Robinson v. T.I.M.E.-DC, Inc.
United States District Court for the Northern District of Texas
566 F. Supp. 1077 (1983)
- Written by Heather Whittemore, JD
Facts
Jack Robinson (plaintiff) owned shares of preferred and common stock in T.I.M.E.-DC, Inc. (TIME) (defendant), a nationwide trucking company. Under TIME’s certificate of incorporation, TIME’s preferred shareholders were entitled to a liquidation preference in the event of its liquidation. In 1981 TIME transferred all of its real estate holdings, worth approximately $40 million, to NLI, a subsidiary of TIME. In return, TIME received all of NLI’s common stock. TIME subsequently spun off the NLI stock to TIME’s common shareholders. After TIME transferred its real estate to NLI, it continued to operate and retained assets worth over $45 million. In 1982, in response to a labor strike, TIME sold 90 percent of its vehicles to raise cash and temporarily ceased its trucking operations. After the strike ended, TIME resumed its operations. Robinson filed a lawsuit in federal district court, alleging that the transfer of TIME’s real estate to NLI, its sale of vehicles in response to the strike, or a combination of the two resulted in a liquidation of TIME. Robinson argued that because of the liquidation, he and the other preferred shareholders were entitled to their liquidation preferences.
Rule of Law
Issue
Holding and Reasoning (Woodward, C.J.)
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