Farahpour v. DCX, Inc.
Delaware Supreme Court
635 A.2d 894 (1994)
- Written by Jenny Perry, JD
Facts
DCX, Inc. (DCX) (defendant) was originally incorporated as a for-profit stock corporation. By majority vote of the stockholders, DCX was later converted to a nonprofit nonstock corporation operating for the mutual benefit of its members. Approximately 60 years later, DCX became a for-profit stock corporation again through an amendment to its certificate of incorporation and a series of resolutions by which the reconstituted stock was issued to the voting members of the corporation. As a result of the reconversion, two classes of nonvoting members were eliminated without prior notice to the nonvoting members. Ata Farahpour (plaintiff), a nonvoting member of the nonprofit corporation, brought a legal challenge to the reconversion of DCX to a for-profit stock corporation and the effect of the conversion on the nonvoting members. The District of Columbia Court of Appeals certified two questions of law to the Delaware Supreme Court regarding whether changes to the corporate structure, the elimination of nonvoting members’ rights, and lack of notice to the nonvoting members were permissible
Rule of Law
Issue
Holding and Reasoning (Walsh, J.)
What to do next…
Here's why 830,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 46,400 briefs, keyed to 994 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.
