Thursday, November 21, 2013

Campbell v. Loew’s, Inc. case brief

Campbell v. Loew’s, Inc. case brief summary
134 A.2d 852 (1957)

Plaintiff corporate directors sought an order enjoining defendants, corporation and rival directors, from holding a meeting or from counting proxy votes seeking to oust plaintiffs.

Plaintiffs, corporate directors, sought to enjoin defendants (corporation and rival directors) from holding a stockholders' meeting at which stockholders would be called upon to remove them. The Delaware chancery court declined to enjoin the stockholders' meeting but did preclude the corporation from counting proxy votes and from using corporate personnel and facilities to solicit proxy votes.


  • In so ruling, the court reasoned that 
  • (a) the president of the board of directors was authorized by the bylaws to call a stockholders' meeting for any reason; 
  • (b) stockholders were not restricted in when they could vote on directorships, and thus they could replace a director at any time; 
  • (c) directors could be removed for good cause, and allegations made by defendants supported the proposed removal of plaintiffs; but 
  • (d) plaintiffs had not been afforded sufficient opportunity to respond to the allegations in the proxy solicitations, and thus the votes tendered by the proxies could not be counted unless and until plaintiffs were given such an opportunity.

The injunction was denied as to the meeting itself, as the president of the board of directors was authorized by the bylaws to call a stockholders' meeting and the bylaws permit the stockholders to replace the directors for good cause; the injunction was granted as to proxy voting owing to the failure to afford plaintiffs specifics about the allegations and an opportunity to be heard.

Recommended Supplements for Corporations and Business Associations Law

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