Friday, November 22, 2013

Toms v. Cooperative Management Corporation case brief

Toms v. Cooperative Management Corporation case brief summary
741 So. 2d 164 (1999)


CASE SYNOPSIS
Defendant appealed a judgment from the First Judicial District Court for the Parish of Caddo, Louisiana, which granted plaintiff minority stockholders a writ of mandamus preventing the issuance of stock to defendant because the issuance was in violation of a corporation's by-laws.

CASE FACTS
A corporation was prevented from issuing stock to defendant because the issuance violated the by-laws of the corporation. Defendant had sued the corporation to rescind a redemption of stock because defendant learned that she had received significantly less than the true value. The corporation agreed to issue new stock to defendant for the value that defendant had received on redemption. Plaintiff minority stockholders challenged the issuance of stock to defendant because the by-laws required an approval of the shareholders owing eighty-five percent of the stock in the corporation.

DISCUSSION

  • The court affirmed the writ of mandamus to prevent the issuance of stock. 
  • Defendant was not entitled to the issuance because the corporation was required to follow the by-laws.

CONCLUSION
The court affirmed the grant of a writ of mandamus, as requested by plaintiff minority stockholders, which prevented the issuance of stock to defendant because the issuance violated the by-laws of a corporation. According to the by-laws, the issuance of stock to defendant was required to have approval of the shareholders owning eighty-five percent of the stock in the corporation.

Recommended Supplements for Corporations and Business Associations Law

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