Toms v. Cooperative Management Corporation

741 So.2d 164 (1999)

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Nature of the Case

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Facts

P sued D, a closely held family corporation, to rescind a 1988 transaction in which 150 shares of stock in D were redeemed by D for $ 22,500. P learned from a subsequent appraisal of D's immovable assets that she received significantly less for her stock than it was actually worth. D decided, in an attempt to settle the litigation, to issue 150 new shares of d stock to be sold to P for $22,500. On that same date, D, by majority vote, approved a resolution providing that any consideration paid to D by a person for shares of stock be allocated to the capital surplus account of D rather than to stated capital. The directors voting in favor of the resolution owned less than 85 percent of the stock of D. A group of minority shareholders of D did not approve of the Board's decision and have intervened seeking to prevent the proposed sale on the basis that the transaction will necessarily result in an increase of D's stated capital account, an action that requires approval of the shareholders owning 85 percent of the stock under D's by-laws. The trial court granted a writ of mandamus to stop D from issuing the stock. P appealed.