C.R.A. Realty Corp. v. Fremont General Corp

9th Cir. Ct. of App., 5 F.3d 1341 (1993)

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Nature of the Case

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Facts

Fremont General Corp. (D) had issued 8,296,929 shares of common stock. McIntyre and his wife were co-settlors of a trust holding enough stock to make them the beneficial owner of greater than 10% of the stock. In February of 1988, McIntyre and his wife loaned their son David $2 million in exchange for a demand note and pledge of 198,187 shares. In December of 1989, David's employment with D was terminated, and he agreed to sell the 198,187 shares. However, due to the increase in stock price, only 141,193 shares were needed for satisfaction of the loan. McIntyre sold 70,000 shares in March of 1990. P is a stockholder of D.