Russell Feldmann (defendant) was the majority stockholder in the Newport Steel Corporation (Newport). During the Korean War, there was a severe shortage of steel supply, making Newport very valuable. Feldmann, taking advantage of the shortage, sold his controlling interest to Wilport Company (Wilport) for a premium price. Newport stockholders (plaintiffs) brought a derivative suit against Feldmann seeking accounting for and restitution of Feldmann’s gains in the sale. The plaintiffs contended that the premium Wilport paid included a corporate asset—the ability to control production of steel in a time when supply was very low. They argued that this power was held in trust for Newport by Feldmann as its fiduciary.