Toms v. Cooperative Management Corporation
Louisiana Court of Appeals
741 So. 2d 164 (1999)
In 1988, Cooperative Management Corporation (CMC) (defendant) redeemed 150 shares of stock owned by Janet Evans Toms (Toms) (plaintiff) for $22,500. The shares were removed from CMC’s accounting, the total of outstanding shares was reduced by 150, and the stated capital was reduced. In 1997, Toms sued to rescind the redemption on the grounds that the stock was redeemed for less than fair market value. CMC’s Articles of Incorporation required approval by 85 percent of shareholders before the CMC’s stated capital could be increased or reduced. In 1997, a majority less than 85 percent of CMC’s shareholders voted to issue 150 shares of stock to Toms for $22,500 in order to settle the suit. CMC’s Board voted over objections that any consideration paid would be deemed capital surplus instead of stated capital. CMC’s minority shareholders intervened to stop the sale on the grounds that the sale would increase CMC’s stated capital and there had been no 85 percent majority vote approving the increase. The trial court granted a writ of mandamus to stop CMC from issuing the stock to Toms. Toms appealed to the Louisiana Court of Appeals.
Rule of Law
Holding and Reasoning (Peatross, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.
Here's why 166,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 13,800 briefs, keyed to 187 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.