Modern general corporation acts commonly provide that a sale of all or substantially all of the assets of a corporation organized thereunder may be authorized by the affirmative vote of a specified proportion of the outstanding shares and made upon such terms as the board of directors shall deem expedient and for the best interests of the corporation. Since this sale provision usually stands apart from the dissolution or winding-up process authorized in the same acts, a legislative intent to govern all voluntary sales, not actually incident to dissolution by the terms of the statute would seem to be clear. Yet the argument has been made that, under certain circumstances, a sale of all or substantially all of the corporate assets is within the competence of the directors. A recent Michigan case, Michigan Wolverine Student Co-Operative, Inc. v. Wm. Goodyear and Co., affords an excellent opportunity to examine the argument and, it is hoped, indicate its lack of validity. Since it is not proposed to discuss what constitutes a sale of substantially all assets, the treatment will be phrased in terms of the simple-sale-of-all-assets case.
P. F. Westbrook, Jr. S.Ed.,
CORPORATIONS-SALE OF ALL OR SUBSTANTIALLY ALL OF CORPORATE ASSETS-EFFECT OF MODERN STATUTES,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol45/iss3/5