Where a corporate reorganization with amendment of articles was messed up due to a mistaken understanding of tax law, an ONCA case called Juliar allowed rectification but the Supreme Court of Canada has now (rightly in my view) said that fixing the articles which were amended in a way that is later regretted is not a case for rectification because rectification is not suitable where you simply regret the result of what you have done, only when a document incorrectly records the relevant legal acts, proven as intended acts not just as tax goals: Canada (Attorney General) v. Fairmont Hotels Inc., [2016] 2 SCR 720, 2016 SCC 56 (CanLII), <http://canlii.ca/t/gvzzj> cf Smith, Lionel, Can I Change My Mind? Undoing Trustee Decisions (July 23, 2008). Estates Trusts & Pensions Journal, Vol. 27, p. 284, 2008. Available at SSRN: https://ssrn.com/abstract=1272485
I think reformation is the US name for rectification.
Your case seems different: the relevant share issues were simply wrongly done, not in accordance with the relevant corporate decisions. Rectification of the shareholder register, where it is just wrong (as opposed to where people wish they had done things differently) should be possible, but possibly subject to a limitation period.
In Canada, as Neil says, oppression allows you to ask for anything for just about any reason.
LDS

On 2018-09-13, 18:48, "Neil Guthrie" <nguthrie@mac.com> wrote:

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
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