Steven v. Hale-Haas Corp.
| Decision Date | 09 August 1946 |
| Citation | 249 Wis. 205,23 N.W.2d 768 |
| Parties | J. D. R. STEVEN, Respondent v. HALE-HAAS CORPORATION et al., Appellants. |
| Court | Wisconsin Supreme Court |
OPINION TEXT STARTS HERE
For former opinion, see 23 N.W.2d 620.
I am not in disagreement with the majority opinion as to the rules of law applicable to this case, but feel that the facts, which are largely undisputed, sustain the decision of the trial court and that his decision was not against the great weight and clear preponderance of the evidence.
Just prior to the proposed refinancing plan Earl M. Hale, president, director and majority stockholder of Hale-Haas Corporation, was the owner of 5,370 shares of common stock of the Hale-Haas Corporation, which was pledged as security for a loan of $50,000 with Pedee Investment Company and Drummond Investment Company. He also had voting control of 3,392 shares of the common stock which he had purchased from the Haas estate on a long-term contract, on which he still owed approximately $37,000, the unpaid balance being payable in monthly installments of $350 per month. If the value of this stock was $10 per share it is evident that he had little or no equity at that time.
The trial court found that at this point Pedee Investment Company was interested in becoming an owner of the common stock of Hale-Haas Corporation to the extent of $300,000 to $350,000 if the price per share could be agreed upon.
In January, June and July, 1943, Hale purchased from others 2,183 additional shares of common stock and 1,062 shares of preferred stock of Hale-Haas Corporation. Pedee Investment Company loaned Hale all the money necessary to make such purchases, which were in the total sum of $100,208.75. On October 15, 1943, all of Hale's loans were consolidated into one promissory note for $150,208.75 to Pedee Investment Company secured by all of his stock except the stock purchased on the long-term contract. At the same time Hale executed and delivered his note to Pedee Investment Company for $1,713.10, covering accrued interest on his indebtedness to date. The court found that at the time these notes were given and the stock pledged for security Hale had no other plan or means of paying these obligations.
The preferred stock of Hale-Haas Corporation was callable at $105 per share, and was purchased by Hale at $75 per share. It is evident the plan was that the preferred stock purchased by Hale was to be called at $105, he being in position to call it, and that in order to call this stock Pedee Investment Company would purchase common stock of Hale-Haas Corporation at $10 per share, thus making a profit to Hale of between $30,000 and $35,000. In fact, a resolution providing for the calling of the Hale-Haas Corporation stock was adopted by the board of directors on October 18, 1943, but the plan was subsequently abandoned when the plaintiff...
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...directors. Data Key [Partners v. Permira Advisers, LLC , 356 Wis.2d 665, 682, 849 N.W.2d 693 (Wis. 2014) ] (quoting Steven v. Hale-Haas Corp. , 249 Wis. 205, 221 (1946) ) ("The business of a corporation is committed to its officers and directors ...."). It is even more settled that actions ......
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...with the exercise of honest discretion, the management of the corporation cannot be assumed by the court.Steven v. Hale–Haas Corp., 249 Wis. 205, 221, 23 N.W.2d 620 (1946). ¶ 35 Wisconsin's codification of the business judgment rule, Wis. Stat. § 180.0828(1), provides the framework for anal......
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...judgment of a company's directors. Data Key [Partners v. Permira Advisers, LLC, 356 Wis.2d 665, 682 (Wis. 2014)] (quoting Steven v. Hale-Haas Corp., 249 Wis. 205, 221 . . (1946)) (“The business of a corporation is committed to its officers and directors . . . .”). It is even more settled th......