CORPORATIONS - RESTRAINTS ON ALIENATION OF STOCK STIPULATED IN THE CHARTER

Authors

Michigan Law Review, University of Michigan Law School

Abstract

The charter of the defendant corporation provided that the board of directors had authority to purchase its common stock at any time when the holder thereof was not an employee, or the holder had not received his common stock by conversion of the preferred. In accordance with the authority granted by this provision, the directors of the defendant corporation adopted a resolution to purchase the common stock owned by the plaintiff, who was not an employee and had not received his common stock by conversion of preferred shares. Plaintiff asked that an injunction be issued restraining defendant from proceeding further. Defendant demurred. Held, demurrer overruled on the ground that the restraint was unreasonable and void, unless the defendant could show, on further proceedings, that the restraint was necessary for the successful operation of its business. Greene v. E. H. Rollins & Sons, Inc., (Del. Ch. 1938) 2 A. (2d) 249.

Recommended Citation

Michigan Law Review, CORPORATIONS - RESTRAINTS ON ALIENATION OF STOCK STIPULATED IN THE CHARTER, 37 Mich. L. Rev. 1140 (1939).
Available at: https://repository.law.umich.edu/mlr/vol37/iss7/18