Shapiro v. Greenfield

Charles Shapiro (defendant) was a director and CEO of College Park Woods, Inc. (College Park) (defendant), along with his sister, Joan Smith, and son, Michael Shapiro (defendants). College Park purchased a large parcel of land in 1961. It developed a shopping center on the parcel which proved to be unprofitable. The board determined that College Park needed to redevelop the property into a much larger shopping center, and that a business partner was needed to accomplish this. After struggling to find a suitable partner, the board ultimately agreed to an arrangement with a joint venture in which Shapiro held a large interest. College Park conveyed title to the property to the joint venture in exchange for a 50 percent ownership interest in the joint venture. College Park would retain no management rights, but would also bear no risk if the project failed. Prior to approving the arrangement, the board called a special meeting of the shareholders to consider the transaction, and provided notice of exactly what was being considered. Marvin and Betty Greenfield (the Greenfields) (plaintiffs) were shareholders but did not attend the meeting. The attending shareholders approved the project unanimously, and the board thereafter ratified that decision. The Greenfields then sought to access corporate records concerning the transactions. The board provided some but refused others. The Greenfields sued College Park and its board members, seeking an accounting, damages, and appointment of a receiver, among other relief. They argued that Charles Shapiro had usurped a corporate opportunity. The trial court agreed, and further found that the transaction was not fair and reasonable to the corporation and that there were no disinterested directors. The board members appealed.