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Wilkes V Springside Nursing Home Inc

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Citing Harrison v. 465, 477–78, 744 N. 2d 622 (2001)). 318 (1975); 21 Vill. In Brodie, Mary Brodie inherited one-third of the shares of Malden corp. from her husband, Walter. Though the board of directors had the power to dismiss any officers or employees for misconduct or neglect of duties, there was no indication in the minutes of the board of directors' meeting of February, 1967, that the failure to establish a salary for Wilkes was based on either ground. In Donahue itself, for example, the majority refused the minority an equal opportunity to sell a ratable number of shares to the corporation at the same price available to the majority. 339 (2011), available at Copyright Statement. Nursing home and were paid a salary. Wilkes v. Springside Nursing Home, Inc. Citation:353 N. E. 2d 657 (1976). 4] Dr. Pipkin transferred his interest in Springside to Connor in 1959 and is not a defendant in this action. If they can do that, then the minority shareholder must be.

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STANLEY J. WILKES vs. SPRINGSIDE NURSING HOME, INC. & Others. Wilkes consulted his attorney, who advised him that if the four men were to operate the *845 contemplated nursing home as planned, they would be partners and would be liable for any debts incurred by the partnership and by each other. A judgment was entered dismissing Wilkes's action on the merits. In light of the theory underlying this claim, we do not consider it vital to our approach to this case whether the claim is governed by partnership law or the law applicable to business corporations. Ii) In May 2007, an Access affiliate filed a Schedule 13D with the Securities and Exchange Commission disclosing its right to acquire an 8. Although this is traditionally an issue of management, the test for close corporations, should be whether the management decision that severely frustrates a minority owner has a legitimate business purpose. What these examples have in common is that, in each, the majority frustrates the minority's reasonable expectations of benefit from their ownership of shares. 23 Pages Posted: 13 Dec 2011 Last revised: 16 Dec 2011. As one authoritative source has said, "[M]any courts apparently feel that there is a legitimate sphere in which the controlling [directors or] shareholders can act in their own interest even if the minority suffers. " 1252, 1256 (1973); Comment, 1959 Duke L. 436, 448, 458; Note, 74 Harv.

Over 2 million registered users. In addition, the duties assumed by the other stockholders after Wilkes was deprived of his share of the corporate earnings appear to have changed in significant respects. On August 5, 1971, the plaintiff (Wilkes) filed a bill in equity for declaratory judgment in the Probate Court for Berkshire County, [2] naming as defendants T. Edward Quinn (Quinn), [3] Leon L. Riche (Riche), the First Agricultural National Bank of Berkshire County and Frank Sutherland MacShane as executors under the will of Lawrence R. Connor (Connor), and the Springside Nursing Home, Inc. (Springside or the corporation). 1 F. O'Neal, Close Corporations § 1. V) Smith said he would bring the offer to the board but he didn't think they would accept since they really weren't on the market. On a separate sheet of paper, match the letter of the term best described by each statement below. Part II describes the "schizoid fiduciary duties" among owners within closely held businesses, states the Wilkes test, and explains that test's genius for dealing with complex disputes among co-owners. We granted direct appellate review. The Master's report was confirmed, a judgment was entered dismissing P's action on the merits, and Massachusetts Supreme Court granted appellate review.

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Shareholders in a close corporation owe each other a duty of acting in good faith, and they are in breach of their duty when they terminate another shareholder's salaried position, when the shareholder was competent in that position, in an attempt to gain leverage against that shareholder. 1062, 1068 (N. D. Ga. 1972), aff'd, 490 F. 2d 563, 570-571 (5th Cir. 465, 471-472, 744 N. 2d 622, 629. )

In the Donahue case we recognized that one peculiar aspect of close corporations was the opportunity afforded to majority stockholders to oppress, disadvantage or "freeze out" minority stockholders. Ii) The board of directors and not the shareholders make the decisions. P had a reputation locally for profitable dealings in real estate. 42 Accor...... State Farm Mut. We summarize the undisputed material facts. Plaintiff argued that he should recover damages for breach of the alleged partnership agreement or should recover damages because defendants, as majority stockholders, breached their fiduciary duty to him, as a minority stockholder.

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353 N. E. 2d 657 (Mass. 2 The plaintiff alleged that the defendants breached their fiduciary duty of utmost good faith and loyalty; breached the implied covenant of good faith and fair dealing; wrongfully terminated his employment; and intentionally interfered with his contractual relations. Access the most important case brief elements for optimal case understanding. This issue of the Western New England Law Review documents the papers which were presented at the Symposium.

Existing shares would not be diluted, however, if NetCentric acquired outstanding shares and offered those to new employees. Wilkes, however, was left off the list of those to whom a salary was to be paid. 423 (1975); 60 Mass. In addition, the judge's findings reflect a state of affairs in which the defendants were the only ones receiving any financial benefit from the corporation. Does conduct that defeats an investors reasonable expectations constitute an illegal freezeout? Case Doctrines, Acts, Statutes, Amendments and Treatises: Identifies and Defines Legal Authority used in this case. Shareholders breached the partnership agreement, and they breached their. Her request for "financial and operational information" was refused. To what extent is this assessment accurate? That the directors failed to obtain the best available price in selling the company. Court||United States State Supreme Judicial Court of Massachusetts|. Unlike fixed legal rules – which are categorical, static, and do not take sufficient account of changes wrought by time or human arationality – equity is malleable and timely as it reckons with the flux and gray of business relationships. Rather, when challenged by a minority shareholder, the remaining shareholders must show that their actions were inspired by a legitimate business purpose and that the actions taken were narrowly tailored to minimize the harm to the minority shareholder.