293 F. 811 | D. Mass. | 1923
The Waltham Watch Company in 1922 was confronted with a financial condition which appeared to many of its stockholders as “serious.” Some of the larger stockholders brought about the organization of two stockholders’ committees, one known as the “common stockholders’ protective committee,” and the other as the' “preferred stockholders’ protective committee.” On each of these committees was a stockholder, who was also a director of the corporation. Cdmmunications addressed to stockholders were sent out by these committees. It is alleged, and I assume, that they went out from the office of the corporation. In substance, these communications brought to the attention of the stockholders the financial condition of the corporation and suggested the advisability of depositing certificates representing shares with the American Trust Company and giving to the respective committees voting power respecting said shares. A very substantial majority in number and amount of shares of both classes were deposited with the trust company. A plan of reorganization was worked out, which involved the sale of all the assets of the existing corporation to a new corporation to be organized. A stockholders’ meeting was called for the purpose of taking action with reference to such sale, notice of which was sent to all the stockholders with a request for proxies. A number of stockholders who had not deposited their shares returned to the committees proxies.
The plaintiff owns shares of both classes of stock in the corporation. She had not deposited her shares with the American Trust Company, nor had she given to the committees proxies, and, so far as appears, she was in full possession of all her rights as stockholder to attend said meeting and vote against said sale and exercise her rights as minority stockholder in the event a sale was authorized. Nevertheless, she brings 'this bill in equity against the corporation and its board of directors and the individual stockholders composing the committees, and thereby seeks to enjoin the respondents from conveying, or aiding or abetting any
The bill of complaint is devoted mainly to a recital of facts tending to show that the plan evolved by the committees is not favorable to stockholders; or that a plan can be evolved which would be more advantageous.
To this bill of complaint the respondents demur on three grounds:
(1) That the allegations in the bill of complaint do not entitle the plaintiff to relief in equity.
(2) That the plaintiff has a plain, adequate, and complete remedy at law.
(3) That the plaintiff’s rights are defined and established by the laws and statutes of the commonwealth of Massachusetts, and that the rights so established and defined are exclusive and preclude this court from granting the relief prayed for in the bill of complaint.
"A stockholder in any corporation which shall hare duly voted to sell, lease or exchange all its i>roperty and assets or to change the nature of its business in accordance with section forty-two, who, at the meeting of stockholders, has voted against such action may, within thirty days after the date of said meeting, make a written demand upon the corporation for payment for his stock. If the corporation and the stockholder cannot agree upon the value of the stoek at the date of such sale, lease, exchange or change, such value shall be ascertained by three disinterested persons, one of whom shall be named by Ihe stockholder, another by the corporation and the third by the two thus chosen. The finding of the appraisers shall be final, and if their award is not paid by the corporation within thirty days after it is made, it may be recovered in contract by the stockholder from the corporation. Upon payment by the corporation to the stockholder of the agreed or awarded price of his stock, the stockholders shall forthwith transfer and assign the stock certificates held by him at, and in accordance with, the request of the corporation.”
Thus we see that the rights of the plaintiff as a minority stockholder are governed by the laws of Massachusetts, which undertake to protect such minority stockholder in a case where holders of two-thirds of
The plaintiff, therefore, in my opinion, has a plain, adequate, and complete remedy at law by reason of these statutory provisions. Scott v. Neely, 140 U. S. 106, 11 Sup. Ct. 712, 35 L. Ed. 358.
The demurrer, therefore, should be sustained, and the bill dismissed, and decree may be entered accordingly.
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