STRINGER V. CAR DATA SYSTEMS, INC. , 814 P.2d 1183 (1992) CASE BRIEF

STRINGER V. CAR DATA SYSTEMS, INC

814 P.2d 1183 (1992)

NATURE OF THE CASE: This case involves what is known as a cash out or freeze out merger. This means that the majority shareholders can eliminate the interest of minority shareholders even if the minority shareholders vote against it. The case involves the extent of the remedy for minority shareholders who have been 'cashed out'.

FACTS: Stringer (P) and Schubert (P) are minority shareholders of Consumer Data Systems (CDS) (D). The directors of CDS transferred all their shares from CDS to a new corporation, Car Data. Each CDS shareholder would receive $0.002 per share, but Ps claim that their shares were worth at least $0.10 per share. The merger was approved over the objection of Ps. Ps demanded the $0.10 per share and CDS rejected this. Ps claimed that the majority shareholders of CDS breached their fiduciary duties to Ps by offering so low a price for P's shares. Ps demand a rescission of the merger or compensatory and punitive damages. Ps herein never alleged fraud or misleading statements against CDS.

ISSUE:

RULE OF LAW:

HOLDING AND DECISION:

LEGAL ANALYSIS:

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