Reference no: EM133229735

CORPORATION LAW

FACTS: Ms. Minows is a share holder and owns 51% shares. Assess Ms. Minows ability to use the possible actions to advance her plan mentioned in 

1. Amending the certificate of incorporation

2. Amending the bylaws

3. Increasing the size of the board

4. removing one or more directors

5. Dissolving the company and distributing assets

According to the fact pattern, one of the shareholders owned 51 percent of the stock. The CEO owned 27 percent. The stock had fallen steadily. The CEO director block has allowed him to control the outcome of board election. How can the shareholder Minow with 51 percent stock control the board since two thirds of the seats is required to gain control of the board.    This is a case of staggered directors.  the Board of directors recommended. The shareholders approved an amendment of the Village charter to provide that "the power to amend the bylaws shall be vested exclusively in the director, and the laws specify that the numbers of directors shall be fixed at 9 members divided into three equal classes, each of whose term shall expire in successive years." Note: Staggered directors can be removed only FOR CAUSE.  

II. RULES: 

Mentioned as follows are the Delaware General Corporation law:

1. Section 109- a corporation bylaws may be provided for amendment by the Board of Directors, by shareholders, or both.
2. Section 141-Any director or the entire board may be removed, with or without cause, by the holder of the majority of the shares entitled to vote at an election of directors, which allows directors to be removed by a simple majority.
3. Section 223. Vacancies and newly created directorship. Board vacancies may be filled by a majority of directors with less than a quorum. Still, if the charter entitles a particular class of directors, vacancies may be filled by a majority of the board elected by such class.
4. Section 242: Amendment of Certificate of Incorporation. The affirmative vote of a majority of the outstanding stock and a majority of each class.
5. Dissolution 275. The majority of the outstanding stock of the corporation is entitled to vote for dissolution

QUESTIONS:

1. Asses Minows ability to use the following possible  actions to advance to her plan using the Delaware Sections above. Remember this is a staggered board. A shareholder can must win two elections with 13-15 months apart. 

a. Amending the certificate of incorporation

b. amending the bylaws

c. increasing the size of the board

d. removing one or more directors

e. dissolving the company.

2) Are there other facts you must know before giving your opinion to Ms. Minows-shareholder ?

3.) Suppose that, instead of amending the bylaws, CEO- Morrison had managed to insert all of the above changes in the certificate of incorporation. How could he? 

Please answer the number 1- 3 questions. This are important.