Lawson v. Household Finance Corp.
Delaware Supreme Court
17 Del. Ch. 343, 152 A. 343 (1930)
- Written by Steven Pacht, JD
Facts
The Household Finance Corporation (Household) (defendant) was a Delaware corporation whose main business was the making of small, unsecured loans throughout the United States. Household issued Class B common stock to certain employees to incent the employees to protect Household’s interests. Household’s corporate charter and bylaws (1) required Class B stock owners to notify Household if they wished to sell their stock, (2) provided for the naming of appraisers for the stock, (3) called for disregarding goodwill in valuing the stock, and (4) gave Household an option to purchase the stock. John Lawson (plaintiff), a Class B stock owner, sued Household, arguing that the restrictions on his Class B stock were unlawful under Delaware law because they violated his right to dispose of his personal property and because the valuation of Class B stock would exclude goodwill. The Delaware Chancery Court ruled for Household. Lawson appealed.
Rule of Law
Issue
Holding and Reasoning (Richards, J.)
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