Blasius Industries, Inc. v. Atlas Corp.

How courts have described this case

Verbatim parenthetical descriptions written by other courts when citing this decision. Ranked by citation-network relevance.

• recognizing that if the board acts for the primary purpose of impeding stockholders’ franchise rights, the board must prove a “compelling justification” for its actions
• recognizing that “[t]he shareholder franchise is the ideological underpinning upon which the legitimacy of directorial power rests”
• holding that a board act done with care and in good faith but “for the primary purpose of preventing or impeding an unaffiliated majority of shareholders from expanding the board and electing a new majority” is invalid
• stating that “absent fraud, or breach of duty, effect must be given to properly submitted proxies that are not inconsistent”
• stating that a court may infer that the board breached its fiduciary duties when it adopts a bylaw with “the primary purpose of impeding the exercise of stockholder power”
• finding that if it were shown to be “factually true” that board actions “were pretexts for entrenchment for selfish reasons” then “one would not need to inquire further” because such an action “would constitute a breach of duty”

Source: CourtListener parenthetical corpus (CC0).