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Brodie v. Jordan

Supreme Judicial Court of Massachusetts
857 N.E.2d 1076 (Mass. 2006)


Walter Brodie (Walter), Barbuto, and Jordan were the three directors of Malden, a Massachusetts corporation. Each held one-third of the shares of the corporation. As Walter got older and wanted to be less involved, he requested multiple times that Barbuto and Jordan (defendants) buy out his shares. They refused. Neither the articles of organization nor corporate bylaws called for a buyout obligation upon request. Eventually Walter was voted out as president and director of Malden and died five years later. Walter’s executrix (Brodie) (plaintiff) inherited Walter’s shares in Malden. Upon her requests, the defendants repeatedly failed to provide her with various company information. In addition, Brodie nominated herself as director, but was voted down by the defendants. Brodie also requested that the defendants buy out her shares, but they again declined. Brodie brought suit for breach of fiduciary duty. The Massachusetts Superior Court held that the defendants’ actions constituted a “freeze out” and ordered the defendants to buy out Brodie’s shares. The defendants appealed, but only on the issue of the buy out order.

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