Hollis v. Hill
United States Court of Appeals for the Fifth Circuit
232 F.3d 460 (2000)
James Hollis (plaintiff) and Dan Hill (defendant) founded First Financial USA, Inc. (FFUSA), a Nevada company that marketed first-lien mortgage notes. Hollis and Hill also owned equal shares of a Texas broker-dealer. Hill owned 50 percent of FFUSA, served as president of FFUSA, and operated the Houston office. Hollis owned 50 percent of FFUSA, served as vice president of FFUSA, and operated the Florida office. At first, Hollis and Hill took salaries from FFUSA. Later, Hill began complaining that Hollis was not carrying equal weight, and Hill stopped paying Hollis’s salary. Hill proposed to buy out Hollis’s interest. Hollis rejected the offer. In response, Hill threatened to close the broker-dealer business and establish his own business. Hill also put part of FFUSA’s business in a sole proprietorship in his name without Hollis’s knowledge. Hill stopped sending FFUSA’s financial reports to Hollis and refused to allow Hollis to inspect corporate records. Hollis retained an attorney and asserted his rights as a shareholder to inspect the books and records of FFUSA and the broker-dealer business. Shortly before the inspection, Hill and Hollis agreed that Hill would acquire Hollis’s interest in the broker-dealer business and draw a $200,000 salary from FFUSA, and that Hollis would draw a $120,000 salary from FFUSA. Disagreements between Hollis and Hill resurfaced, and Hill again stopped sending company reports to Hollis. Hill also reduced his own salary and eliminated Hollis’s salary, disconnected phone service to Hollis’s office, terminated the lease at Hollis’s office, and eventually terminated Hollis as vice president and made a capital call on Hollis. Hollis filed suit against Hill, alleging shareholder oppression. Hollis also alleged that Hill’s actions were a breach of fiduciary duty and that equitable relief was available. Hollis sought to dissolve FFUSA. The district court concluded that Hill’s conduct was oppressive, but did not order dissolution and instead ordered Hill to buy Hollis’s shares. The district court ordered the buyout value backdated to the date the oppression began. Hill appealed.
Rule of Law
Holding and Reasoning (Politz, J.)
Dissent (Jolly, J.)
What to do next…
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 724,000 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
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 724,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 45,600 briefs, keyed to 983 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.