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Corporations-Stockholder's Suit To Compel Declaration Of Dividends- Necessity Of Directors As Parties, Daniel A. Isaacson S.Ed.

Michigan Law Review

Plaintiff, a citizen of New York and the owner of some preferred stock in the defendant Delaware corporation, brought a class action against the corporation in a federal district court in Pennsylvania to compel the declaration and payment of dividends on the preferred stock, alleging that the directors had acted in had faith in violation of their duties as fiduciaries. Defendant's articles of incorporation provided that the preferred stock was entitled to receive dividends "when and as declared by the Board of Directors"; the by-laws permitted a majority of the hoard to constitute a quorum for purposes of transacting business. …