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Corporations—Rights Of Preferred Stockholders Upon Dissolution, Louis Rousso

Washington Law Review

A corporation's articles of incorporation provided: "In the event of any liquidation, dissolution or winding up of the Corporation the holders of the preferred stock shall be entitled to be paid in full the par value thereof, and all accrued unpaid dividends thereon [italics added] before any sum shall be paid to or any assets distributed among the holders of the common stock." During the corporation's existence, it had never declared a dividend. Furthermore, there was no surplus on hand at date of dissolution. In an attempt to determine the rights of the respective stockholders, the liquidating trustees of the …