Hariton v. Arco Electronics, Inc.
Delaware Supreme Court
188 A.2d 123 (Del. 1963)
Arco Electronics Corporation (Arco) (defendant) and Loral Electronics (Loral) entered into a “reorganization agreement” under section 271 of Delaware corporation law. The agreement was subject to stockholder approval and provided that Loral would acquire Arco’s assets; Loral would issue 283,000 shares of stock to Arco’s shareholders; and Arco would dissolve. The agreement was approved by Arco shareholders. Hariton (plaintiff), an Arco shareholder, brought suit, seeking to enjoin the “reorganization” on the grounds that it was illegal because it resulted in the same thing as a merger, but he was not given a chance to invoke his right of appraisal. The Delaware Court of Chancery granted Arco’s motion for summary judgment. Hariton appealed.
Rule of Law
Holding and Reasoning (Southerland, J.)