Evening star. [volume] (Washington, D.C.) 1854-1972, 1955-04-15
WoIfson Wins
Court Ruling
InWardCase
Decision Squoshes
Stoeeer System Of
EIeetine Directors

6tS$tiuS 6uSStOIS
SPRINGFIELD. ILL.,, April Is
(P.-The Illinois Supreme Court
today ruled in favor of Louis E.
Wolfson in his campaign to win
control of Montgomery Ward
& Co.
The decision upholds Mr..
Wolfson's contention that Wards
system of electing three of its
nine directors at annual meet
ings of stockholders was un-
constitutional.
The Supreme Courts opinion
upheld a ruling by Circuit Judge
Harry M. Fisher of Chicago.
Judge Fisher ruled that all
nine places on the Ward Board
of Directors should be at stake
in the annual meeting of share
holders next Friday in Chicago.
Mr.. Wolfson, 43 year old
Florida and New York financier.
has been battling Sewell Avery.
S1-year-old board chairman of
Wards, for control of the COM
pany.
Wolfson Halls Ruling
In New York, Mr.. Wolfson
said, 1.-THE decision is a tremen-
dous victory for corporate
democracy and removes the bar
rier which Mr.. Avery has erected
between himself and the real
owners of the business. the
stockholders.
IT am delighted that the one
man rule is a thing of the past
at Montgomery Ward. I am
now confident that we will take
control. The American courts
have upheld the democratic
corporate procedure that have
given us the opportunity to
bring to Montgomery Ward
strong, vigorous management
with the stockholders owning
their own company and having
the opportunity to change
management whenever they are
dissatisfied"
: A spokesman for Mr.. Avery
said he would not comment on
the decision until he has had
time to study it. =
. Mr.. Wolfson wanted the cleo
ton to involve all nine directors
because it would give him a
mathematical chance to elect a
majority.
Provision Is Cited
The opinion said that while
the constitutional provision
docs not expressly prohibit
staggered elections" it also does
not "foreclose a construction
which invalidates the statute au-
thorizing such election %
The court took note of Wards
argument predicting alarming
results" if Mr.. Wolfson's suit
was upheld. The court said
there are 1855 domestic corpora
tons whose securities are listed
on the major stock exchanges.
Only 1876, or lib per cent, have
classified boards of directors
elected for staggered terms.
OF this list of 1876, the court
said, only Is are Illinois cor
porations and only 6 out of the
65 major retail corporations
have staggered boards of direc-
tors.
Consequently. we do not be-
heve that the disturbance en-
visioned by appellants (Ward)
will be widespread" the court
said. Appellants also voiced
serious misgivings as to the flu
ture of corporate life and COM
mercial transactions if classified
boards are held to infringe the
constitutional right"
These fears are unwarrant-
ed" the court said.
UncOnstitutionality Upheld
The Supreme Court decided
the circuit court was correct in
holding unconstitutional section
IS of the Illinois Business Cor
poration Act. This act was the
legal foundation for the Ward
staggered system of electing
three of its nine directors each
year for three-year terms.
The opinion was written by
Justice Ray Klingbiel of East
See WOLFSON, Page ALI