Court Opinion

ID: 9542618
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:36:39.66479+00
Date Added: 2024-06-11T15:08:27.997500
License: Public Domain

TONGUE, J.,
specially concurring.
Because of the express terms of OBS 57.136 and 57.355 I feel compelled to concur in the result reached by the majority.
The position of a minority stockholder in a small closely held corporation is at best precarious. See Baker v. Commercial Body Builders, 264 Or 614, 626-27, 507 P2d 387 (1973); Browning v. C & C Plywood Corp., 248 Or 574, 434 P2d 339 (1968). One of the hazards is that the majority may “dilute” the value of minority stock by the issuance of additional shares. See O’Neal and Derwin, Expulsion or Oppression of Business Associates: “Squeeze-Outs” in Small Enterprises ^ 4.14 (1961).
At common law the courts recognized a “preemptive” right of minority stockholders to share in the issuance of additional stock. Because of resulting problems in large publicly held corporations statutes were then enacted to limit such rights. See Note, The Preemptive Bight of Shareholders to Subscribe to New Shares, 43 Harv L Bev 586, 609-16 (1930). Unfortunately, most of such statutes, including OBS 57.-136 and 57.355, provide limitations which apply alike to the stockholders of both large publicly held corporations and small closely held corporations and fail to provide for the peculiar problems of minority stockholders of small closely held corporations. See 1 O’Neal, Close Corporations § 3.39 (1972).