Quimbee logo
DMCA.com Protection Status
From our private database of 18,400+ case briefs...

Cheff v. Mathes

Delaware Supreme Court
199 A.2d 548 (Del. Ch. 1964)



Holland Furnace Company (Holland) (defendant) was a furnace manufacturer and sold its furnaces by directly hired retail salesmen. This practice was unique in the business and management considered it to be a main reason for the company’s success. Cheff was a director and the CEO of Holland and he owned 6,000 shares of Holland stock. In June 1957, Cheff met with Arnold Maremont, the chairman of the board of Motor Products Corporation (Motor Products) (defendant). Maremont asked Cheff about the possibility of a merger between Holland and Motor Products, but because of Holland’s unique sales practice, which Maremont did not care for, Cheff decided that a merger was not feasible. Around the same time, Maremont began buying shares of Holland stock on the open market, even though he indicated to Cheff that he no longer had interest in the company. Soon, Maremont owned 55,000 shares in Holland. After an investigation of Maremont, the Holland board of directors found that he had a reputation for coming in and liquidating a number of companies. By August 1957, Motor Products owned about 100,000 shares of Holland. At that time, Maremont demanded that he be put on the Holland board of directors—a request that Cheff declined. At that point, Maremont purchased more shares of Holland. Then, in October 1957, the Holland board of directors (defendants) authorized a corporate purchase of 155,000 shares of Holland back from Motor Products. The purchase price was above market price, but not unreasonable given the controlling nature of the shares. A few months later, Mathes, et al. (plaintiffs) brought suit against Holland, its board, and Motor Products, alleging that the primary purpose of Holland’s purchase of stock from Motor Products was to effectuate a perpetuation of control by the Holland directors. The Delaware Court of Chancery agreed, finding in favor of the plaintiffs. The defendants appealed.

Rule of Law


Holding and Reasoning (Carey. 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 497,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read 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. Read more about Quimbee.

Here's why 497,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 18,400 briefs, keyed to 985 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.

Questions & Answers

Have a question about this case?

Sign up for a free 7-day trial and ask it

Sign up for a FREE 7-day trial