Friday, November 22, 2013

Wilderman v. Wilderman case brief

Wilderman v. Wilderman case brief summary
315 A.2d 610 (1974)

Plaintiff stockholder sought a ruling to the effect that defendant, the president of the corporate defendant and the stockholder's former husband, caused excessive and unauthorized payments to be made to himself out of earnings of the corporate defendant and that such payments, made in the form of unearned and unauthorized salary and bonuses, had to accordingly be returned to the treasury of the corporation.

Following the breakup of the parties' home, the stockholder was largely excluded from the benefits enuring to the president as a result of the large amounts he proceeded to pay himself.


  • The court held that the stockholder/board member's letter concerning the president/board member's compensation served to revoke board authorization for the continuing payment to him of compensation on the basis previously recognized. 
  • The president did not discharge his burden to show the reasonableness of the amounts he had drawn for all of the years in question. 
  • The court concluded from a consideration of the facts and circumstances surrounding the president's services to the corporation that compensation in excess of the compensation suggested by the financial analyst who testified at trial would be reasonable but that such compensation should be within the limits considered appropriate by the Internal Revenue Service. 
  • The president's counterclaims, which had to do with the division of former marital property, would either be dismissed or transferred to a court of appropriate jurisdiction as provided for under the provisions of Del. Code Ann. tit. 10, § 1901.

The president was ordered to return excess compensation to the corporate treasury with interest and to repay the corporation excessive payments to the pension fund in the same ratio as the refunds of his excessive compensation.

Recommended Supplements for Corporations and Business Associations Law

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