Tuesday, March 24, 2009
This is a case about a family-owned close corporation. The father, Malcolm, Sr. gave a controlling share to his son, Malcolm, Jr., leaving two sisters, Candi and Ann, as minority shareholders. The siblings disagreed about the direction of the business. The main business, which involved furniture was stagnating, so the sisters wanted to expand the family's side business in trailer parks.
But Malcolm had a controlling interest, and while the sisters had the ability to voice their opinions, Malcolm never paid them any heed, and he ran the business according to his own lights. One of the disputes allegedly involved Malcolm hitting one of the sisters, but the court did not give any weight to that fact.
The sisters claimed that they were being improperly frozen out and deprived of the benefits of ownership, so they sought a court-ordered dissolution of the company. The court sided with Malcolm. The sisters still got their dividends, so their ownership interest in the company was not frustrated.
Stuparich v. Harbor Furniture
Two sisters, Candi and Ann,
Preferred trailers to chairs of rattan.
Dividends they receive
And so they must leave
It to Malcolm the business to plan.