Farris v. Glen Alden Corp. Pa. S.Ct.,

393 Pa 427, 143 A.2d 25 (1958)

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Nature of the Case

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Facts

Glen Alden Corp. (D) is a Pennsylvania corporation engaged principally in the mining of anthracite coal. This operation had resulted in $14 million in tax loss carryovers. In October 1957, List Industries Corp. purchased 38.5% of the stock in D and placed three of its directors on D's board. In March of 1958, the two corporations entered into a reorganization agreement whereby List was to sell all assets to D in exchange for stock and changing the name of D to List Alden. Notice and proxy was sent on March 20, 1958, for the April 11 meeting to vote on the agreement. A majority of outstanding stockholders approved the agreement. Farris (P), a stockholder of D, alleged the notice was defective, and the approval should be invalidated. P's complaint was that the reorganization agreement was actually a merger between defendant corporation and another company and that proper notice was not given to the shareholders of their right to dissent and claim fair value for their shares. D contends that the agreement was a purchase of corporate assets of which shareholders had no right of dissent or appraisal. The trial court held that the plan was a de facto merger and because D did not provide notice and appraisal rights the shareholder vote and agreement were void. D appealed.