Opinion ID: 1059739
Heading Depth: 1
Heading Rank: 5

Heading: majority stockholders' rights

Text: We next address Willard's contention that the circuit court erred by finding that A.S. and Rose Mary could avoid the fiduciary duties they owed as directors by simply referring the asset sale to themselves as shareholders and then voting `as shareholders' to approve the transaction. Willard argues that directors cannot be allowed to abdicate their duties by replacing their director[s'] hats with their shareholder[s'] hats. With regard to the duties of majority stockholders, the circuit court determined that A.S.'s decision to vote his and Rose Mary's shares of stock to accept the revised Asset Purchase Agreement was not illegal, oppressive, fraudulent, or wasteful. Absent a violation of Code § 13.1-747, [16] the court opined that stockholders own their stock and can vote it. In Glass v. Glass, 228 Va. 39, 53-54, 321 S.E.2d 69, 78 (1984), we recognized that majority stockholders [have] rights for which they [are] entitled to protection. They [have] the right to retain their stock, to control the management of the [c]orporation, and to act together to accomplish their legitimate aims. Similarly, in Fein v. Lanston Monotype Mach. Co., 196 Va. 753, 766, 85 S.E.2d 353, 360 (1955), we stated that [t]he holders of the majority of the shares of a corporation have the right and the power, by the election of directors and by the vote of their stock, to determine the policy of their corporation and to manage and control its action. Accordingly, we conclude that A.S. and Rose Mary were entitled to exercise their rights as the majority stockholders by voting to approve the sale of assets to Capps. We agree with the circuit court's judgment that their conduct was not illegal, oppressive, or fraudulent under Code § 13.1-747. Any self-interest on the part of a majority stockholder is not a disqualification of the right to vote, in the absence of fraud or other disqualification. 196 Va. at 766, 85 S.E.2d at 360.