Rauch v. RCA Corporation
United States Court of Appeals for the Second Circuit
861 F.2d 29 (2d Cir. 1988)
General Electric Company (GE) acquired RCA Corporation (RCA) (defendant) and converted all RCA stock into cash. Each share of RCA preferred stock was converted into $40 even though the RCA certificate of incorporation provided that owners of preferred stock would receive $100 per share if the corporation ever chose to redeem the stock. Rauch (plaintiff), an owner of preferred stock, brought suit, seeking $100 per share. The district court dismissed the complaint, finding that GE’s acquisition of RCA constituted a merger and not a redemption of stock by RCA. Rauch appealed.
Rule of Law
Holding and Reasoning (Mahoney, J.)