minority shareholder rights

Minority - Dominant shareholder has more than 50 of company Courts presume dominance w 25 control Plaintiff must show dominance Then burden shifts

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Dominant shareholder has more than 50% of company. Courts presume dominance w/ 25% control Plaintiff must show dominance Then burden shifts to dominant shareholder to clense actions. Section 134? 144? Doesn’t apply here Sinclair oil v Levien Sinclair owned 97% of Sinclair Venezuela Sinclair nominates all members of SinVen’s board Directors were not independent b/c sinclair’s domination Sinclair owed Sinven a fiduciary duty Parent owes fiduciary duty to subsidiary when there are parent subsidiary dealings, but this alone doesn’t trigger intrinsic fairness standard…there is a self-dealing requirement (parent is on both sides of transaction) Self dealing occurs when parent causes subsidiary to act so that parent receives something from subsidiary to exclusion of and detriment to minority stockholders. Facts: b/t 1960 and 66 Sinven paid 105M in dividends which was 38M more than earnings. But a proportionate share was given to minority shareholders as well, so it wasn’t self dealing.
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This note was uploaded on 10/18/2011 for the course LAW 700 taught by Professor Kim during the Spring '10 term at USC.

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Minority - Dominant shareholder has more than 50 of company Courts presume dominance w 25 control Plaintiff must show dominance Then burden shifts

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