Stringer v. Car Data Systems, Inc.
Oregon Supreme Court
841 P.2d 1183 (1992)
Stringer (plaintiff), Schubert (plaintiff), and two others collectively owned 43 percent of the stock of Consumer Data Systems (CDS). Thirty-two individuals (defendants), including the entire board of directors, owned the remaining 57 percent. The majority shareholders developed a plan to squeeze out the minority. They created a second corporation, Car Data Systems, Inc. (Car Data), and all 32 majority shareholders transferred their shares in CDS to Car Data in exchange for Car Data shares. Car Data then caused CDS to approve a merger with it, over the objections of Stringer, Schubert, and the two other minority stockholders. Car Data offered them $0.002 per share. Stringer and Schubert rejected the offer and sued the majority shareholders, CDS, and Car Data for breach of fiduciary duty, among other charges. Stringer and Schubert claimed the stock was worth at least $0.10 per share and that the majority shareholders knew their price was unfairly low. The majority shareholders moved to dismiss on the grounds that the appraisal procedure was Stringer and Schubert’s sole remedy. The trial court agreed and found for the majority shareholders. The appeals court affirmed.
Rule of Law
Holding and Reasoning (Peterson, J.)