CORPORATIONS-RIGHT OF OFFICERS TO PURCHASE CLAIMS AGAINST THE CORPORATION AND ENFORCE THEM AT THEIR FACE VALUE

Authors

Abstract

Defendant was enlisted by one of the insolvent corporation's creditors, a holder of preferred stocks and debentures, to buy up landlord's claims against the corporation. These claims were large in number and amounts and were crucial elements in a successful reorganization. By means of the stock vote of the creditor, defendant was elected director of the corporation and remained as such for one month, though during this time he was not active in acquiring landlord's claims. Upon resignation as director, defendant was successful in buying up most of the landlord's claims, it being a fair inference from the facts that information he acquired while director was of value to him in acquiring the claims. Held, that landlord's claims so acquired by defendant may be enforced for no more than he paid the landlord for them plus reasonable expenses. In re McCrory Store Corp., (D. C. N. Y. 1935) 12 F. Supp. 267.

Recommended Citation

CORPORATIONS-RIGHT OF OFFICERS TO PURCHASE CLAIMS AGAINST THE CORPORATION AND ENFORCE THEM AT THEIR FACE VALUE, 34 Mich. L. Rev. 1245 (1936).
Available at: https://repository.law.umich.edu/mlr/vol34/iss8/23