(Download) "Merle Thorpe v. Cerbco" by Supreme Court of Delaware ~ eBook PDF Kindle ePub Free
eBook details
- Title: Merle Thorpe v. Cerbco
- Author : Supreme Court of Delaware
- Release Date : January 10, 1996
- Genre: Law,Books,Professional & Technical,
- Pages : * pages
- Size : 64 KB
Description
WALSH, Justice: In this appeal from the Court of Chancery we address the duties owed to a corporation by controlling shareholders who are also directors. The shareholder-plaintiff in this derivative suit, Merle Thorpe, 1 (""Thorpe"") alleged that the controlling shareholders of CERBCO, Inc. had usurped an opportunity which belonged to the corporation. That opportunity was the potential sale of control of one of CERBCO's subsidiaries. The Chancellor held that the defendants, George and Robert Erikson (""the Eriksons""), who were directors, officers and controlling shareholders of CERBCO, breached their duty of loyalty by failing to make complete disclosure to CERBCO of this corporate opportunity and by not removing themselves from consideration of the matter. The court concluded however that, as controlling shareholders, the Eriksons had the right under 8 Del.C. § 271 to veto any transaction which CERBCO would have entered into which constituted the sale of all or substantially all of the assets of the corporation. Thus, according to the Chancellor, the Eriksons' conduct caused no injury to CERBCO.