CORPORATIONS-REPURCHASE OF ITS OWN SHARES BY A CORPORATION IN PERFORMANE OF A PROMISE FORMING PART OF THE CONTRACT OF SALE

Authors

Abstract

One Rosenthal entered the employ of the defendant corporation for two years at a salary of $10,000.00 per year; $75.00 per week to be paid in cash, and the balance to be paid in stock of the corporation at the end of each year. The contract contained a proviso that if the parties could not, at the end of the second year, reach an understanding for a continuation of the employment, the company would repurchase its shares at their par value. No such agreement was reached, and the company refused to take back its stock. Rosenthal brought his bill in equity to compel performance of the contract. By the Code of 1924, a corporation was given power to buy shares of its own stock. Held, Rosenthal was entitled to judgment; the contract was not ultra vires, be cause of the Code provision, and no other valid objection to its enforcement was presented. Reed & Fibre Products Corp. v. Rosenthal (Md. 1927) 138 Atl. 665.

Recommended Citation

CORPORATIONS-REPURCHASE OF ITS OWN SHARES BY A CORPORATION IN PERFORMANE OF A PROMISE FORMING PART OF THE CONTRACT OF SALE, 26 Mich. L. Rev. 790 (1928).
Available at: https://repository.law.umich.edu/mlr/vol26/iss7/5