Sunday, November 24, 2013

Sinclair Oil Corp. v. Levien case brief

Sinclair Oil Corp. v. Levien case brief summary
280 A.2d 717 (Del. 1971)


CASE SYNOPSIS
Plaintiff, a stockholder in a subsidiary corporation owned by defendant, obtained an order in the Court of Chancery in and for New Castle County (Delaware) requiring defendant to account for excessive dividends and a breach of contract.

CASE FACTS
Plaintiff, stockholder of a subsidiary corporation, brought a derivative action against the parent corporation for an accounting of excessive dividends and a breach of contract between two subsidiaries. The court granted the order to plaintiff.

DISCUSSION

  • The supreme court reversed the order as to dividends because the dividends were paid fairly to all stockholders, and it affirmed the order as to breach of contract because the intrinsic fairness standard applies to dealings between subsidiaries.

CONCLUSION
The Supreme Court of Delaware reversed the order as to dividends because the dividends were paid fairly to all stockholders, and it affirmed the order as to breach of contract because the intrinsic fairness standard applies to dealings between subsidiaries.


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