Barth v. Barth

659 N.E.2d 559 (1995)

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Nature of the Case

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Facts

P, an individual, owned shares in Barth Electric Co., Inc. and sued D who was the president and majority shareholder. P sued as an individual and alleged that D had paid excessive salaries to himself and his immediate family, used corporate employees to perform services on his son's and his house without compensating the corporation, dramatically lowered dividend payments, and appropriated corporate funds for his personal investments. The trial court granted a motion to dismiss for failure to state a claim upon which relief may be granted. P appealed. The court of appeals reversed; P could have brought a derivative action, and none of the reasons underlying the general derivative action were present and that such an action would exalt form over substance.