Plaintiffs, minority stockholders of defendant corporation, brought an equitable action against certain directors thereof alleging the following wrongs: profits made by purchasing the corporation's notes at a discount; carrying out a plan to gain stock control; settlement of anti-trust suits out of court; excessive compensation of directors under management contracts alleged to violate anti-trust laws; paying excessive film rentals to another corporation. Plaintiffs unsuccessfully demanded that the board bring action against the directors on these grounds and then make a like demand at a stockholders' meeting. The stockholders voted not to sue, approved all actions alleged to be wrongs and instructed the board to reconsider the legality of the management contracts. The bill was dismissed by the Superior Court. On appeal, held, affirmed. The corporation's refusal, pursuant to a vote of a disinterested majority of stockholders, acting reasonably and in good faith, was valid and precluded the instant suit. S. Solomont & Sons Trust, Inc. v. New England Theatres Operating Corporation, (Mass. 1950) 93 N.E. (2d) 241.
CORPORATIONS--STOCKHOLDERS' RIGHTS--MAJORITY DISCRETION AS BAR TO DERIVATIVE SUIT,
Mich. L. Rev.
Available at: https://repository.law.umich.edu/mlr/vol49/iss6/10