Matthew

In your hypothetical, was the missallocation of shares unknown for 50
years, until discovered by the executor? I think it would be difficult
to undo the share transfer if it had been known about over 50 years.
Maybe that's a laches argument.

Kind regards

Ger

On 9/14/18, Lionel Smith, Prof. <lionel.smith@mcgill.ca> wrote:
> 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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> >
> >
>
>
>