Founder of Space Center Inc (Meritex)

HARRY MCKNEELY
 MERITEX ENTERPRISES
 Founded in 1916, Minneapolis St.Paul, by Harry McKneely.

 Manage over 8.8 million square feet of commercial real

estate throughout the United States, providing warehouse,
distribution, and office space to over 220 businesses.  

 Operates business in Atlanta, Columbus, Denver, Houston,

Kansas City, Indianapolis, Minneapolis St.Paul, and
Nashville.
 CONFLICT IN FAMILY BUSINESS

 A founder, Harry McKneely has four children:

 Donald G McKneely, the eldest brother, president
 Jean McKneely, a plaintiff
 Audrey McKneely, a plaintiff
 Harry McKneely Jr, the youngest brother, junior executive.
CONT’D
 Minority agains Majority of Shareholders.
 Minority:
 Two sisters, Jean and Audrey

 Majority:
 Brother, Donald and Harry
 Mother- Secretary
CONT’D
 Sisters sued Donald and Harry, the statement was
“Brothers had frozen them out of the company’s
management and any significant share of the profits, and
that the brothers were running the company for their
own benefit”.
  Claimed that the brothers had ‘avoided paying
significant dividends, failed to disclose required
information, and misused corporate assets for their own
gain. None of the minority shareholders has served on
the company’s board
CONT’D
 There was family personal issues between
Donald, and sisters.

 At the courtroom, Donald swore that he never

had sister, which caused the case go even worse.
 TRANSITION
 In December 1989, Space Center held its last board meeting as a family
company and approved a separation into two distinct business entities. Donald
used the non-family management to divide the company’s assets into two
companies which were equal as possible. Harry Jr became CEO, in his late 60’s

 Harry Jr, learned that recreating family style business after two break-ups, he
required full commitment from his children.

 He formed a board of directors with a majority of independent directors, he

hired outside advisors to help coach his family. He even managed the succession
process that resulted in his son returning to the family business after many years
as a bank executive and eventually being named CEO by the independent board
of directors.
 CURRENT MANAGEMENT TEAM OF MERITEX ENTERPRISES.

 Paddy McNeely - Chairman & CEO since 2001

 Tom Hotovec - Chief Financial Officer since 2004

 Dan Williams - Chief Investment Officer since 2005

 Arvid Povilaitis - Chief Operating Officer since 2005

 REFERENCE
 http://meritex.com/html/management.html

 http://meritex.com/

 http
://knowledge.insead.edu/contents/Familyconflictt
rialbyjury090504.cfm