SINCLAIR OIL CORPORATION V. LEVIEN
280 A.2d 717 (1971)
NATURE OF THE CASE: This is an appeal by Sinclair Oil Corp. (D) from an order of the lower court in a derivative action requiring D to account for damages sustained by its subsidiary, Sinclair Venezuelan Oil Co (Sinven)., as a result of dividends paid by Sinven, the denial to Sinven of industrial development, and a breach of contract between D's wholly owned subsidiary Sinclair International Oil Co and Sinven. Levien (P), a stockholder in a subsidiary corporation owned by Sinclair (D), obtained an order requiring D to account for excessive dividends and a breach of contract.
FACTS: D was in the business of exploring for oil and of producing and marketing crude oil and oil products. At all times relevant here it owned 97% of Sinven's stock. P owns about 3000 of 120,000 publicly held shares of Sinven. Sinven is engaged in petroleum operations primarily in Venezuela and since 1959 has operated primarily in Venezuela. D nominates all members of Sinven's board of directors. Almost all directors were officers, directors, or employees of corporation's Sinclair complex. From 1960 through 1966, Sinven paid out $108,000,000 in dividends. From 1960 to 1966, D purchased or developed oil fields in Alaska, Canada and other places. P argues that all of these opportunities could have been taken by Sinven. The last claim that P put forth arises from an alleged breach of contract. In 1961, D created Sinclair International Oil Co. (International), a wholly owned subsidiary used for the purpose of coordinating all of D's foreign operations. All crude purchases by D were made thereafter by International. On September 28, 1961, D used Sinven to contract with International whereby Sinven agreed to sell all of its crude oil and refined products of International at specified prices. The contract provided for minimum and maximum quantities and prices. P contends that D caused this contract to be breached in two respects. Although the contract called for payment on receipt, International's payments lagged as much as 30 days after receipt. In addition, the contract required International to purchase a fixed minimum amount of crude and refined products from Sinven. International did not comply with these requirements.
ISSUE:
RULE OF LAW:
HOLDING AND
DECISION:
LEGAL ANALYSIS:
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