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Full-Text Articles in Law
Trends In Modern Corporation Legislation, Kenneth K. Luce
Trends In Modern Corporation Legislation, Kenneth K. Luce
Michigan Law Review
Any discussion of trends and developments in modem corporation legislation must assume some understanding of the historical antecedents of that legislation and the judicial approach to its interpretation. As a practical matter the outline of modern legislation has emerged within the memory of living men, but "in order to know what it is, we must know what it has been, and what it tends to become." The state is less concerned today than long ago about the corporation becoming a state within the state and usurping political power, although such concern could and does evidence itself from time to time. …
Corporations-The Fair And Equitable Test In Recapitalizations, Robert O. Hancox
Corporations-The Fair And Equitable Test In Recapitalizations, Robert O. Hancox
Michigan Law Review
Changes in capital structures of corporations which modify rights of security holders generally occur under one of two circumstances: (1) reorganization of insolvent corporations which affects the rights of creditors as well as shareholders and necessitates judicial supervision; and (2) recapitalization of solvent corporations involving only the relative rights of the different classes of shareholders. It is the author's present purpose to focus attention on the effect of the latter type of modification on the most zealously guarded right of the preferred shareholder--the right to accrued dividends on cumulative preferred stock.
Corporations-Change In The Basis Of Sharing Profits As An Impairment Of The Obligation Of Contracts, Robert E. Walsh S.Ed.
Corporations-Change In The Basis Of Sharing Profits As An Impairment Of The Obligation Of Contracts, Robert E. Walsh S.Ed.
Michigan Law Review
Plaintiff, a stockholder in defendant corporation, sought to enjoin distribution of dividends on a patronage basis. Defendant corporation was organized under the laws of Nebraska for the purpose of buying and selling grain, hay, and other agricultural products with a general reservation in the charter of the right to change, alter, and amend. The articles of incorporation were amended so as to convert the corporation into a co-operative organization distributing profits on the basis of the amount of business done with the corporation. Held, a general reservation of power to amend the articles did not confer on the corporation …
Bankruptcy - Corporate Reorganization - Section 77b - Chapter X Of The Chandler Act - Boyd Case Rule, Edmund O'Hare
Bankruptcy - Corporate Reorganization - Section 77b - Chapter X Of The Chandler Act - Boyd Case Rule, Edmund O'Hare
Michigan Law Review
A subsidiary of the defendant corporation filed a reorganization petition under Section 77 B of the Bankruptcy Act and defendant presented a claim of over nine million dollars as a creditor, the claim being grounded upon moneys paid by defendant to the subsidiary for its benefit, management and supervision fees, rental and interest charges, and declared but unpaid dividends. Defendant owned about ninety-eight per cent of the common stock of the subsidiary. As the result of objections by the trustee and preferred stockholders of the subsidiary, defendant's claim was compromised at five million dollars. The reorganization plan provided in part …
Corporations-Validity Of Option To Convert Preferred Stock Into Mortgage Bonds
Corporations-Validity Of Option To Convert Preferred Stock Into Mortgage Bonds
Michigan Law Review
A corporation issued preferred stock, with a fixed dividend rate, power to elect a director voting as a class, and an option in the holder to convert, at his election, into mortgage bonds which were issued at the same time. After a substantial indebtedness had been incurred by the corporation, the stockholders exercised their option to convert into bonds. The corporation then went into bankruptcy, and in reorganization proceedings, the bondholders claim a preference over general creditors. Held, that the former holders of the preferred stock were stockholders and not creditors of the corporation and that, in the absence …
Corporations-Allowance For Depreciation Of Real Estate In Determining Surplus
Corporations-Allowance For Depreciation Of Real Estate In Determining Surplus
Michigan Law Review
In a proceeding to review the election of directors it became necessary to determine whether or not a certain declaration of dividends was lawful. The Delaware statute provides that dividends may be declared either "out of its [the corporation's] net assets in excess of its capital" or "in case there shall be no such excess, out of its net profits for the fiscal year then current and/or preceding fiscal year." It was admitted that there had been no profits during the current or preceding fiscal year, and it was found that in calculating the surplus no allowance had been made …
Corporations -Apportionment Of Part Payment Of Purchase Price Of Stocks Bought In A Unit
Corporations -Apportionment Of Part Payment Of Purchase Price Of Stocks Bought In A Unit
Michigan Law Review
The defendant corporation entered into contracts for the sale of stock in blocks of three shares, two shares of first preferred at fifty dollars each par value and one share of second preferred at fifty dollars par value, the three shares to be sold in a unit for one hundred and thirty-five dollars. The contract contained an agreement that after six monthly payments had been made on the stock, upon default of the remaining payments the corporation would issue certificates of indebtedness for the amount paid in. In the dissolution of the corporation and the distribution of the assets, the …
Corporations - Injunctive Relief Against Corporate Action Which Requires Unanimous Approval
Corporations - Injunctive Relief Against Corporate Action Which Requires Unanimous Approval
Michigan Law Review
A bill for an injunction to prevent the submission, at a stockholders' meeting, of a corporate by-law providing for extra dividends on stock owned by officers and employees, was maintained, on the ground that the proposed move was illegal and unauthorized by statute. Scott v. P. Lorillard Co. (N. J. Eq. 1931) 154 Atl. 515.
Corporations--Cumulative Preferred Stock-Effect Of By-Laws
Corporations--Cumulative Preferred Stock-Effect Of By-Laws
Michigan Law Review
An action was brought by preferred stockholders, during voluntary liquidation of a corporation, for payment of dividends, alleged to be cumulative, which had been passed on account of deficits during the two preceding years. The statutory provision giving the power to issue stock required the articles of incorporation to indicate, when any of the stock was preferred, whether or not the dividends should be cumulative. The articles stipulated that the preferred stock should be entitled to a six per cent dividend out of the net yearly income before any dividend should be paid on the common stock. A by-law, adopted …
Corporations-Dissolution-Distribution Of Assets Between Preferred And Common Stockholders
Corporations-Dissolution-Distribution Of Assets Between Preferred And Common Stockholders
Michigan Law Review
The Commonwealth Hotel Construction Co. became insolvent, and, after the creditors had been paid in full, the preferred and common stockholders disagreed to the distribution of the remaining assets. The articles of incorporation provided that the holders of preferred stock should be entitled to dividends at the rate of seven per centum per annum which should be cumulative "so that, if dividends for any past dividend period at the rate of seven per centum per annum shall not have been paid thereon or set apart therefor, the deficiency shall be fully paid or set apart, but without interest, before any …
Right Of Holders Of Preferred Stock To Participate In The Distribution Of Profits, Jay Finley Christ
Right Of Holders Of Preferred Stock To Participate In The Distribution Of Profits, Jay Finley Christ
Michigan Law Review
When, in the management of the affairs of corporate enterprises, a surplus is available for the payment of dividends, the question often arises, "In what proportions is this fund to be distributed, as between holders of common stock and holders of preferred stock?" When the contract, whether in the by-laws, the subscription agreement, the certificate, or any other form, makes clear the intent of the parties, one way or another, such intent is, of course, controlling. But the intent of the parties may not always be clearly expressed, and in the latter event the rights of the parties are determined …
Recent Important Decisions
Michigan Law Review
A collection of recent important court decisions.