Securities Law Commons^™

Corporations - Derivative Suits - Stockholder Demand As Condition Precedent, W. Stanley Walch S.Ed.

Michigan Law Review

A derivative suit alleging directors' fraud was brought by a minority shareholder, but there was no allegation of a demand for relief having been made on the corporation's stockholders prior to bringing the suit. The plaintiff did allege, however, that it was useless and impossible for him to make demand on the stockholders because the complaint charged directors' fraud which was a void act beyond the power of the stockholders to ratify, and secondly because it would be highly unreasonable to require plaintiff to make a demand for relief on more than 100,000 stockholders of the corporation. Delaware Chancery Rule …

Loss & Cowett: Blue Sky Law, Homer D. Crotty

Michigan Law Review

A Review of Blue Sky Law. By Louis Loss and Edward W. Cowett.

Bonds - Income Bonds - Rights Of Bondholders And Deductibility Of Interest For Federal Income Tax Purposes, Guy B. Maxfield S.Ed., Michael M. Lyons S.Ed.

Michigan Law Review

An income bond is an obligation of a corporation on which interest is payable only out of earnings, as distinguished from the ordinary corporate bond on which interest is a fixed charge regardless of earnings. Long regarded as a hybrid security which is to be issued only as a last resort, income bonds have grown surprisingly in popularity over the past two decades. It is the purpose of this comment to consider the historical background of income bonds, to make a comparative analysis of the bond indentures as they affect investors' rights, and to consider the deductibility of income bond …

A New Deal For Fiduciaries' Stock Transfers, Alfred F. Conard

Michigan Law Review

For nearly one hundred years, executors and administrators have been struggling with the excessive documentation which corporations demand as a condition of recording stock transfers. For almost as long, legislatures have been passing laws in the hope-generally vain-of alleviating the burden.

In 1957, at least three states (and possibly four) opened a door through which estate representatives can emerge from their long bondage. For the first time, identical acts were passed in different states, and interstate recognition of simplification measures began. For the first time acts were passed which get to the root of the transfer agent's problem.

Fiduciary Administration - Nominee Statutes - Transfer Of Securities Held For The Benefit Of Another, Joseph T. De Nicola

Michigan Law Review

Michigan is the forty-second jurisdiction to enact a nominee statute. Nominee statutes authorize a fiduciary to nominate a third person to hold stock or securities in the third person's name without giving notice on the stock certificate or on the transfer books of the corporation of his qualified ownership. For the most part it has been assumed that these statutes would facilitate a more rapid transfer of securities. It is the purpose of this comment to compare and analyze these statutes and to determine whether they are the most effective means of accomplishing the end they are intended to serve.

Corporations - Stock Transfer - Enforceability Of Restrictions On Right Of Transfer When Not Stated On Certificate, L. Ronald Modlin

Michigan Law Review

A by-Iaw of defendant corporation provided that no stockholder could sell his shares unless he first offered them for sale to the corporation or its directors. The by-law also stated that this restriction should be printed on the stock certificates and would thereupon bind all present or future owners or holders. The corporation never complied with this latter provision. Plaintiff, having knowledge of the by-law restriction, purchased two shares of the corporation's stock, but these shares were not first offered for sale to the corporation or its directors. When the corporation refused to transfer the shares, plaintiff sued to compel …

Regulation Of Business - Securities Act Of 1933 - Sec Loses Fight To Regulate Variable Annuity, William J. Wise S.Ed.

Michigan Law Review

The defendant, Variable Annuity Life Insurance Company, regulated as a life insurance company by the District of Columbia, issued a contract which it termed an annuity, but which differed from a conventional annuity in certain important respects. Ordinary annuity premiums are invested in debt securities while the premiums paid on the variable annuity are invested in common stocks. Further, instead of benefit payments in fixed dollar amounts, the variable annuity's benefits fluctuate since the value of the fund from which they are paid is affected by changing stock prices and dividend policies. The SEC, claiming these provisions brought the contract …