Sunday, November 24, 2013

Ringling Bros.-Barnum & Bailey Combined Shows v. Ringling case brief

Ringling Bros.-Barnum & Bailey Combined Shows v. Ringling case brief summary
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.

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.

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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