Law Commons^™

Corporations--Section 10b Of The Securities Exchange Act--Rule X-10b-5--Duty Of Disclosure In Purchasing Shares, John E. Grosboll S.Ed.

Michigan Law Review

Plaintiffs (father and son) and defendants (two brothers) had owned all the capital stock of two corporations. The four constituted the entire board of directors. Defendants secretly entered into a contract with the National Gypsum Company agreeing to sell the latter the plant and equipment of one of the corporations and one third of the output of the other corporation over a three year period. Later the defendants purchased all of plaintiffs' stock in the two corporations. At that time plaintiffs knew nothing about the negotiations between defendants and National Gypsum, nor did defendants make any disclosures relative thereto. At …