CORPORATIONS -APPORTIONMENT OF PART PAYMENT OF PURCHASE PRICE OF STOCKS BOUGHT IN A UNIT

Authors

Abstract

The defendant corporation entered into contracts for the sale of stock in blocks of three shares, two shares of first preferred at fifty dollars each par value and one share of second preferred at fifty dollars par value, the three shares to be sold in a unit for one hundred and thirty-five dollars. The contract contained an agreement that after six monthly payments had been made on the stock, upon default of the remaining payments the corporation would issue certificates of indebtedness for the amount paid in. In the dissolution of the corporation and the distribution of the assets, the court, after holding that the contract to turn the payments on the stock into certificates of indebtedness was of no effect as to the other stockholders, being an impairment of the capital, held that in the distribution of the assets the preferred stock should be paid in full before the other stock could share, and as to the partial payments that it would consider the payments made by purchasers of blocks of stocks as being made equally on each share composing the block. Pasotti v. United States Guardian Corp. (Del. Ch. 1931) 156 Atl. 255.

Recommended Citation

CORPORATIONS -APPORTIONMENT OF PART PAYMENT OF PURCHASE PRICE OF STOCKS BOUGHT IN A UNIT, 30 Mich. L. Rev. 970 (1932).
Available at: https://repository.law.umich.edu/mlr/vol30/iss6/21