The holders of a minority of the preferred stock of a foundry company petitioned for receivership and repayment of part of the dividends which had been paid to common stockholders, contending that after payment of the stipulated 6 per cent dividend on the preferred stock and a like percentage on the common stock, preferred and common stockholders should participate alike in all further dividends declared. There was no provision in the articles or by-laws of the corporation concerning such participation in dividends. Held, that in the absence of express provision, preferred stockholders are entitled to receive only their guaranteed dividend and any arrears due under cumulative terms, since that is the ordinary commercial understanding with respect to preferred stock, and since the articles expressly state that upon dissolution, preferred stockholders participate in the assets only to the extent of the par value of their stock and any accrued dividends. James F. Powers Foundry Co. v. Miller, 166 Md. 590, 171 Atl. 842 (1934).
CORPORATIONS - RIGHT OF PREFERRED STOCKHOLDERS TO PARTICIPATE IN DIVIDENDS BEYOND SPECIFIED AMOUNT,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol33/iss6/17