Suzuken Corp. v. Kobayashi Pharmaceutical Corp.
Nagoya District Court, Japan
12 November 2007, 1319 Kinyu Shoji Hanrei 50 (2007)
- Written by Curtis Parvin, JD
Facts
Suzuken Corporation (Suzuken) (plaintiff) became a 20 percent shareholder of Kobasho Corporation (Kobasho) as part of a share exchange in which Kobasho received all of Suzuken’s shares in exchange for the 20 percent share in Kobasho—essentially a merger. Kobasho was a subsidiary of Kobayashi Pharmaceutical Corporation (Kobayashi) (defendant), and Kobayashi retained 80 percent of Kobasho’s shares postmerger. As part of the transaction, Kobayashi and Suzuken executed a shareholders’ agreement that prohibited the parties from transferring all or part of Kobasho to another for five years and, after five years, gave the nontransferring party priority right to acquire a proposed transfer of shares. Within three years, Kobayashi sought to make Kobasho a 100 percent subsidiary of Mediceo Paltac Holdings, again using a share-exchange procedure. Suzuken filed an action seeking injunctive relief, claiming the proposed merger violated the shareholders’ agreement between Suzuken and Kobayashi. Suzuken and Kobayashi were both large companies listed on the Tokyo Stock Exchange.
Rule of Law
Issue
Holding and Reasoning (Per curiam)
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