Sunday, November 24, 2013

Coggins v. New England Patriots Football Club, Inc. case brief

Coggins v. New England Patriots Football Club, Inc. case brief summary
492 N.E.2d 1112 (Mass. 1986)


CASE SYNOPSIS
Plaintiff representing minority shareholders in a class action appealed from a dismissal of plaintiff's claim for waste of corporate assets and a decision of the Middlesex Superior Court (Massachusetts) that a freeze-out merger should not be undone.

CASE FACTS
Plaintiff representing minority shareholders brought a class action on behalf of himself and certain other stockholders of defendant corporation, following a freeze-out merger by the majority stockholder. The freeze-out was designed for the majority shareholder's own personal benefit to eliminate the interests of the minority stockholders and did not further the interests of the corporation.

DISCUSSION

  • The merger was a violation of fiduciary duty to minority stockholders, and therefore impermissible. 
  • Although rescission is the normal remedy, the court determined it would be inequitable and remanded for a determination of the present value of the nonvoting stock, as though the merger were rescinded. 
  • Those plaintiffs who did not turn in their shares and did not perfect their appraisal rights were entitled to receive damages in the amount their stock would be currently worth, plus interest at the statutory rate. 
  • Plaintiffs from a related federal court action were not permitted to intervene.

CONCLUSION
The case was remanded for further proceedings to determine damages in the amount of the present value of the nonvoting stock, as though the merger were rescinded. The claim for waste of corporate assets brought against individual defendants was reinstated.

Recommended Supplements for Corporations and Business Associations Law

No comments:

Post a Comment

Search Thousands of Case Briefs and Articles.