Voting - Shareholder power to initiate action Flashcards
A corporation’s president must follow the __________ in its ______ relating to calling special shareholder meetings.
A corporation’s president must follow the PROVISIONS in its BYLAWS relating to calling special shareholder meetings.
Where a corporation’s bylaws require its president to call a special meeting whenever requested in writing to do so by a majority of its voting stockholders, and the president receives such a request, may the president refuse to call a meeting?
No. Where a corporation’s bylaws require its president to call a special meeting whenever requested in writing to do so by a majority of its voting stockholders, and the president receives such a request, the president may not refuse to call a meeting.
Under Delaware law, corporate shareholders have the power to remove a director for cause, but the director must be given ______ and a __________ ___________ to be heard by shareholders first.
Under Delaware law, corporate shareholders have the power to remove a director for cause, but the director must be given NOTICE and a REASONABLE OPPORTUNITY to be heard by shareholders first.
Under Delaware law, do corporate shareholders have the power to remove a director for cause?
Yes. Under Delaware law, corporate stockholders are entitled to remove directors with cause. Auer v. Dressel, 118 N.E.2d 590 (NY 1954). Even though there is some support for the contrary position and the statute does not specifically provide for director removal by stockholders, such authority must nevertheless be implied. Any other conclusion would subject corporations to great risk of harm due to director malfeasance. That risk is substantial enough to justify the right of removal even in cumulative voting situations where there is a potential for abuse in using the removal power to impede cumulative voting. Nevertheless, a director must be given notice of the charges and the opportunity to defend himself to the shareholders before he may be removed. Removal may be justified on the ground that the director engaged in “a planned scheme of harassment” that obstructed the corporation’s operation.
