Zetlin v. Hanson Holdings, Inc. case brief

Zetlin v. Hanson Holdings, Inc. case brief summary
397 N.E.2d 387 (N.Y. 1979)

CASE SYNOPSIS

Appellant minority shareholder challenged an order of the Appellate Division of the Supreme Court in the First Judicial Department (New York), which affirmed partial summary judgment to respondent corporation in appellant minority shareholder's action contending that minority stockholders were entitled to share equally any premium paid for controlling shares.

CASE FACTS
Appellant minority shareholder filed suit against defendant corporation and others contending that minority stockholders were entitled to an opportunity to share equally in any premium paid for a controlling interest in the corporation. The trial court granted defendant corporation's motion for partial summary judgment, and appellant minority shareholder sought review.

DISCUSSION

• The court on appeal affirmed, and appellant minority shareholder challenged the ruling. 
• The reviewing court determined that adoption of such a rule would profoundly affect the manner in which controlling stock interests were transferred. 
• It would require, essentially, that a controlling interest be transferred only by means of an offer to all stockholders, i.e., a tender offer. 
• The court held that such a rule would be contrary to existing law and concluded that if so radical a change was to be effected it would best be done by the legislature.

CONCLUSION
Partial summary judgment for respondent corporation and others was affirmed because appellant minority shareholder proposed adoption of a rule requiring a tender offer for the sale of controlling shares, that would be such a radical change, it would be best done by the legislature.

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