Nature of the Case
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Facts
A company was formed with each of three incorporators holding 300 shares of stock in Alaska Plastics (D). One of the shareholders was forced to split his stock in 1970 as part of a divorce settlement. Thus, Patricia Muir had 1/6th of the company or 150 shares. Muir was not notified of annual shareholder meetings. D was never authorized to pay dividends, but there were director's fees paid. One of the directors was voted an annual salary of $30,000 per year. At the 1974 board meeting, it was decided to offer Muir $15,000 for her shares. Muir then made a demand to inspect the books, and it was learned that the shares were worth between $23-40K. Later in 1974, a special directors meeting was held and it was decided to buy another company for $50,000 that made the same insulation that D did. Muir was never informed of this decision. However, at the shareholder meeting in 1975, she did not dissent from a shareholder vote ratifying all the acts of the directors and officers of the previous year. In 1975, Muir offered her stock to D at the price of $40,000. D countered with an offer of $20,000. Shortly after, their first facility burned to the ground with a total loss. There was no insurance. Production was carried on at the wholly owned subsidiary that had just been purchased. The fire in effect turned D into a holding company for its affiliate. Eventually, a lawsuit was filed, and the trial judge entered judgment that D was to buy P's shares for a total judgment of $52,314. All parties appealed.
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