Ringling Bros.-Barnum & Bailey Combined Shows v. Ringling case brief
Ringling Bros.-Barnum & Bailey Combined Shows v. Ringling case
53 A.2d 441 (Del. Sup. Ct. 1947)
Appellants challenged a judgment of the
Delaware Court of Chancery for New Castle County, which found in
favor of appellee in her suit to enforce the terms of a shareholders'
agreement purported to bind one appellant's voting rights.
CASE FACTS Appellee and individual appellant
entered into agreement regarding their voting rights and duties with
regard to shares in corporate appellant. After a dispute at a
corporate meeting over an election of directors, appellee sued,
arguing the agreement had required individual appellant to either
vote for an adjournment of the meeting or for a particular slate of
directors. Individual appellant contended the agreement was invalid.
The court first held that an arbitration provision within the
agreement gave the appointed arbitrator no substantive powers to
enforce his decision.
The court then followed the rule that a
shareholder could enter into a binding agreement with respect to the
voting rights of corporate shares.
Thus, the court held that the
agreement was binding.
However, the court refused to declare the
election invalid in order to respect the voting rights of appellant
shareholder who was not a party to the agreement, instead vacating
one director's position that had not received a majority vote.
CONCLUSION The judgment was modified, as the
agreement between the shareholding parties was binding; however,
rights of a shareholder not party to the agreement precluded
invalidating the election.
Recommended Supplements for Corporations and Business Associations Law
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