Court Opinion

ID: 6874827
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:06:16.106967+00
Date Added: 2024-06-11T16:05:28.557854
License: Public Domain

DENMAN, Circuit Judge.
Petitioner claims that the transfer of assets from the Truck Company to the Motor Company in 1926, constituted a liquidation of the Truck Company within the meaning of the provision of its articles of incorporation reading: “* * [In] case of liquidation or dissolution of the company, [the preferred stockholders] shall be paid in full at the par value of their said shares and the accrued dividends, befo,re any amounts shall be paid to the holders of the common stock.” [Italics supplied], and hence before the instant suit was commenced that the statute of limitations had run on the obligation of the Motor Company to pay the preferred stockholders the agreed' amount.
We do not regard a transfer of all the assets upon the consideration of an issue of stock by the transferee to the transferor, the latter to become a holding company, as a liquidation of the latter company’s assets. The fact that the stock in fact never was acquired by the transferor of the assets and part was accepted by some of the stockholders of the transferor corporation does not change the transaction into a liquidation within the meaning of the latter’s corporate articles.
Petition for rehearing denied.