Court Opinion

ID: 9703742
Source: CourtListenerOpinion
Date Created: 2023-08-26 00:06:24.975592+00
Date Added: 2024-06-11T18:21:51.486611
License: Public Domain

Concurring and Dissenting Opinion by
Mr. Justice Cohen:
I agree that this appeal should be quashed because of the failure of the plaintiff to join an indispensable party. I do not agree Avith the dicta in the majority’s opinion wherein the majority discusses the merits of the controversy. It is for this reason that I feel compelled to express my views on the merits.
*327The record presents the following set of circumstances :
General Outdoor Advertising Company, Inc. owned a majority of the issued and outstanding common stock of the Pittsburgh Outdoor Advertising Company. (9,-252 of a total of 15,000). As a result of a consent decree entered against General in the United States District Court for the Northern District of Illinois, it became necessary for General to dispose of its holdings in Pittsburgh. The Board of Directors of Pittsburgh, three of whom were officers or directors of General and all of whom were elected by General, chose to purchase all of General’s stock in Pittsburgh. Pittsburgh did not have sufficient cash or liquid assets to accomplish the purchase so it pledged substantially all of its assets to the Equitable Life Assurance Society in order to borrow the necessary funds. I feel that whenever a corporation offers to purchase all of the shares of the majority or all the shares of a controlling interest in a corporation, the corporation is obligated to offer to acquire, at the same price, all the shares of any dissenting shareholder or group of shareholders.
Fair dealing, fiduciary responsibility, and the direct obligation of loyalty owed to all the shareholders, would dictate that a shareholder Who did not want to go along with this “bale-out” of the majority should be given the option of disposing of his shares on the same terms and on the same conditions as the retiring majority. Otherwise, the majority shareholders would have at their command a ready purchaser (the corporation) for their holdings — a market that is denied to the minority. And what is even more important, when the corporate market is created by the majority shareholder as it was in the instant case, it becomes more difficult for the minority to dispose of its holdings since the corporation’s liquid assets have been depleted to *328provide the purchase price for the majority stock. In addition to eliminating the element of unfairness that may or may. not exist when the majority “bales” itself out, the extension of the same offer of purchase to the minority would eliminate the difficult proof problem of breach of fiduciary duty or of anticipated future harm to the eorpoi*ation, and also would prevent disputes over what a proper sales price for the stock would be. It might be argued that this offer may force the dissolution of the corporation in some cases. That is all the more reason why the majority should not be permitted to liquidate its holdings through the utilization of the corporate assets without also extending the same opportunity of sale to the minority shareholder. Here the majority stockholder has abandoned its fiduciary responsibility to the minority and this Court should not, even by way of dicta, countenance such action.
Mr. Justice McBride joins in this concurring and dissenting opinion.