In Canada, you could advance a statutory oppression claim against the corporation, seeking rectification of the share issuance - but I think the oppression remedy may be more limited in scope in the US

Neil

> On Sep 13, 2018, at 18:37, Harrington Matthew P. <matthew.p.harrington@umontreal.ca> wrote:
>
>
> Hello All
>
> I`m working on an interesting problem (at least to me) involving a situation where a corporation misallocates shares after a reorganisation.
>
> Facts like this:
>
> There is a closely held family company.
>
> Before the reorganisation, there is one class of shares and 10 shareholders. Father, Brother, and 8 children.
>
> The reorganisation document (amendment to the articles?) provides that shareholders turn in shares and for every share they turn in they get 1 class A voting and 3 class B non-voting
>
> BUT --- wait for it --- the shares are turned in but the president, (the father), decides to keep the A for himself and another officer (his brother) and issues everyone else (the children) B shares alone. So, instead of getting 1 A and 3 B, the shareholders all got 4 B, no A. The father and brother thus keep total control foo the voting shares.
>
> Assume 50 years have passed. An executor discovers the mistake.
>
> Is there an action? If so, it reformation? Recision? Quo warranto?
>
> Assume a jurisdiction in the US, but wondering if that matters. (I think I know the Canadian answer).
>
> Assume as well that laches can be dealt with.
>
> Granted, these facts are thin, but I`m trying to not to over-complicate my problem. I`m ignoring breach of fiduciary duty for the moment.
>
> I wonder if anyone has any idea on how or if an action might be brought. Purely theoretical, but wanted to get some reaction before I go too far down a road that won't pan out.
>
> Any ideas gratefully accepted- especially from American colleagues as I`m trying to put this problem there for reasons not relevant here.
>
> Thanks.
>
>
>
>
> ---------------------------------------
> Matthew P. Harrington
> Professeur titulaire
>
> Faculté de droit
> Université de Montréal
> 3101 chemin de la Tour
> Montréal, Québec H3T 1J7
> 514.343.6105
> --------------------------------------
>
> [https://encrypted-tbn0.gstatic.com/images?q=tbn:ANd9GcRgX-NM1Ac4Upw7540OBYbvJd2eP1dtEKbUibrVjScGP_cCpECnVZLGgibz]
>
>