DONAHUE V. RODD ELECTROTYPE CO.
367 Mass. 578, 328 N.E.2d 505 (1975)
NATURE OF THE CASE: E. Donahue (P), a minority shareholder in the D company brings this
suit against the directors of Rodd Electrotype Co., Harry Rodd, a former director, officer
and controlling stockholder of Rodd Electrotype Co. and against Rodd Electrotype. P seeks to
rescind Rodd Ds' purchase of Harry Rodd's shares and to compel Harry Rodd to repay to the
corporation the purchase price in the amount of $36,000, together with interest from the
date of purchase.
FACTS: Harry Rodd and Joseph Danahue were employed by Royal Electrotype (the predecessor
of Rodd Electrotype). Soon Rodd became general manager and acquired 200 shares and Donahue
acquired 50. Later Rodd and Donahue became sole shareholders owning 80% and 20%
respectively. Rodd had distributed 117 out of 200 shares among his children and returned 2
to the corporate treasury. Then he insisted that some arrangement be made regarding his 81
shares. His son, Charles, a president of the corporation, negotiated a purchase of 45 shares
at $800 a share. The board subsequently voted for the purchase. Harry sold two shares to
each of his three children at $800/share and gave each 10 shares as a gift. Donahue's 50
shares passed to his wife and son. When P learned of the transaction, she offered her shares
on the same terms but the offer was rejected. This suit followed. The trial judge dismissed
P's bill on the merits. The appeals Court affirmed with costs. The case is before this court
on the P's application for further review.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
Get
free access to the entire content for Mac, PC or Online
for 2-3 days and free samples
of all kinds of products.
for 2-3 days and free samples of all kinds of products.
https://bsmsphd.com
© 2007-2016 Abn Study Partner
No comments:
Post a Comment