Last week the founder of Chobani settled its ownership dispute. I have been casually following the dispute, which was between Chobani's founder, Hamdi Ulukaya, and his ex-wife, Dr. Ayse Giray. The story goes that the once-happy couple owned a dairy products company named Euphrates, Inc. He was the dreamer and she kicked in the money (the complaint alleges close to half a million dollars). The company's first product was Feta cheese. As you can imagine – based on the number of times you personally bought Feta cheese in the last month – this product line wasn't quite the right one to make it big. The couple split for other reasons, but Dr. Giray still owned just over half of Euphrates.

Then it got interesting. Allegedly, Euphrates began entering the yogurt business in about 2002. Around 2004, Mr. Ulukaya got an opportunity to expand its yogurt business by purchasing an old Kraft factory. He applied for (and got) a small business loan to buy the factory and Chobani was born – allegedly using the assets from Euphrates to get the loan and start the new company – oh yeah, and he didn't tell Dr. Giray what he was doing.

In most states, the directors/officers of a company have a duty of care and loyalty to the company's shareholders. One of these duties is a prohibition on usurping a corporate opportunity. In short, if a director/officer of a company is presented with an opportunity that could benefit the company, then the director/officer has to present it to the company and the company has to pass before the director/officer can run off with the opportunity. A second and perhaps more obvious duty prohibits a director/officer from converting the assets of a company into personal assets. There are other duties, but you get the idea.

Over the next 5 years, Mr. Ulukaya's sour yogurt took off in the U.S. According to Forbes, it grew at the same pace as Google or Facebook and went from $0 to $1B in revenue between 2007 and 2012, when Dr. Giray filed her complaint.

Two years and countless attorney hours later (you can browse the case filings here if there isn't anything good on Netflix tonight), the ex-couple have settled. I would love to know the settlement, but it isn't public. I'll bet it was expensive though – but I also wonder if it was expensive enough that Mr. Ulukaya wouldn't do it all over the same way?

The takeaways from this mess are:

(1) as a shareholder/member keep up with the company's doings.

(2) as a director/officer remember where your loyalties belong.

(3) don't cross pollinate assets/funds between companies.

(4) if an opportunity is related to your company, it belongs to your company.

(5) if you play dirty, you may end up with a healthy tax deduction for legal fees.

In the end, it's pretty good yogurt, either way though. Here is Chobani's official video about the company's founding:

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