Gidwitz v. Lanzit Corrugated Box Co.
Illinois Supreme Court
20 Ill. 2d 208, 170 N.E.2d 131 (1960)
- Written by Kelly Simon, JD
Facts
Lanzit Corrugated Box Company (Lanzit Corrugated) (defendant) was a closely held corporation with 50 percent of shares owned by Victor Gidwitz (plaintiff) and his family; and 50 percent of shares owned by Joseph Gidwitz and his family. Joseph became the president of Lanzit at a time when the two shareholder groups were in accord. The two groups of shareholders became increasingly in conflict and found themselves deadlocked as to corporate matters, with neither faction able to control a majority of shares. Throughout his term as president, Joseph acted unilaterally on many occasions—giving salary increases corporate officers, making salary deductions to Victor’s salary, securing loans, and undertaking corporate reorganization activities without consulting or obtaining the consent of the board. For almost 10 years, no shareholders were asked to vote on directors for Lanzit Corrugated. Victor and his faction of shareholders filed suit requesting the dissolution of the company based on the bad acts of the Lanzit Corrugated board, led by Joseph and his shareholder allies. The trial court determined that Lanzit Corrugated would be liquidated. Joseph and his allies appealed.
Rule of Law
Issue
Holding and Reasoning (Hershey, J.)
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