In re Sunstates Corp. Shareholders’ Litigation
Delaware Court of Chancery
788 A.2d 530 (2001)
- Written by Eric Miller, JD
Facts
Sunstates Corporation (defendant) provided for the issuance of preferred stock in its certificate of incorporation. The certificate further provided that Sunstates could not repurchase shares of its preferred stock while in arrears on the preferred-stock dividend. Subsidiaries of Sunstates made significant acquisitions of Sunstates preferred stock while Sunstates was in arrears on the preferred-stock dividend. A group of preferred stockholders (plaintiffs) brought a class action in the Delaware Court of Chancery, alleging violation of the certificate of incorporation and the implied covenant of good faith and fair dealing. Sunstates moved for summary judgment on the issue, asserting that the certificate did not apply to purchase by subsidiaries.
Rule of Law
Issue
Holding and Reasoning (Lamb, J.)
What to do next…
Here's why 811,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 46,300 briefs, keyed to 988 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.
