Law Commons^™

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 …