Giuricich v. Emtrol Corp.

449 A.2d 232 (Del. 1982)

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Nature of the Case

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Facts

In order to start up their new entity, Ps agreed to supply technical expertise, and Continental agreed to supply the necessary capital. Continental got 80% of the shares and Ps got 20%. Ps got an additional option to acquire 15% more of the stock. That option could be exercised in the first fiscal year that the corporation showed a profit. Continental was given control of Emtrol's Board. There was no express agreement concerning restructuring of the board in the event that Ps exercised their option. Ps exercised their option and then owned 50% of the shares of Emtrol. They then demanded that the board be restructured and that was refused by the existing board. The existing board passed a resolution to amend the bylaws and expand the board from five to seven members. The two new directors were appointed by Continental. P sued D, and the trial judge refused to appoint a custodian; there had been no injury to any vital interests of Ps as stockholders nor has Emtrol suffered any apparent injury.