FLIEGLER V. LAWRENCE
361 A.2d 218 (Del.1976)
NATURE OF THE CASE: This was a shareholder derivative action for wrongful usurpation of a corporate opportunity. Fliegler (P) appealed an order of the Court of Chancery, which held that Lawrence (Ds) did not wrongfully usurp an opportunity that belonged to the corporation and that Ds did not wrongfully profit by causing the corporation to exercise an option to purchase a close corporation, the majority of whose shares were held by Ds.
FACTS: Lawrence (D), president of Agau, a publicly traded corporation engaged in gold and silver exploration, acquired certain properties in 1969 under a lease option for $60,000. D offered to transfer the properties to Agau but after discussions it was agreed by Agau that its legal and financial position would not allow its acquisition and development of the properties. It was thus decided to transfer the properties to USAC, a closely held corporation formed just for the purpose. The majority of stock in USAC was owed by the individual Ds. It was reasoned that the opportunity could be had by raising money from the sale of USAC stock but it was also decided to grant Agau a long term option to acquire USAC if the properties proved to be of commercial value. In January, 1970, the option agreement was exercised by Agau. P sued on behalf of Agau to recover the 800,000 shares given to USAC for the option and for an accounting.
ISSUE:
RULE OF LAW:
HOLDING AND
DECISION:
LEGAL ANALYSIS:
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