Friday, February 15, 2013

State ex rel. Pillsbury v. Honeywell, Inc. case brief

State ex rel. Pillsbury v. Honeywell, Inc. case brief summary
291 Minn. 322

SYNOPSIS: Appeal from Hennepin County District Court (Minnesota), which denied petitioner's writ of mandamus to compel respondent to turn over its shareholder ledgers and corporate records so petitioner could inspect them.

-Petitioner appealed trial court's decision denying petitioner's writ of mandamus to compel respondent to produce its shareholder ledgers and all corporate records. 
-Petitioner was opposed to respondent's participation in Vietnam war effort and eventually bought one share of respondent's stock for purpose of voicing his concerns to respondent's shareholders. 
-Petitioner sought shareholder ledgers in order to find the identity of shareholders so he could speak to them about respondent's participation in the war. 

-Court affirmed and held respondent's purpose was improper to obtain an inspection of respondent's records. 

-Law required petitioner to have proper purpose in seeking inspection of corporate records. 
-Mere desire to communicate with other shareholders was not proper because it gave an almost absolute right to compel inspection. 
-Furthermore, petitioner's status as a stockholder was shaky. 
-He had only one definitive share, purchased for the purpose of the present suit.

-Proper purposes for inspection of records include determining the financial condition of the corporation, ascertaining the value of the petitioner’s shares, and to obtain a mailing list for the solicitation of proxies from shareholders.

OUTCOME: Court affirmed lower court's decision, finding petitioner's writ of mandamus was properly denied because petitioner's desire to communicate his displeasure with respondent's participation in Vietnam to respondent's shareholders was not a proper purpose for seeking inspection of respondent's records.

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