MM Companies, Inc. v. Liquid Audio, Inc.

How courts have described this case

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

• explaining that “good faith beliefs were not a proper basis for interfering with the stockholder franchise in a contested election for successor directors”
• describing the Schnell doctrine as “[o]ne of the most 41 venerable precepts of Delaware’s common law corporate jurisprudence”
• invalidating the expansion of directors from five to seven because the primary purpose of that expansion was to impede the stockholders’ right to vote effectively in an impending election for successor directors
• finding invalid a bylaw adopted “for the primary purpose of impeding and interfering with the efforts of the stockholders’ power to effectively exercise their voting rights in a contested election for directors”
• applying enhanced scrutiny to hold that directors failed to justify actions including enlargement of board and filling of vacancies in a manner that interfered with proxy contest and stockholder voting rights; reversing post-trial final judgment
• “Maintaining a proper balance in the allocation of power between the stockholders’ right to elect directors and the board of directors’ right to manage the corporation is dependent upon the stockholders’ unimpeded right to vote effectively in an election of directors.”

Source: CourtListener parenthetical corpus (CC0).