Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PipesRUs was a family-operated close corporation that sold plumbing supplies in New York. The founder and president, Paul Carter, transferred his shares in the corporation

PipesRUs was a family-operated close corporation that sold plumbing supplies in New York. The founder and president, Paul Carter, transferred his shares in the corporation to other family members; and when Carter died in 1984, the position of president passed to his son, Jimmy Carter. Jimmy held a one-third interest in the company, and the remainder was divided among Paul's other children and grandchildren. All shareholders participated in the corporation as employees or officers and thus relied on salaries and bonuses, rather than dividends, for distribution of the corporation's earnings. In 1986, several of the family-member employees requested a salary increase from Jimmy, who claimed that company earnings were not sufficient to warrant any employee salary increases. Shortly thereafter, a shareholders' meeting was held (the first in the company's fifty-year history), and Jimmy was removed from his position as president and denied the right to participate in any way in the corporation. Jimmy sued to have the company dissolved because he had been frozen out. Discuss whether Jimmy should succeed in his suit or whether the court would choose another alternative.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Law And Society

Authors: Matthew Lippman

3rd Edition

1544392583, 978-1544392585

More Books

Students also viewed these Law questions

Question

Conduct an effective performance feedback session. page 376

Answered: 1 week ago