Sunday, November 24, 2013

Farris v. Glen Alden Corporation case brief

Farris v. Glen Alden Corporation case brief summary
143 A.2d 25 (Pa. 1958)


CASE SYNOPSIS
Defendant corporation challenged the decree of the Court of Common Pleas of Luzerne County (Pennsylvania) that denied its motion for judgment on the pleadings on plaintiff's claims brought under § 908A of the Pennsylvania Business Corporation Law.

CASE FACTS
Plaintiff filed a complaint in equity against defendant corporation seeking to prevent the execution of a reorganization agreement. The basis of plaintiff's complaint was that the reorganization agreement was actually a merger between defendant corporation and another company and that proper notice was not given to the shareholders of their right to dissent and claim fair value for their shares. Defendant corporation contended that the agreement was a purchase of corporate assets of which shareholders had no right of dissent or appraisal.

DISCUSSION

  • On appeal, the court determined that the nature of the agreement proposed a merger because it fundamentally changed the character of defendant corporation and the interest of the plaintiff as a shareholder therein. 
  • Since plaintiff would be forced to give up his stock in one company and accept that of another, he should have been notified.

CONCLUSION
The court affirmed the decree denying the motion for judgment on the pleadings because the agreement proposed a merger and thus was within the provisions of the Pennsylvania Business Corporation Law.


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