Blasius Industries, Inc. v. Atlas Corp.
Court of Chancery of Delaware
564 A.2d 651 (1988)
Blasius Industries, Inc. (Blasius) (plaintiff) holds 9 percent of the stock of Atlas Corp. (defendant). Blasius proposed that Atlas sell off some of its assets, issue bonds, and distribute a large one-time dividend to shareholders. The directors of Atlas believed this was not in the company’s best interest and rejected the idea. On December 30, 1987, Blasius formalized their proposal and also requested the election of eight new board members. This would increase the size of the board from eight to 15, the maximum allowed under the corporate charter. Fearing a takeover by Blasius, the board held an emergency meeting the next day and amended the bylaws to add two additional board members. This move was designed to prevent Blasius from seizing an eight to seven advantage on the board at the next election. Blasius sued Atlas, seeking to void the board’s December 31, 1987 action as inequitable.
Rule of Law
Holding and Reasoning (Allen, J.)