CORPORATIONS - VOTING RIGHTS - EFFECT OF SALE OF STOCK WHILE BOOKS CLOSED

Authors

Louis C. Andrews Jr., University of Michigan Law School

Abstract

In a statutory action brought by a stockholder to determine the validity of an election of directors, it appeared that proxy votes of 6,856 shares had been accepted by the inspectors although these proxies were given by former owners who had sold the shares since the giving of the proxies and during the twenty days immediately preceding the election. During that twenty-day period, stock transfers registered with the corporation would have had the effect of disfranchising the stock, but none of the 6,856 shares had been offered for registration. By using these proxy votes the shareholders opposing the management were successful in electing five directors on the board of nine. Held, the election is valid. While the right to vote is vested in the holder of the legal title, which is in the transferee, nevertheless election results will not be disturbed in the absence of a showing that the votes were cast against the wishes of the transferee, or of other inequitable circumstances. In re Giant Portland Cement Co., (Del. Ch. 1941) 21 A. (2d) 697.

Recommended Citation

Louis C. Andrews Jr., CORPORATIONS - VOTING RIGHTS - EFFECT OF SALE OF STOCK WHILE BOOKS CLOSED, 40 Mich. L. Rev. 586 (1942).
Available at: https://repository.law.umich.edu/mlr/vol40/iss4/9