Question
You form a corporation with two other investors. Keneisha is putting up 60% of the initial investment for the new corporation, while Terry and you
You form a corporation with two other investors. Keneisha is putting up 60% of the initial investment for the new corporation, while Terry and you are each putting up 20%. When you form the bylaws for the corporate charter, it is agreed that Keneisha will choose six of the 10 members of the board of directors, Terry will choose two, and you will choose two, so your influence on the board is directly proportional to each of your investments. Per the bylaws, the board of directors has the authority to select and hire the CEO of the corporation, and the board chooses a CEO that all three of you are happy with. But then over the holidays, Keneisha goes on vacation, as do four board members. Terry and you recommend to the remaining six members of the board that they fire the CEO. The six members vote to fire the CEO and appoint Terry's brother-in-law as the new CEO. Upon learning of the change, Keneisha is furious that the CEO was fired without consulting her, especially since she owns 60% of the company stock. She is determined to regain control, even if it means going to court. Do you think she would prevail in court?
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