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Articles 1 - 7 of 7
Full-Text Articles in Business Organizations Law
Corporations - Employee Stock Option Plans - Nature Of Consideration Required For Valid Plan, Richard E. Day
Corporations - Employee Stock Option Plans - Nature Of Consideration Required For Valid Plan, Richard E. Day
Michigan Law Review
Restricted stock option plans, approved by a majority of the stockholders, were adopted by the defendant corporation in 1951 and 1952 pursuant to, and in compliance with, section 218 of the Revenue Act of 1950, for the purpose of" ... providing an incentive to participating key executive employees in the form of an opportunity to acquire a greater proprietary interest in the corporation and thus stimulate their efforts in the corporate welfare .... " The options were effective and exercisable anytime from the date of issuance to the end of a five-year period, with provision for termination three months after …
Corporations - Shareholders - Majority Liability For Improper Stock Redemption By Corporation And For Misrepresentations In Private Stock Purchases From Minority Holders, James M. Tobin
Michigan Law Review
In 1942 a seemingly innocuous suit was brought against the Axton-Fisher Tobacco Corporation to determine the propriety of the alteration of a stock redemption. In 1955 Judge Leahy of the Federal District Court for Delaware handed down an opinion on the damages and relief to be given in the case in what he hopefully termed was the final phase of this famous litigation. It is the purpose of this comment to appraise the basis of the recovery allowed by Judge Leahy. Two readily distinguishable problems will be treated: (1) the nature of relief from a stock redemption called by fiduciaries …
Corporations - Officers And Directors - Effect Of An Equitable Lien On Directors' Liability, Robert Steele
Corporations - Officers And Directors - Effect Of An Equitable Lien On Directors' Liability, Robert Steele
Michigan Law Review
Defendants, directors of a corporation, appealed from a judgment against them in favor of their company's creditor. The corporation had executed a note promising to repay plaintiff's loan out of the funds from a forthcoming stock issue. The board of directors passed a resolution ordering the officers to repay plaintiff in this manner. The money was then spent for other purposes, with the knowledge of the individual directors, after which the corporation became insolvent. On appeal, held, affirmed. The note and resolution imposed an equitable lien on the fund from the stock sale. The corporation's conversion of this interest …
Corporations - Shareholders - Use Of Corporate Funds For Proxy Contest Expenses, Julius B. Poppinga S.Ed.
Corporations - Shareholders - Use Of Corporate Funds For Proxy Contest Expenses, Julius B. Poppinga S.Ed.
Michigan Law Review
Following a proxy contest in which the insurgent faction of stockholders was successful, the new board of directors paid out $28,000 to members of the old board to cover expenses incurred by them, and also used $127,000 to reimburse the prevailing group. The latter expenditure was approved by a sixteen-to-one majority vote of the stockholders. Plaintiff brought a derivative action seeking restoration of both amounts. The trial court dismissed the complaint, and the appellate division affirmed this judgment. On appeal to the New York Court of Appeals, held, affirmed, three judges dissenting. Corporate directors may make reasonable expenditures in …
Corporations - Shareholders - Power Of The Majority To Ratify Director's Fraud, Paul A. Heinen
Corporations - Shareholders - Power Of The Majority To Ratify Director's Fraud, Paul A. Heinen
Michigan Law Review
Plaintiff, a stockholder in the Kroger Company, brought a derivative suit against a subsidiary of the company and certain officers and directors of both the parent and the subsidiary. It was alleged that . Kroger's directors had fraudulently waived the company's preemptive right to a new issue of stock of the subsidiary and had then purchased the shares for their own accounts at a price far below the market value. The defendants answered that the sale had been ratified by a majority in interest of disinterested stockholders to whom all the details of the transaction had been explained, and denied …
Corporations - Officers And Directors - Agreement Interfering With Management By Board Of Directors, Edward H. Hoenicke S.Ed.
Corporations - Officers And Directors - Agreement Interfering With Management By Board Of Directors, Edward H. Hoenicke S.Ed.
Michigan Law Review
Plaintiffs, minority stockholders in a closely held corporation, asked that the court declare invalid an agreement between the majority stockholders and their "agent-directors" for the management of the business. The agreement provided that for ten years the stock of the parties to the agreement would be voted as a unit as any seven of the agents should direct or, if they could not agree, as directed by an arbitrator chosen by them. The agents were to be elected to the board of directors by the stockholders who appointed them. Under a cumulative voting provision, the parties to the agreement had …
Corporations - Stockholders - Fiduciary Relationship In Sale Of Controlling Stock Interest, Morton A. Polster S.Ed.
Corporations - Stockholders - Fiduciary Relationship In Sale Of Controlling Stock Interest, Morton A. Polster S.Ed.
Michigan Law Review
This comment is concerned with the duty owed by the controlling stockholders to the non-controlling stockholders when there is a sale of the controlling interest. Recently this question was considered by the United States Court of Appeals for the Second Circuit in Perlman v. Feldmann, and the opinion, reversing the lower court and accompanied by a vigorous dissent by Judge Swan, deserves careful consideration.