Sunday, November 24, 2013

Concord Auto Auction, Inc. v. Rustin case brief

Concord Auto Auction, Inc. v. Rustin case brief summary
627 F. Supp 1526 (1986)


CASE SYNOPSIS
Plaintiff close corporations filed an action for the specific performance of a stock purchase and restriction agreement against defendant administrator and contended that the administrator failed to effect the repurchase of the deceased's stock holdings as provided by the agreement.

CASE FACTS
The corporate bylaws called for an annual meeting at which a revaluation of share price was to be conducted. The shareholders signed a repurchase agreement providing that upon the death of a shareholder the shares held by him or her would be tendered to the corporations for repurchase. The administrator contended that because the corporations failed to hold the annual meeting, the court should intercede to set the share price.

DISCUSSION

  • The court granted summary judgment in favor of the corporations and dismissed the administrator's counterclaims. 
  • The court found that neither the remaining shareholders nor the corporations had a duty to call the annual meeting and that they could not be held responsible for breaching a duty that did not exist. 
  • The court found no evidence of willfulness intent to deceive, or knowing manipulation on the part of the corporations or remaining shareholders. 
  • The court found that the share prices had been carefully set, were fair when they were established, and that they were evidenced by an agreement that bound all parties equally to the same terms. 
  • The court held that the administrator was obligated to tender the decedent's shares for repurchase.

CONCLUSION
The court entered judgment as a matter of law in favor of the corporations and ordered that the repurchase agreement be specifically enforced. The court dismissed the administrator's counterclaims.


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