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Corporations - Sale Of Assets As A Means Of Avoiding State Constitutional Limitation On Corporate Life, Judson M. Werbelow

Michigan Law Review

Defendant, a Michigan corporation, was incorporated in 1923 for a term of thirty years, the maximum term permitted by the Michigan constitution. Shortly before this thirty-year term was to expire, majority and minority stockholders engaged in unsuccessful negotiations, each group attempting to purchase the other's interest in the corporation. A special stockholders' meeting was then called to consider a proposed renewal of the corporate term. This proposal failed to gamer the vote of two-thirds of the outstanding shares which was required for approval. The attorneys representing the majority shareholders proceeded to organize a dummy corporation, which in tum offered the …