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Articles 511 - 540 of 697

Full-Text Articles in Securities Law

Taxation - Income Tax - Capital Gains - Cost Basis To Distributee, David N. Mills Jan 1942

Taxation - Income Tax - Capital Gains - Cost Basis To Distributee, David N. Mills

Michigan Law Review

Testator died in 1903, and the executors turned over the residue of his estate to themselves as testamentary trustees in 1905. In 1923, pursuant to the will, trustees delivered part of the original trust property, together with other property purchased with trust funds, to plaintiff, the equitable remainderman under the trust. In 1930 plaintiff sold some of the securities which had constituted the corpus of the trust. In determining the cost basis for the capital gains tax on this transaction, plaintiff claimed that the market value on the date when the trustees delivered the property to him in 1923 should …

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Taxation - Income Tax - Inclusion Of Unpaid Dividends In Decedent's Income, Michigan Law Review Jan 1942

Taxation - Income Tax - Inclusion Of Unpaid Dividends In Decedent's Income, Michigan Law Review

Michigan Law Review

Decedent owned stock in a corporation whose board of directors declared a dividend on April 30, 1934, for the fiscal year ending January 31, 1935, payable to stockholders of record at such times and in such installments as the directors might determine. At the time of decedent's death, October 15, 1934, only one-half of the dividend had been paid to him, but the commissioner included in the gross income of the decedent for the taxable period prior to death the entire amount of the dividend declared. The Board of Tax Appeals reduced this amount to the portion of the dividend …

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Holding Company Act - "Controlling Influence", Smith Warder Dec 1941

Holding Company Act - "Controlling Influence", Smith Warder

Michigan Law Review

Most new and revolutionary statutes for the regulation of interstate trade and commerce cause both lawyers and businessmen many headaches before their terms become fixed in meaning by judicial interpretation. The Public Utility Holding Company Act of 1935 is no exception. Difficult questions of interpretation are bound to arise under a statute of such a complicated nature, leaving, as it does, so much to the discretion of administrative officers. In the spring of this year the problem of what is a "controlling influence" was brought to light by two cases. While each case raised the question in a situation totally …

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Corporations - Pre-Emptive Rights Of Shareholders In Originally Authorized But Unissued Capital Stock, Everett R. Trebilcock Nov 1941

Corporations - Pre-Emptive Rights Of Shareholders In Originally Authorized But Unissued Capital Stock, Everett R. Trebilcock

Michigan Law Review

Plaintiff, a minority stockholder, brought an action to cancel 58,400 shares of originally authorized but unissued stock which the directors had issued to defendant general manager in payment of his services. Plaintiff contended this violated his pre-emptive right to subscribe to the shares and alleged the transaction was fraudulent in that defendant and the directors conspired to gain voting control. Held, the issue was proper because the stock was part of the first offering of original authorized capital stock to which plaintiff's pre-emptive right did not attach, and plaintiff failed to show collusion between directors and defendant to gain …

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Holding Company Act - "Fair And Equitable" Plan, Michigan Law Review Nov 1941

Holding Company Act - "Fair And Equitable" Plan, Michigan Law Review

Michigan Law Review

Should the words "fair and equitable" in section II (e) of the Holding Company Act be construed differently than the same words in section 77 B of the Bankruptcy Act? The Securities and Exchange Commission faced this question in disposing of a proposed plan of merger involving Utility Operators Company and subsidiaries. A divided commission gave an affirmative answer to the above question, holding "fair and equitable" in the Holding Company Act to permit relative priority. This holding merits particular interest since the United States Supreme Court has held the same words as used in section 77B permitted only absolute …

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Securities Legislation - Public Utility Holding Company Act Jurisdiction Of The Securities And Exchange Commission, Robert Kneeland Jun 1941

Securities Legislation - Public Utility Holding Company Act Jurisdiction Of The Securities And Exchange Commission, Robert Kneeland

Michigan Law Review

In 1935 the International Paper and Power Company filed an application with the Securities and Exchange Commission to secure permanent exemption from the provisions of the Public Utility Holding Company Act of 1935. While this application was pending, the company formed a plan for recapitalization of its stock, and applied to the commission for an order validating the plan. The report of the commission on this plan was approved by the requisite number of shareholders of the company, whereupon the commission entered an order purporting to exempt from the provisions of the act the stock and the warrants for stock …

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Municipal Corporations - Bonds Redeemable At Option Of Municipality- Notice To Bondholders Necessary To Stop Running Of Interest, Michigan Law Review Jun 1941

Municipal Corporations - Bonds Redeemable At Option Of Municipality- Notice To Bondholders Necessary To Stop Running Of Interest, Michigan Law Review

Michigan Law Review

Defendant municipality issued bonds redeemable before maturity at defendant's option. There was no provision for registration, and neither the statute nor the bonds provided for notice of redemption. In May,1938, notice was published in newspapers of general circulation that the bonds were to be redeemed on June 1. Plaintiff, owner of the entire issue, did not know of the redemption until September 27. It sued for interest from June 1 to September 27. Held, notice by publication is sufficient to stop the running of interest, and plaintiff is therefore not entitled to recover. Philadelphia Savings Fund Society v. City …

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Corporations - Reserved Powers - Abrogation Of Preferred Dividend Arrearages By Charter Amendment, Merger, Or Consolidation, William D. Sutton May 1941

Corporations - Reserved Powers - Abrogation Of Preferred Dividend Arrearages By Charter Amendment, Merger, Or Consolidation, William D. Sutton

Michigan Law Review

The "malignant" decision in the Dartmouth College case fathered the passage of reserved-power statutes in virtually all the states. These statutes, in turn, when opposed by the retaliatory fundamental-rights safeguards invoked by the courts for the protection of corporate stockholders, procreated problems which have grown more baffling and incorrigible with age. Not the least among these are proposed changes in the liabilities or rights of stockholders, especially the attempted abolition of unpaid accrued dividends upon cumulative preferred stock where there exists a surplus which might lawfully be applied to the payment of such dividends.

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Trusts - Rights Of Successive Beneficiaries To Corporate Stock Dividends - Ordinary And Extraordinary Dividends, John C. Johnston May 1941

Trusts - Rights Of Successive Beneficiaries To Corporate Stock Dividends - Ordinary And Extraordinary Dividends, John C. Johnston

Michigan Law Review

Testatrix died in March, 1935 leaving 5,471 shares of N corporation stock in two trusts with directions that a portion of the income therefrom should be paid to her son during his life with remainder over to another. At the time of testatrix' death the N corporation had a large surplus, and had been paying regular quarterly dividends from current income. From April, 1935 to December, 1937 these quarterly dividends were continued at one dollar per share less than was customary, but because of business conditions they were paid partly from the surplus which had accumulated prior to the death …

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Trusts - Investment Of Trust Funds In The Securities Of Private Corporations, Felicia I. Hmiel Apr 1941

Trusts - Investment Of Trust Funds In The Securities Of Private Corporations, Felicia I. Hmiel

Michigan Law Review

The trustees of a charitable trust established for the erection and maintenance of a hospital sued the state attorney general as a representative of an unnamed class of beneficiaries to secure the approval of certain investments of the trust fund. The transactions in question were investments in the common and preferred stocks of private corporations. Held, the trustees had authority to invest in the common and preferred stocks of private corporations provided they exercised a reasonable degree of care under the circumstances. Rand v. McKittrick, (Mo. 1940) 142 S. W. (2d) 29.

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Federal Courts - Decisions Of State Intermediate Courts As State Law To Be Applied By Federal Courts, Spencer E. Irons Mar 1941

Federal Courts - Decisions Of State Intermediate Courts As State Law To Be Applied By Federal Courts, Spencer E. Irons

Michigan Law Review

The Circuit Court of Appeals for the Sixth Circuit held that a federal district court in Ohio was not bound by a decision of the Cuyahoga County Court of Appeals to the effect that in a case of wrongful transfer of shares of stock, a demand and refusal was necessary to start the statute of limitations running. On certiorari, held, that, in ascertaining what the state law is, lower state court decisions are data which are not to be disregarded by a federal court, unless it is convinced by other persuasive data that the highest court of the state …

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Corporations - Officers And Directors - Duty To Investigate Purchasers Of Controlling Interest, Michigan Law Review Feb 1941

Corporations - Officers And Directors - Duty To Investigate Purchasers Of Controlling Interest, Michigan Law Review

Michigan Law Review

Plaintiff corporation, an investment trust specializing in shares of small life insurance companies, brought an action against its former officers and directors, referred to as "the management group," who in 1937 owned twenty-seven per cent of the outstanding stock of the corporation. This group sold all their stock at an inflated price to another group, referred to as "the Boston group," who on the resignation of the management group immediately elected themselves to the control of the corporation. By this control the Boston group obtained access to the portfolio and proceeded systematically to rob the corporation of all its securities. …

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Garnishment Of Corporate Stock, Walter B. Connolly Jan 1941

Garnishment Of Corporate Stock, Walter B. Connolly

Michigan Law Review

Ancillary to an action on a foreign judgment obtained against defendant, plaintiff started a garnishment proceeding in Minnesota against certain domestic corporations including the Weisman Holding Co. Officers of the Weisman Holding Co. refused to make disclosures of the stock ownership of the principal defendant on the grounds that the plaintiff had no right to garnish defendant's shares of stock after the certificates for those shares had been delivered. Held, that the disclosure should be made because shares of corporate stock are "personalty" in possession of the corporation and subject to garnishment as the property of the shareholder, even …

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Taxation - Commerce Clause - Tax By Seller State On Contract To Sell Interstate, Walter B. Connolly Jan 1941

Taxation - Commerce Clause - Tax By Seller State On Contract To Sell Interstate, Walter B. Connolly

Michigan Law Review

Appellants were partners in the securities business with offices in New York City. In the course of their business they agreed to sell shares of stock to two firms, one engaged in business in Philadelphia, the other in Washington, D. C. The securities were mailed to banks in Philadelphia and Washington for delivery upon payment of sight drafts attached. Under the tax law of the state of New York, a tax was levied on the sale of this stock. Appellants sought a refund of the tax on the ground that the statute imposed an unconstitutional burden on interstate commerce. Held …

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Bankruptcy-Corporate Reorganization-Publicly Held Securities As A Test Of Availability Of Relief Under Chapters X And Xi Of The Chandler Act, Edward S. Biggar Nov 1940

Bankruptcy-Corporate Reorganization-Publicly Held Securities As A Test Of Availability Of Relief Under Chapters X And Xi Of The Chandler Act, Edward S. Biggar

Michigan Law Review

Chapter X of the amended Bankruptcy Act of 1938 was mainly the product of the investigation by the Securities and Exchange Commission of reorganization practices under the old equity procedure and under section 77B. The chief aim of the sponsors of this new chapter was to preclude the control of reorganization proceedings by "inside" groups, and thereby more adequately protect the interests of investors. Contemporaneously with the overhauling of section 77B, however, other sections of the old Bankruptcy Act were being revised. Among the changes effected, old sections 12 and 74, dealing with extensions and compositions, were remodelled and combined …

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Taxation - Federal Income Tax - Evasion Through Use Of The Corporate Entity, G. Randall Price Jun 1940

Taxation - Federal Income Tax - Evasion Through Use Of The Corporate Entity, G. Randall Price

Michigan Law Review

The taxpayer purchased A Company stock from X for $100,000 and later sold it for $7,500, deducting the loss in his tax return for that year. Following the discovery of fraud on the part of X he reacquired the stock for $8,000 and then negotiated a settlement with X providing for a resale to X for $100,000. To avoid high taxes on the resulting profit, the taxpayer organized B corporation and purchased all its stock. He then sold to it the A Company stock and all his claims against X in return for its promise to pay back the $100,000 …

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Securities Legislation - Civil Liabilities On Account Of False Registration Statement - Limitations Of Actions - Licenses, Michigan Law Review May 1940

Securities Legislation - Civil Liabilities On Account Of False Registration Statement - Limitations Of Actions - Licenses, Michigan Law Review

Michigan Law Review

Plaintiff, purchaser of stock in Condor Pictures, Inc., brought an action against the officers of the corporation and the auditors who certified the registration statement, to recover damages under section II of the Securities Act of 1933. The action was founded upon misrepresentations and omissions in the registration statement, concerning a lease made by Condor Pictures, Inc., which the auditors failed to set up as a contingent liability. The defendants at the time of the suit stipulated that the stock had no market value, but the plaintiff did not offer any evidence of the actual value of the stock beyond …

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Taxation - Jurisdiction - Classification Of Property As Tangible Or Intangible, John L. Rubsam May 1940

Taxation - Jurisdiction - Classification Of Property As Tangible Or Intangible, John L. Rubsam

Michigan Law Review

Respondent's decedent died testate in 1936 and was at the time of his death a resident of and domiciled in Oregon. In earlier years when he resided in Wisconsin he placed various stocks, bonds and other intangibles in the possession of an Illinois trust company, which acted as his agent in collecting and investing the principal and income on these securities. These securities were always physically present in Illinois, never in Oregon. About six months before his death respondent's decedent directed the trust company to sell some of his bonds and purchase $450,000 worth of federal irrevocable trust for the …

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Taxation - Federal Income Tax - Distinction Between Sale And Tax Exempt Reorganization Under Section 112, Henry J. Merry Mar 1940

Taxation - Federal Income Tax - Distinction Between Sale And Tax Exempt Reorganization Under Section 112, Henry J. Merry

Michigan Law Review

The recent Supreme Court decision in Le Tulle v. Scofield, disapproving the views of four out of five circuit courts of appeals, appears to add a new and more specific requirement to the already complex law on the subject of statutory reorganization under the Revenue Act of 1928 -- that the consideration received by the transferor corporation include some stock of the transferee corporation. In the subject case, the Gulf Coast Irrigation Company transferred substantially all its assets to the Gulf Coast Water Company in exchange for $50,000 in cash and $750,000 in mortgage bonds, four-fifths of which matured …

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Corporations - Transfer Of Stock - Liability To Remainderman For Absolute Transfer At Instance Of Life Tenant, James D. Ritchie Mar 1940

Corporations - Transfer Of Stock - Liability To Remainderman For Absolute Transfer At Instance Of Life Tenant, James D. Ritchie

Michigan Law Review

X, life tenant of certain stock of defendant company under a will, endorsed the certificates as life tenant; Y Company guaranteed his signature and itself endorsed in blank. Defendant, with knowledge of X's limited interest, transferred the stock on the books and issued new certificates to Y Company absolutely. Learning of their interests after X's death, plaintiff-remaindermen demanded certificates for the stock from defendant, which refused. In their action for conversion, held, that defendant breached its fiduciary duty to plaintiffs in making an absolute transfer with knowledge that the transferee had only a life interest and …

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Trading In Securities By Directors, Officers And Stock.Holders: Section 16 Of The Securities Exchange Act, Kenneth L. Yourd Dec 1939

Trading In Securities By Directors, Officers And Stock.Holders: Section 16 Of The Securities Exchange Act, Kenneth L. Yourd

Michigan Law Review

The prime objective of the Securities Exchange Act is the establishment and maintenance of a free and open market for trading in securities; a free and open market in the sense that the prices obtaining thereon represent an evaluation of worth based upon a full knowledge in all traders of all pertinent facts and circumstances. In an attempt to achieve a realization of the ideal concept of a free and open market, the framers of the Securities Exchange Act have been careful to bring within the purview of the enactment all elements which they believed in any way were reflected …

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Corporations - Recapitalization By Statutory Merger And Consolidation, Robert Meisenholder Dec 1939

Corporations - Recapitalization By Statutory Merger And Consolidation, Robert Meisenholder

Michigan Law Review

When changes in the capital structure of a corporation are attempted by amendment or by voluntary reorganization plans, such efforts at recapitalization are often blocked by dissenting stockholders. As a result, attempts have been made to recapitalize and force dissenting stockholders to go along by following the procedure of the merger and solidation statutes. The extent to which these statutes governing merger and consolidation can be used in order to change the capital structure of a corporation will be examined here. This discussion will consider, first, the governing rules concerning possible .changes in a stockholder's interest and rights when two …

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Corporations - Modification Provisions Of Corporate Mortgages And Trust Indentures, Charles H. Haines Jr. Nov 1939

Corporations - Modification Provisions Of Corporate Mortgages And Trust Indentures, Charles H. Haines Jr.

Michigan Law Review

As early as the late 1800's it was not uncommon to find included in corporate mortgages and trust indentures provisions looking to the modification of the rights of the bondholders by action of a given majority of such holders. Ordinarily the power conferred could not be exercised by the holders of less than seventy-five per cent in value of the outstanding bonds; the modification authorized might be the alteration of security rights, the deferment of payments of interest or principal, the reduction of interest, or even the reduction of the debt. Inasmuch as the same equitable doctrines limit their use, …

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Bankruptcy - Corporate Reorganization - Section 77b - Chapter X Of The Chandler Act - Boyd Case Rule, Edmund O'Hare Nov 1939

Bankruptcy - Corporate Reorganization - Section 77b - Chapter X Of The Chandler Act - Boyd Case Rule, Edmund O'Hare

Michigan Law Review

A subsidiary of the defendant corporation filed a reorganization petition under Section 77 B of the Bankruptcy Act and defendant presented a claim of over nine million dollars as a creditor, the claim being grounded upon moneys paid by defendant to the subsidiary for its benefit, management and supervision fees, rental and interest charges, and declared but unpaid dividends. Defendant owned about ninety-eight per cent of the common stock of the subsidiary. As the result of objections by the trustee and preferred stockholders of the subsidiary, defendant's claim was compromised at five million dollars. The reorganization plan provided in part …

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Taxation-Income Tax-Dealings By Corporation In Its Own Stock, John N. Seaman Jun 1939

Taxation-Income Tax-Dealings By Corporation In Its Own Stock, John N. Seaman

Michigan Law Review

From 1921 to 1929, appellee corporation bought shares of its own stock, not for retirement, but to sustain the market, to increase the number of shareholders by resale in smaller blocks, and for other reasons. This stock was held as treasury stock. In 1929 it was sold by the corporation, at a profit. From 1920 to 1934 the Treasury Regulations exempted the proceeds of such a transaction from income tax, treating the purchase and sale as separate decrease and increase in the capital, and not as resulting in income. But in 1934 the regulation was changed, so as to tax …

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Securities Legislation - Act Of 1933 - Withdrawal Of Registration Statement, Fred C. Newman Jun 1939

Securities Legislation - Act Of 1933 - Withdrawal Of Registration Statement, Fred C. Newman

Michigan Law Review

The right to withdraw, a registration statement filed with the Securities and Exchange Commission was involved in a recent case. The plaintiff had filed a registration statement with the Securities and Exchange Commission. The statement became effective. Thereafter, the commission instituted proceedings under the stop order provision. There had been no sale of shares to which the registration statement related. After the hearings commenced, plaintiff petitioned the commission for permission to withdraw the registration statement. The commission denied the petition. Thereupon plaintiff filed a bill in equity, praying that the commission be required to permit plaintiff to withdraw its registration …

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Corporations - Restraints On Alienation Of Stock Stipulated In The Charter, Michigan Law Review May 1939

Corporations - Restraints On Alienation Of Stock Stipulated In The Charter, Michigan Law Review

Michigan Law Review

The charter of the defendant corporation provided that the board of directors had authority to purchase its common stock at any time when the holder thereof was not an employee, or the holder had not received his common stock by conversion of the preferred. In accordance with the authority granted by this provision, the directors of the defendant corporation adopted a resolution to purchase the common stock owned by the plaintiff, who was not an employee and had not received his common stock by conversion of preferred shares. Plaintiff asked that an injunction be issued restraining defendant from proceeding further. …

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Securities Legislation - Public Utility Holding Company Act Of 1935 - Extension Of Maturity Date As New "Issue", Edmund O'Hare May 1939

Securities Legislation - Public Utility Holding Company Act Of 1935 - Extension Of Maturity Date As New "Issue", Edmund O'Hare

Michigan Law Review

Defendant a public utility holding company, wished to obtain a one year extension of the maturity date of its unsecured "5 1/2 % Convertible Investment Certificates" by inducing the holders thereof to assent to such extension in return for a twenty per cent payment of the principal of each certificate. The Securities and Exchange Commission sued to enjoin defendant from using the mails or other instrumentalities of interstate commerce in carrying out its plan, because defendant had not filed a declaration under section 7 of the Public Utilities Holding Company Act of 1935, in connection with the proposed extension. Held …

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Corporations - Right Of The Registrant To Withdraw A Registration Statement Under The Securities Act Of 1933, Arthur A. Greene Jr. Apr 1939

Corporations - Right Of The Registrant To Withdraw A Registration Statement Under The Securities Act Of 1933, Arthur A. Greene Jr.

Michigan Law Review

One day after the registration statement filed by the corporation became effective, the Securities and Exchange Commission ordered a hearing to determine whether or not a stop order should be issued to suspend the effectiveness of the registration statement. Various issues of the same stock which registrant proposed to issue had been sold on the market, prior to the filing of the registration statement. During the hearings the corporation filed a motion to withdraw its registration statement. The motion was denied. The Securities and Exchange Commission applied to the district court for an order to compel obedience to its subpoena …

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Corporations - Stockholders' Suits - Federal Courts -Requirement Of Stock Ownership At The Time Of The Injury Complained Of, Robert E. Sipes Mar 1939

Corporations - Stockholders' Suits - Federal Courts -Requirement Of Stock Ownership At The Time Of The Injury Complained Of, Robert E. Sipes

Michigan Law Review

When necessary to protect the interest of a stockholder, a court of equity will entertain an action by the stockholder to enforce a right belonging to the corporation. The suit is a derivative one, the corporation being the party primarily injured and the immediate beneficiary of the proceeds of any judgment. The basis for the suit has been explained in a number of ways. It has been held that in a proper case equity will disregard the corporate fiction and allow the derivative suit in order to protect the right which beneficially belongs to the stockholder although nominally to the …

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