Nuggets of Corporate Law wisdom from Professor M:
Professor M: “Minority shareholders are frequently not stupid.”
Professor M: “There are many ways to skin a cat in corporate law. Corporate lawyers are very resourceful. If a client wants something, they find a way to get it done, at least as long as it’s not blatantly unethical.”
Jill posited that shareholder agreements could be used to protect minority shareholders. Professor M didn’t buy it:
Professor M: “Okay, that’s the Kum-Ba-Yah, “gee cant we all get along” reason for this…does anyone else have something more sinister?”
Then we got to Ronnen v. Ajax:
Professor M: “I hope you all learn enough in this class to never write a shareholder agreement1 like this. You will understand why this was wrong in every way it could possibly be wrong.”
Professor M: “Do shareholders get to vote their shares in day to day operations? The answer is NO! No, no, no, no, NO! They do NOT! One of the most basic principles of this course!”
1 Ronnen v. Ajax Elec. Motor Corp., 88 N.Y.2d 582 (N.Y. 1996)