The Court of Chancery confirmed that a majority shareholder’s amendments to expand the board of directors in order to regain corporate control were valid, despite a provision in the company’s bylaws requiring a supermajority vote.
The majority shareholder succeeded by shrewdly finding a loophole in order to accomplish what only a supermajority vote, without his strategic maneuvering, could have done. Chancellor William B. Chandler III found the moves were legitimate when he issued a summary judgment in favor of the plaintiff in Sam J. Frankino v. John A. Gleason, National Auto Credit Inc., et al.
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