to KDC within 180 days of his death. If the company could not complete the purchase by that point, Dan Koch was to buy the shares himself within 30 days, with a 25 percent down payment and a promissory note for the unpaid balance.
On Dec. 7, 2010, KDC tendered a check to the estate for $5 million and claimed a setoff of more than $2.6 million against a promissory note from Will Koch. Dan Koch then gave the estate a check for $4.7 million and an unsecured promissory note for $14.2 million. Lori Koch and her husband’s estate rejected that amount.
Lori Koch and the estate had argued that the per-share price should be $653.07, based on shareholder meetings in 2008 and 2009, as well as a share transaction between Will and Dan Koch in 2009. Dan Koch and KDC had argued the price should be $541.93 per share.
Judge Heldt agreed with Lori Koch and the estate, saying Dan Koch and KDC improperly used the stock value from Dec. 31, 2009, rather than the purchase date.
In the ruling, Heldt stated “KDC and Daniel Koch made no effort to comply with the Shareholders’ Agreement.” His ruling permanently excuses Lori Koch and the estate from any obligation to transfer the stock back to KDC or Dan Koch.
Dan Koch and KDC immediately appealed the decision. In that appeal, the Koch and KDC claim that alternative dispute resolution should not be used because the parties have “previously mediated this matter without resolution.” Koch’s attorney Kevin Patmore of Santa Claus did not respond to a request for comment Thursday afternoon.
Santa Claus Land was founded in 1946 by Evansville Industrialist Louis J. Koch. It was expanded and renamed in 1984. Will Koch, then 25, took over as park president in 1987. Holiday World is the top employer in Spencer County and has been named the country’s Top Value Park by Consumers Digest. Splashin’ Safari is ranked as the nation’s No. 1 Water Park by TripAdvisor.com.