By Jamie Hicks
 Investigative Journalist, Hicks News

LaSalle County, IL — What began as a quiet shareholder dispute inside one of Illinois’ oldest family-run chemical companies erupted into a high-stakes court battle with accusations of corruption, concealment, and retaliation. The 2009 case of Paul Carus III et al. v. Inga Carus et al. pulled back the curtain on Carus Corporation’s internal operations, revealing a power struggle that continues to cast shadows over its business dealings and civic entanglements in LaSalle County.

At the heart of the case was Paul Carus III—a former director, minority shareholder, and grandson of the company’s founder—who alleged that company leaders orchestrated a scheme to remove him from the board, diminish his stake in the company, and suppress his attempts to expose financial improprieties. His lawsuit claimed breach of fiduciary duty, minority shareholder oppression, civil conspiracy, and violations of an alleged family stock agreement.

Though the case was ultimately dismissed, the underlying revelations paint a damning picture of unchecked control and internal silencing—elements that eerily mirror the corporation’s more recent public controversies.

From Boardroom to Battleground

Paul Carus III, who held a 43% minority interest in Carus Corporation along with his family, filed suit against his aunt Inga Carus, his grandfather Blouke Carus, and other members of the board, claiming they engaged in a deliberate campaign to force him out of the company.

The complaint accused the defendants of using their 53% majority control to “freeze out” Paul from corporate governance. After he submitted a whistleblower letter in 2009 that alleged unlawful loans and improper asset transfers, Paul was swiftly removed from the board.

“This is about buying you out,” Blouke allegedly told Paul, a quote cited directly in court filings.

A Hidden Network of Loans and Self-Dealing

Among Paul’s central claims were financial dealings that bypassed board approval and fiduciary transparency:

§ Carus Corporation had allegedly issued personal loans to Blouke Carus totaling over $830,000—one of which ($500,000) had already been repaid, while others remained partially outstanding.

§ A separate $80,000 loan went to the Kaskaskia Foundation, a for-profit venture also linked to Blouke, under the mistaken belief that it was a nonprofit.

No purpose for the loans was ever documented. No personal guarantees were required. Yet the internal Audit Committee declared the transactions “fair” and recommended them be ratified after

The board’s legal justification? An obscure clause in the corporate charter (Article Eight) allowing ratification of insider transactions if deemed “fair at the time of ratification.”

Dilution by Design

Paul also challenged a 2005 decision to split the company’s common stock 1,000-to-1—without splitting the preferred stock, which he and his supporters held.

The result was a 99.9% reduction in the voting power of preferred shareholders. While corporate counsel initially admitted this was likely a mistake, the board later voted to preserve the split, further cementing control in the hands of Inga and her allies.

“There was no dilution,” argued defense attorneys. “Plaintiffs’ voting power actually increased in raw numbers.” But Paul’s team contended the move was strategic, stripping minority shareholders of influence and obstructing any attempt to shift power.

The Phantom Agreement

Perhaps the most legally contested issue was Paul’s invocation of a 1996 oral shotgun put/call agreement, which he claimed allowed either side to trigger a forced sale of shares at a set price.

In 2008, Paul made his offer. Inga refused, countering with a significantly lower valuation. The defense argued the agreement was unenforceable under Delaware law, which requires all stock transfer contracts to be in writing.

Despite internal memos, notes, and draft agreements cited by Paul’s attorneys, the court found the oral agreement lacked sufficient specificity and violated the Delaware Statute of Frauds.

Bonuses for Compliance?

In the wake of Paul’s removal, the board voted to give each independent director a $10,000 bonus, citing record profits in 2008.

Audit Chair Richard Lorraine, a former Eastman Chemical CFO, testified that the bonus was “standard practice” in light of corporate success. Yet critics, including Paul, saw the payout as a veiled reward for shielding self-dealing and rubber-stamping leadership decisions.

.A Playbook That Echoes Today

Though this internal corporate battle took place over a decade ago, its themes resonate loudly today. From questionable financial practices and hidden chemical operations at the Apollo facility, to ongoing FOIA obstruction and retaliatory actions against whistleblowers—the tactics revealed in this case suggest a deeply embedded culture of control and concealment.

Paul Carus III may have lost his lawsuit, but his fight offers vital insight into how power operates within tightly held institutions. It raises enduring questions about transparency, retaliation, and the limits of shareholder rights when corporate governance is built on family loyalty rather than public accountability.

The dismissal of Carus v. Carus may have closed one legal chapter, but the legacy of that boardroom conflict continues to unfold in courtrooms, council chambers, and community meetings across LaSalle County. The question isn’t whether Paul Carus III was right or wrong. It’s whether the system ever gave him a fair chance to be heard—and whether the people of LaSalle can trust a company that’s been silencing dissent from within for generations