I commented a little earlier. IANAL. I just find this all interesting for some reason.
But it seems that what happened is that Mikkelson and his wife owned the underlying company ("Bardav", it's called), 50/50. They got divorced. She wanted to sell her half to Proper Media. But because of how they were incorporated, only individuals could own shares in Bardav. So these 5 guys from Proper Media decided to just each own a portion of that 50% themselves, then Bardav would contract services out to Proper Media to manage the site.
So Proper Media, as far as I can tell, doesn't -- and in fact CAN'T -- own anything. They're just a vendor. But then Mikkelson decided he didn't want Proper Media (as a vendor) managing things anymore. They even gave the proper 60 days notice according to the lawsuit. But the Proper Media guys are pissed because they're no longer getting paid that way. Sounds to me like they thought that found this slick little loophole to get around the fact that only individuals could own the shares, but they didn't really think it through.
But again, IANAL, and I have no expertise in any of this.