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Business Organizations Keyed to Smith
Henry v. Phixios Holdings, Inc.
Citation:2017 WL 2928034 (Del. Ch. July, 2017)
Phixios implemented a stock-transfer restriction, which permitted the majority of stockholders to revoke stock if the individual behaved in a manner that damaged the corporation. Henry acquired Phixios stock, but the restriction was not included on the stock certificate itself and Henry had no knowledge of the restriction. Henry only later learned of the stock-transfer restriction, when the majority of shareholders attempted to rescind his stock in response to claims he was competing with the corporation. Henry attempted to inspect the corporation‘s books and records, but was denied based on the claim he was no longer a stockholder.
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