Opinion ID: 2758887
Heading Depth: 2
Heading Rank: 1

Heading: The Company and the Parties

Text: Westech, which was founded in 1994 and became a public company in 2001, is a holding company with one primary operating subsidy, a broker-dealer named Tejas Securities Group, Inc. (“Tejas”). Gorman was one of seven founding members of Westech, and served as the chairman of Westech’s Board from 1999 through August 2013. He was also the majority stockholder of Westech common stock and of the total voting shares at all relevant times. Westech has two classes of stock authorized and outstanding: 4,031,722 shares of common stock, and 338 1 The relevant facts are drawn from the record and the Court of Chancery’s Memorandum Opinion. In re Westech Capital Corp., 2014 WL 2211612 (Del. Ch. May 29, 2014) [hereinafter Westech]. 3 shares of Series A Preferred Stock. The Series A Preferred Stock votes together with the common stock on an as-converted basis, and each share of Series A Preferred Stock is entitled to cast 25,000 votes. According to the parties’ pre-trial stipulation, Gorman owns, directly or indirectly, approximately 2.4 million shares of common stock (or nearly 60% of Westech’s common stock outstanding), and approximately 173 shares of Series A Preferred Stock (or 51% of the 338 shares outstanding). 2 Because Westech’s Series A Preferred stockholders have 25,000 votes for every one share of Series A Preferred Stock, Gorman holds nearly 54% of Westech’s total voting power. Neither Dura nor Salamone has ever owned Westech stock. Dura, who served as interim Chief Executive Officer (“CEO”) before Salamone, was elected to the board in late 2012.3 Salamone became CEO of Westech sometime in early 2013, and has served on the board since that time. Halder has been involved with the company since 2002. He has served as President and acting Chief Operating Officer (“COO”) of Westech, and interim COO of Tejas. He was also elected to Westech’s board in or around 2009.4 He owns, directly or indirectly, nine shares 2 App. to Appellee’s Answering Br. and Cross-Appellant’s Opening Br. at B4. 3 The previous CEO, James B. Fellus, was terminated in October 2012, according to Anthony Peter Monaco’s deposition testimony. App. to Appellant’s Opening Br. at A1057. Gorman testified that he discussed having Dura join the board in August 2012, before Dura became an employee of Westech. App. to Appellant’s Opening Br. at A1230. 4 Halder could not recall during his deposition the exact date he was elected to the Board. App. to Appellant’s Opening Br. at A804-05. 4 of Series A Preferred Stock in the company. Halder resigned as a Westech employee in June 2014.