Sunday, November 24, 2013

Centaur Partners, IV v. National Intergroup, Inc. case brief

Centaur Partners, IV v. National Intergroup, Inc. case brief summary
582 A.2d 923 (1990)


CASE SYNOPSIS
Appellant stockholders challenged a judgment from the Court of Chancery (Delaware), which granted appellee corporation's motion for summary judgment and declared that the corporation's board of directors could not be enlarged without an 80 percent supermajority stockholder vote. The court denied the stockholders' motion for summary judgment.

CASE FACTS
The stockholders sought to enlarge the corporation's board of directors by amending the corporation's by-laws. The stockholders brought a declaratory action to resolve whether the amendment would require the consent of the majority, or an 80 percent supermajority. Both parties filed motions for summary judgment and the trial court granted the corporation's motion.

DISCUSSION

  • The stockholders sought review and the court affirmed. 
  • The court noted that, in order to abrogate the rule of simple plurality control, the charter and by-law provisions were required to be clear and unambiguous. 
  • The court reasoned that the corporation's by-laws unambiguously required that an 80 percent supermajority was required to amend or repeal any provision inconsistent with the portions of the by-laws that dealt with the election of directors. 
  • The court held that the stockholders intended that the provisions dealing with the election of directors to be complementary. 
  • Finally, the court determined that the stockholders' proposed amendment would be a nullity because it conflicted with the provisions of the corporation's charter.

CONCLUSION
The court affirmed the trial court's decision to grant the corporation's motion for summary judgment in the stockholders' declaratory action to determine what percentage of the stockholders must consent to enlarge the corporation's board of directors.

Recommended Supplements for Corporations and Business Associations Law

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