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284:, Del. Supr., 222 A.2d 800 (1966). Thus, each of the significant characteristics of the Class B Common Stock is in principle a valid power or limitation of common stock. The primary inquiry therefore is whether the Arden shareholders have effectively exercised their will to amend the Company's restated certificate of incorporation so as to authorize the implementation of the dual class common stock structure. The charge is that they have not done so -- despite the report of the
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chorus to strut its moment upon center stage where corporate drama is acted out.' He noted that Mr
Briskin's tenure had been 'active and effective' because though no dividends had been paid since 1970 the stock price had risen steadily from $ 1 to $ 25 per share. The motivation to 'protect his power
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showed the only reason for the plan was
Briskin demanded it. He said 'coercion' is not a meaningful word in itself, because it matters why particular behaviour counts as coercion. And here, Briskin was using his influence as a director, not merely giving advice as another shareholder. He breach his
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to control Arden's business future... while it may be suspect - since it may reflect not a desire to protect business policy and capabilities for the benefit of the corporation and its shareholders but rather a wish simply to retain the benefits of office - does not itself constitute a wrong' (
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fatally flawed by the implied (indeed, the expressed) threats that unless the proposed amendments were authorized, he would oppose transactions "which could be determined by the Board of
Directors to be in the best interests of all of the shareholders". As a corporate
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that the proposed amendments carried -- in part because the proxy statement upon which the vote was solicited was materially misleading and in part because the entire plan to put in place the Class B stock constitutes a breach of duty on the part of a dominated
278:, Del. Ch., 2 A.2d 114 (1938); restriction on transfers are possible, 8 Del.C. § 202, and charter provisions requiring the filling of certain directorates by a class of stock are, if otherwise properly adopted, valid.
183:, arguing it was merely a device to transfer control to Mr Briskin, because only Mr Briskin would be likely to take up the offer. 64% of votes were in favour, 14% were against from common stock and 74% in favour of
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272:, Del. Supr., 378 A.2d 121 (1977). Differing classes of stock with differing voting rights are permissible under our law, 8 Del. C. § 151(a);
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A new class B with ten votes per share, entitled to elect 75% of the Arden board was proposed by the major
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Chancellor Allen held that the amendments were voidable because (1) Briskin had threatened to block
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JH Choper, JC Coffee and RJ Gilson, Cases and
Materials on Corporations (6th edn Aspen 2004) 590
220:(1939)). Although Briskin could have been acting selfishly or selflessly, the vote was still...
229:, Mr. Briskin has no right to take such a position, even if benevolently motivated in doing so.
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239:, 87 NJ Eq 234, 100 A 347 (NJ Ch 1917) 'although it is one that thanks to its potential as an
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that were in the company's interests if the plan was not passed which could dilute his
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Our corporation law provides great flexibility to shareholders in creating the
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rights and limits on transfers. All Arden shareholders could exchange their
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Chancellor Allen noted that the dual class creation was not a novel idea,
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duty to act with 'complete loyalty to the interests of the
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device, has recently emerged from the reaches of the
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for the new class B shares. Lacos Land Co sought an
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187:, half of which was on direction by management.
56:but its sources remain unclear because it lacks
236:General Investment Co v Bethlehem Steel Corp
87:Learn how and when to remove this message
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269:Providence and Worcester Co. v. Baker
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139:, 517 A 2d 271 (Del Ch 1986) is a
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335:United States corporate case law
151:in pursuing charter amendments.
136:Lacos Land Co v Arden Group, Inc
102:Lacos Land Co v Arden Group, Inc
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18:Lacos Land Co v Arden Group, Inc
275:Topkis v. Delaware Hardware Co.
330:1986 in United States case law
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254:(1985) and
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258:(1977)).
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294:See also
203:(2) the
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173:dividend
123:Keywords
115:Citation
77:May 2010
65:improve
289:board.
256:Kaplan
251:Unocal
306:Notes
155:Facts
147:by a
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163:and
165:CEO
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