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Corporations - Derivative Suits - Insolvency As A Bar, Edmund O'Hare
Corporations - Derivative Suits - Insolvency As A Bar, Edmund O'Hare
Michigan Law Review
Plaintiff, stockholder in defendant bank, brought a derivative suit against the bank's directors to recover moneys allegedly wrongfully appropriated by them from the bank's assets. Before the commencement of the suit the bank had become insolvent and was in the process of liquidation. Held, the directors' motion to dismiss should be granted, since a stockholder may not maintain an action to hold an insolvent corporation's directors liable for fraud or mismanagement unless it appears that he will be benefited by the relief demanded, and full recovery here would still leave an excess of liabilities over assets. Falvey v. Foreman-State …
Corporations - Conditions Under Which Settlement Of Corporate Claims Will Not Prevent A Stockholder's Derivative Suit On Such Claims, John M. Ulman
Corporations - Conditions Under Which Settlement Of Corporate Claims Will Not Prevent A Stockholder's Derivative Suit On Such Claims, John M. Ulman
Michigan Law Review
In the recent case of United States Lines, Inc. v. United States Lines Co. the plaintiff was a minority stockholder in United States Lines, Inc., whose only asset was a minority stock interest in the United States Lines Company. A majority of the stock in both companies was owned by the International Mercantile Marine Company. An action originally brought by the United States Lines, Inc., but settled out of court, was sought to be continued by the plaintiff, who alleged: (1) that the Marine Company and its subsidiaries had entered into fraudulent contracts with the United States Lines Company and …