Quimbee logo
DMCA.com Protection Status

Cawley v. SCM Corp.

530 N.E.2d 1264 (1988)

Case BriefRelatedOptions
From our private database of 35,600+ case briefs...

Cawley v. SCM Corp.

New York Court of Appeals

530 N.E.2d 1264 (1988)

Facts

In 1986 Hanson Trust PLLC (Hanson) purchased over 50 percent of the outstanding shares of SCM Corporation (defendant) at $75 per share, gaining control of SCM. A merger between SCM and HSCM Merger Company (HSCM), a subsidiary of Hanson, was approved by over 75 percent of SCM’s shareholders. William V. Cawley (plaintiff), an SCM shareholder, opposed the merger. Cawley was offered $75 for each of his shares of SCM stock. Cawley rejected the offer, believing the stock was worth more. Under relevant tax laws, SCM would receive a substantial tax benefit from Cawley selling his shares. Cawley believed that the tax benefit that SCM would receive from the sale of his shares should be factored into the fair value of his shares, increasing their price. Cawley initiated an appraisal action pursuant to the New York Business Corporation Law, which allows a shareholder dissenting from a merger to receive fair value for his shares after a valuation by a court. The New York Supreme Court, the state’s trial court, found that $75 per share was a fair price for the stock. In coming to its conclusion, the supreme court considered the price at which Hanson had purchased its SCM stock and the trading history of the stock prior to the merger. The supreme court did not consider the tax benefits that SCM would receive as a result of the merger. The New York Supreme Court, Appellate Division affirmed the supreme court. Cawley appealed.

Rule of Law

Issue

Holding and Reasoning (Simons, J.)

Dissent (Bellacosa, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 620,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials
  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

    Learn about our approachRead more about Quimbee

Here's why 620,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 35,600 briefs, keyed to 984 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 620,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 35,600 briefs - keyed to 984 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership