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Donahue v. Rodd Electrotype Co.
Citation:
328 N.E.2d 505 (1975)Facts
In the mid-1930s Harry Rodd and Josephine Donahue had become employees of Royal Electrotype. Rodd acquired 200 of the corporation’s 1000 shares and Donahue acquired 50 shares. In 1955 Rodd became president and general manager and Rodd and Donahue became Royal’s sole shareholders, owning 80% and 20% of its stock, respectively. in 1960 the corporation was renamed Rodd Electrotype. Prior to 1967 Harry had distributed 117 of his 200 shares to the corporate treasury. The plaintiff has characterized the corporate purchase of Harry Rodd’s shares as an unlawful distribution of corporate assets to controlling stockholders.
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