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Articles 451 - 480 of 698

Full-Text Articles in Securities Law

Corporations-Dividends-Majority Of The Board Of Directors As Indispensable Parties In A Suit To Compel The Declaration Of Corporate Dividends, James W. Callison May 1952

Corporations-Dividends-Majority Of The Board Of Directors As Indispensable Parties In A Suit To Compel The Declaration Of Corporate Dividends, James W. Callison

Michigan Law Review

A minority group of stockholders brought an action to compel a declaration of dividends on common stock, naming as defendants the Continental Mills company, four of the five directors of the corporation, and a majority stockholder. Effective service of process was made only on the corporation and two of the directors. The majority stockholder and the other two directors named appeared specially and obtained a dismissal of the action as to them. The two directors properly served then moved to dismiss the action for failure to include a majority of the board of directors as parties. Held, a majority …

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Personal Property-Tenancy By The Entirety In United States Series "E" Savings Bonds, William E. Beringer Apr 1952

Personal Property-Tenancy By The Entirety In United States Series "E" Savings Bonds, William E. Beringer

Michigan Law Review

A trustee in bankruptcy petitioned the referee to order a bank to tum over certain United States Series ''E" Savings Bonds as assets of the bankrupt's estate. The bonds were payable to the bankrupt "or" his wife and had been pledged to the bank by the bankrupt, with his wife's consent, as collateral for a personal loan. The referee denied the petition. On appeal, held, affirmed. Since the bonds were payable to persons who were husband and wife, a tenancy by the entirety was created, with each tenant holding an interest in the whole of the bond property. Neither …

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Corporations-Majority Shareholder's Fraud In The Purchase Of Stock, Thomas P. Segerson S.Ed. Mar 1952

Corporations-Majority Shareholder's Fraud In The Purchase Of Stock, Thomas P. Segerson S.Ed.

Michigan Law Review

Whether or not there has been fraud in the purchase of property, due to either affirmative statements or mere non-disclosure, may well depend upon the relation of the purchaser to the vendor. The recent case of Speed v. Transamerica Corporation presents two questions relative to this problem in the purchase of corporation shares: first, whether the price quoted in an offer to purchase can ever be the basis of an action for fraud and deceit; and second, whether the majority shareholder of a corporation occupies a fiduciary relation to minority shareholders in the purchase of their stock. Defendant was the …

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Some Latter Day Developments In The Taxation Of Liquidating Distributions: Is The Cop Still On The Beat?, Willard H. Pedrick Feb 1952

Some Latter Day Developments In The Taxation Of Liquidating Distributions: Is The Cop Still On The Beat?, Willard H. Pedrick

Michigan Law Review

Redemption and salvation are doctrinal terms suggestive of the enthusiasm of the camp meeting. It is altogether fitting that these terms be used in connection with the taxation of corporate liquidating distributions. Through redemption of his stock the shareholder may find this world's nearest approach to fiscal salvation-taxation of his receipts on a capital-gains basis. To say the shareholder's enthusiasm for capital-gains treatment approaches a religious zeal is to underestimate the matter. Nor is it difficult to understand his attitude. If corporate earnings and profits, subjected at the outset to a relatively Hat but heavy corporate income tax, are paid …

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Taxing Distributions Pursuant To Corporate Reorganizations, William M. Emery Feb 1952

Taxing Distributions Pursuant To Corporate Reorganizations, William M. Emery

Michigan Law Review

"Distributions" implies that we are concerned with the tax problems of the stockholder rather than those of the corporation. And while one corporation may be the stockholder of another, my emphasis will be primarily upon stockholders who are individuals, including, of course, trusts and estates who are taxed as individuals.

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Corporations-Dissolution-Payment Of "Accrued Unpaid Dividends" To Preferred Shareholders From Capital, Frank M. Bowen, Jr. Feb 1952

Corporations-Dissolution-Payment Of "Accrued Unpaid Dividends" To Preferred Shareholders From Capital, Frank M. Bowen, Jr.

Michigan Law Review

The Big Bend Land Company was in the process of liquidation. The articles of incorporation provided for preferred stock which "in the event of any liquidation . . . " was " . . . entitled to be paid in full the par value thereof, and all accrued unpaid dividends thereon before any sum shall be paid to or any assets distributed among . . ." the common stock. No dividends had ever been declared or paid, nor had there ever been any surplus profits. After discharging all corporate liabilities, including payment of the par value of the preferred stock, …

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Corporations-Shareholders-Right To Bring Personal Action After Dissolution Of Corporation, Harry T. Baumann Feb 1952

Corporations-Shareholders-Right To Bring Personal Action After Dissolution Of Corporation, Harry T. Baumann

Michigan Law Review

Plaintiff stockholder brought a personal action against the president and majority stockholder for fraudulent conversion of money and property of a corporation dissolved prior to the start of plaintiff's suit. A statute provided that a dissolved corporation could sue to recover on a corporate right of action. Defendant's demurrer was sustained. On appeal, held, affirmed. An action to enforce corporate injuries cannot be maintained by a stockholder in his own name, even though the corporation has been dissolved. Ruplinger v. Ruplinger, (Neb. 1951) 48 N.W. (2d) 73.

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Federal Procedure-Jurisdiction-Determination Of Amount In Controversy In Class Actions Under Federal Rule 23, James W. Callison Feb 1952

Federal Procedure-Jurisdiction-Determination Of Amount In Controversy In Class Actions Under Federal Rule 23, James W. Callison

Michigan Law Review

Plaintiff owned 50 shares of common stock valued at $950. She brought an action in behalf of herself and all other stockholders to enjoin a sale of unissued stock by the corporation to its president, claiming a violation of her preemptive right. The district court ruled on the merits. On appeal, held, the plaintiff's interest was but a small fraction of the $3,000 required to invoke the jurisdiction of the federal courts. Although the action was representative, the claims of other stockholders in a like situation could not be cumulated. Ames v. Mengel Co., (2d Cir. 1951) 190 …

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Employee Stock Options, Reece A. Gardner Jan 1952

Employee Stock Options, Reece A. Gardner

Michigan Law Review

The taxation to an employee of the difference between the fair market value of a share of stock transferred to him by a corporate employer, pursuant to the employee's exercise of an option to acquire it at a price below the value of the share, has for years been a matter of dispute between taxpayers and the Commissioner of Internal Revenue. This dispute has involved not merely, as in the case of many of the hardy tax perennials such as reasonableness of compensation, a question as to the application of facts to a well-defined principle of law, but rather a …

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Corporations-Securities Exchange Act Of 1934--Measure Of Shortswing Profits Under Section 16(B), Harry T. Baumann Jan 1952

Corporations-Securities Exchange Act Of 1934--Measure Of Shortswing Profits Under Section 16(B), Harry T. Baumann

Michigan Law Review

Plaintiff stockholder brought a derivative action against the defendant officer for profits made in violation of section 16(b) of the Securities Exchange Act of 1934 on the purchase and sale, within six months, of securities issued by the corporation under an "incentive" option agreement. The contract provided that on or after the first accrual date, until a fixed termination date, a stated number of shares could be purchased at a set price; the same privilege accrued with the identical termination date in each of the next two years. There was no dispute of fact; the question thus centered on the …

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Corporations-Dissolution-Power Of Chancellor To Decree Dissolution When Deadlock Exists, John J. Edman S. Ed. Dec 1951

Corporations-Dissolution-Power Of Chancellor To Decree Dissolution When Deadlock Exists, John J. Edman S. Ed.

Michigan Law Review

Plaintiffs sought dissolution of defendant corporation pursuant to a statute allowing a petition for dissolution to be made to the chancellor by the holders of one-half of the voting stock upon a deadlock in management and voting shares. The evidence showed that there was no chance of compromise by the warring factions, that the corporate function could not be carried out, and that the plaintiffs' interests might be jeopardized. The chancellor held that unless a harmonious solution was effectively formulated within fifteen days after the filing of an opinion, a judgment containing appropriate provisions for a dissolution would be entered. …

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Corporations-Liability Of Transfer Agent For Wrongful Refusal To Transfer Shares, Howard Van Antwerp S.Ed. Nov 1951

Corporations-Liability Of Transfer Agent For Wrongful Refusal To Transfer Shares, Howard Van Antwerp S.Ed.

Michigan Law Review

Plaintiff, stockholder in a mining company, sued a transfer agent of the company in conversion for its refusal to transfer plaintiff's stock into block shares. The lower court found for plaintiff. On appeal, held, reversed. There is no direct liability of a transfer agent to the stockholder for wrongful nonfeasance in delaying or refusing to transfer stock. Mears v. Crocker First Nat. Bank of San Francisco, (Cal. App. 1950) 218 P. (2d) 91.

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Corporations-Voluntary Reorganization Under The Public Utility Holding Company Act Of 1935-Valuation Of Stock Option Warrant, William H. Bates Jun 1951

Corporations-Voluntary Reorganization Under The Public Utility Holding Company Act Of 1935-Valuation Of Stock Option Warrant, William H. Bates

Michigan Law Review

Appellant corporation submitted a voluntary reorganization plan to the Securities and Exchange Commission pursuant to sections II(h)(2) and II(e) of the Public Utility Holding Company Act of 1935. The plan consisted of two parts. The first proposed consolidation of three of the appellant's subsidiaries into a newly formed operational company. The second part provided for dissolution of the appellant corporation, with the holders of securities therein being issued stock in the new corporation to the extent of the value of their interest in the appellant corporation. All the security holders of appellant were allowed participation in the securities of the …

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Conflicts Of Law-Negotiable Instruments-Situs Of Bearer Bonds, Paul M.D. Harrison S.Ed. May 1951

Conflicts Of Law-Negotiable Instruments-Situs Of Bearer Bonds, Paul M.D. Harrison S.Ed.

Michigan Law Review

By a Vesting Order, the Alien Property Custodian vested in the Attorney General property of an enemy alien which consisted of a "certain debt or other obligation" underlying bonds issued by the defendant corporation. The defendant corporation was ordered to cancel the said bonds and deliver the proceeds of the redemption and accrued interest to the Attorney General. Upon the trial of the action brought by the Attorney General to enforce these demands, it appeared in evidence that the bond certificates had last been located in the Russian sector of Berlin, Germany, and were there seized by the occupying authorities. …

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Federal Procedure-Jurisdiction-Diversity Of Citizenship Required In Stockholder's Derivative Suit, Morris G. Shanker May 1951

Federal Procedure-Jurisdiction-Diversity Of Citizenship Required In Stockholder's Derivative Suit, Morris G. Shanker

Michigan Law Review

Plaintiff, a citizen of New York, instituted a stockholder's suit on behalf of a New York corporation in the United States District Court for the Southern District of New York. Individual officers and directors of the corporation, all citizens of Connecticut, were charged with mismanagement and were joined with it as party defendants. Since plaintiff and defendant corporation were both citizens of New York, requisite diversity did not exist, and the district court dismissed the claim for lack of jurisdiction. Upon appeal, held, judgment affirmed. The section of the Federal Judicial Code providing that "any civil action by a …

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Corporations--Stockholders' Rights--Majority Discretion As Bar To Derivative Suit, Richard Darger Apr 1951

Corporations--Stockholders' Rights--Majority Discretion As Bar To Derivative Suit, Richard Darger

Michigan Law Review

Plaintiffs, minority stockholders of defendant corporation, brought an equitable action against certain directors thereof alleging the following wrongs: profits made by purchasing the corporation's notes at a discount; carrying out a plan to gain stock control; settlement of anti-trust suits out of court; excessive compensation of directors under management contracts alleged to violate anti-trust laws; paying excessive film rentals to another corporation. Plaintiffs unsuccessfully demanded that the board bring action against the directors on these grounds and then make a like demand at a stockholders' meeting. The stockholders voted not to sue, approved all actions alleged to be wrongs and …

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Corporations--Stockholders' Rights--Majority Discretion As Bar To Derivative Suit, Richard Darger Apr 1951

Corporations--Stockholders' Rights--Majority Discretion As Bar To Derivative Suit, Richard Darger

Michigan Law Review

Plaintiffs, minority stockholders of defendant corporation, brought an equitable action against certain directors thereof alleging the following wrongs: profits made by purchasing the corporation's notes at a discount; carrying out a plan to gain stock control; settlement of anti-trust suits out of court; excessive compensation of directors under management contracts alleged to violate anti-trust laws; paying excessive film rentals to another corporation. Plaintiffs unsuccessfully demanded that the board bring action against the directors on these grounds and then make a like demand at a stockholders' meeting. The stockholders voted not to sue, approved all actions alleged to be wrongs and …

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Alterations Of Accrued Dividends: Ii, Arno C. Becht Feb 1951

Alterations Of Accrued Dividends: Ii, Arno C. Becht

Michigan Law Review

If the present course of decisions is continued, it is a serious question whether investors can safely purchase preferred stock at a price above the common stock of the same corporation. In all frankness, such certificates should now bear on their faces a statement that they are subject to alteration in a great variety of ways, all to their detriment, and that if business is bad, losses will be visited upon them, regardless of the liquidation and other preferences which they have on paper. It seems not unlikely that corporations will find that the temporary expedients which they have adopted …

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Alterations Of Accrued Dividends: I, Arno C. Becht Jan 1951

Alterations Of Accrued Dividends: I, Arno C. Becht

Michigan Law Review

When a preferred stock has cumulative dividends and the dividend period passes without payment, the dividend is said to "accrue." The meaning of the term "accrued" has been the subject of much inquiry. Since a stockholder cannot sue for an accrued dividend for the same reasons that he cannot sue for any other undeclared dividend, the term clearly does not mean what it does in the law of debt, i.e., that a cause of action has arisen. It means only that no dividend can be paid on the common stock until that dividend has been paid on the preferred stock. …

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Corporations-Measure Of Short Swing Profits Under Section 16(B) Of The Securities Exchange Act Of 1934, G. B. Myers S.Ed. Dec 1950

Corporations-Measure Of Short Swing Profits Under Section 16(B) Of The Securities Exchange Act Of 1934, G. B. Myers S.Ed.

Michigan Law Review

Plaintiff, a stockholder in X corporation, sued in the name of and on behalf of the corporation to recover short swing profits made by defendants in the sale of stock purchase warrants of the corporation, in violation of the Securities Exchange Act. Defendants were officers of the corporation and as part of the consideration for entering into their contracts of employment they received each year a number of these warrants. Within six months of the receipt of their 1945 warrants defendants had made certain sales of warrants then held by them. The court, in a previous ruling, had granted a …

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Taxation-Stock Dividends As Income, Joseph G. Egan S.Ed. Dec 1950

Taxation-Stock Dividends As Income, Joseph G. Egan S.Ed.

Michigan Law Review

X corporation had two classes of stock outstanding. The Class A stock was a preferred stock entitled to cumulative dividends and a liquidation preference. The Class B stock was a non-voting stock, entitled to an annual $2 dividend after payment of the dividend on the preferred. Both classes were entitled to participate equally (on a pro rata basis) in any dividends in excess of the two mentioned above. The corporation declared a stock dividend, entitling each Class A holder to one-half share of Class A stock for each share presently held, and each Class B holder to one-half share of …

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Trusts-Corporate Trustee's Duty Of Loyalty-Merger Of The Trustee Corporation With A Corporation In Which The Trust Held Shares, Nancy J. Ringland Jun 1950

Trusts-Corporate Trustee's Duty Of Loyalty-Merger Of The Trustee Corporation With A Corporation In Which The Trust Held Shares, Nancy J. Ringland

Michigan Law Review

Securities delivered to the trustee under provisions of a will included stock in the corporate trustee and in a bank. Subsequently, the bank and the trust company affiliated, under an agreement whereby the bank acquired substantially all the stock of the trust company, to be held for the benefit of the shareholders of the bank. The holders of the trust stock and the old bank stock exchanged their shares for new stock in the bank. The trust authorized the trustee to retain stocks in the trust estate, to invest in securities other than of the character prescribed by law for …

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Joint Tenancy-Creation Of Joint Tenancy In Stock Certificates And The Shares Represented Thereby, Rex Eames May 1950

Joint Tenancy-Creation Of Joint Tenancy In Stock Certificates And The Shares Represented Thereby, Rex Eames

Michigan Law Review

A, registered owner of certain stock certificates, endorsed them and turned them over to an agent with instructions to forward them to the respective corporations for transfer of the shares to A and B as joint tenants. Thereafter, the corporations issued certificates to A and B "as joint tenants with the right of survivorship and not as tenants in common." The plaintiff, A's administrator, brought a bill in equity against B to recover a one-half undivided interest in the shares of stock. Held, bill dismissed. No joint tenancy was created as there was an absence of the …

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Personal Property-United States Savings Bonds--Effect Of Registration In Co-Ownership Or Beneficiary Form As A Transfer Of A Property Interest Therein, Walter L. Dean May 1950

Personal Property-United States Savings Bonds--Effect Of Registration In Co-Ownership Or Beneficiary Form As A Transfer Of A Property Interest Therein, Walter L. Dean

Michigan Law Review

In two recent cases, decedents purchased United States Savings Bonds registered in the name of the purchaser and another person which were never delivered to the named co-owner but remained in the possession of the purchaser until his death. In the first case, on appeal from an order of the district court refusing to impose an inheritance tax on the bonds after the death of the purchaser, held, reversed. Mere purchase of the bonds and their registration in the names of the co-owners without delivery transferred no interest to the co-owners during the life of the purchaser and is …

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Corporations-Power To Reacquire Own Stock-Construction Of Statute Thereon, Fred W. Freeman S.Ed. Apr 1950

Corporations-Power To Reacquire Own Stock-Construction Of Statute Thereon, Fred W. Freeman S.Ed.

Michigan Law Review

The Supreme Court of Rhode Island recently upheld the purchase by a corporation of its own stock in a transaction which impaired capital, despite the presence of an express statutory provision "that no corporation shall use its funds or property for the purchase of its own shares of capital stock when such use would cause any impairment of the capital of the corporation." The court maintained that this statute applies only to an impairment of capital which is detrimental to creditors; and that since the corporation in question had no creditors, there was no violation. This contention was based on …

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Corporations-Dividend Rights-Elimination Of Dividend Accumulations By Direct Charter Amendment, Thomas L. Waterbury S.Ed. Mar 1950

Corporations-Dividend Rights-Elimination Of Dividend Accumulations By Direct Charter Amendment, Thomas L. Waterbury S.Ed.

Michigan Law Review

The many recent discussions of the problem of dividend accumulations show that plausible grounds exist for reaching a conclusion in favor of either the minority preferred shareholder who wishes to retain these rights, or the majority preferred and common shareholders who, with the corporate management, desire to eliminate or circumvent them. It is not the purpose of this comment to re-open that controversy, though it may be observed that the current trend of both legislation and decision favors the interests of the latter group. Rather, this discussion assumes that the current trend is the correct view and will examine the …

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Corporations-Membership Corporations-Voting Rights Under California Law, Howard Vanantwerp Mar 1950

Corporations-Membership Corporations-Voting Rights Under California Law, Howard Vanantwerp

Michigan Law Review

The original owner of a subdivision recorded a declaration of restrictions which provided that "the majority of the property owners within the subdivision may form . . . a non-profit cooperative corporation without capital stock, but with one share thereof appurtenant to each of the lots in such subdivision,'' to approve plans for building on these lots. Defendants acquired 133 lots and commenced construction of homes in spite of the disapproval of their plans by the association organized under the authority of the declaration. The two defendants claimed to have acquired majority control of the association, claiming 133 votes as …

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Trusts-Restraints On Alienation-Invalidity Of Voting Trust Wherein Voting Trust Certificates Were Made Inalienable, W. P. Sutter S.Ed. Mar 1950

Trusts-Restraints On Alienation-Invalidity Of Voting Trust Wherein Voting Trust Certificates Were Made Inalienable, W. P. Sutter S.Ed.

Michigan Law Review

Two stockholders, controlling a majority of the class B stock of the X corporation, transferred their stock to themselves jointly as trustees for a ten-year period. The trustees were to vote the stock as a unit, and had full voting powers on all matters affecting the corporation. Trustees agreed not to transfer the stock without the approval of both holders, and the holders agreed not to sell their stock or the voting trust certificates. Moreover, on the death of one holder-trustee, the other had an option to purchase all his interest in the stock. In an action in equity to …

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Corporations-Shares Of Stock-Reasonableness Of Restriction On Transfer Of Shares, E. Blythe Stason, Jr. Nov 1949

Corporations-Shares Of Stock-Reasonableness Of Restriction On Transfer Of Shares, E. Blythe Stason, Jr.

Michigan Law Review

Defendant corporation's by-laws provided, inter alia, that shareholders wishing to dispose of their shares must, in absence of contrary agreement with the remaining shareholders, give latter an option to buy at a price equal to book value, regardless of market value of these shares. This restriction was not set forth in the share certificates as required by statute. On refusal of defendant corporation to permit transfer of its shares except in compliance with the terms of the by-law, complainants brought suit for declaratory judgment, and obtained a finding that these terms were void. Held, affirmed. The by-law restriction violated …

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Corporations-Officers And Directors-Stock Option Incentive Employment Contracts For Corporation Executives, A. B. Perlin, Jr. S.Ed. Jun 1949

Corporations-Officers And Directors-Stock Option Incentive Employment Contracts For Corporation Executives, A. B. Perlin, Jr. S.Ed.

Michigan Law Review

In the past few decades considerable attention has been directed toward "piecework payment" for corporate executives; that is, compensation based largely upon results rather than upon past or expected performance. The stock option incentive employment contract' is one of the means utilized to achieve that desired objective.

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