Theodora Holding Corp. v. Henderson De Ct. Of Chancery,

257 A.2d 398 (1969)

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Nature of the Case

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Facts

Mr. Henderson (D) held the majority of holdings of both common and preferred stock of Alexander Dawson Inc. Theodora Holding (P) is a group formed by D's x-wife and held approximately one-fourth of outstanding common shares of Alexander Dawson, Inc. Using his voting powers, D reduced the number of the board of directors from 8 to 3. D, over objections of one member of the reduced board, namely his daughter, made a gift of over $500,000 in stock to the Alexander Dawson Foundation. The Foundation is recognized as a charitable trust by the Department of Internal Revenue. The Internal Revenue Code has guidelines pertaining to characterization of gifts by corporation.