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Business Organizations Keyed to Smith
Adlerstein v. Wertheimer
Citation:
2002 WL 205684 (slip opinion)Facts
Adlerstein founded SMC, and served as the company’s CEO and board. Adlerstein controlled a majority of the company’s voting shares. Wertheimer and Mencher later became board members, after which they learned the company was in weak financial position. The two hired an outside consultant and determined Adlerstein must be removed as CEO if the company were to survive. The two created a plan to oust Adlerstein, and obtain a majority of the company’s voting shares. The company adopted the plan at a board meeting over Adlerstein’s objection, and began implementing the plan. Adlerstein claimed the initial board meeting was not properly noticed, rendering the board’s subsequent actions invalid. The company’s bylaws included a provision that required 48-hour notice of a meeting. At trial, it was determined Adlerstein did not have prior knowledge of the Wertheimer-Mencher plan.
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