Chapter 060

 

      Chapter 60

 

NOTES OF DECISIONS

 

In general

 

      Owner of corporate shares that does not meet definition for “shareholder” does not have statutorily created inspection rights. Yeoman v. Public Safety Center, Inc., 241 Or App 255, 250 P3d 411 (2011), Sup Ct review denied

 

 

ATTY. GEN. OPINIONS

 

Under former similar statutes (ORS chapter 58)

 

      This chapter as authorizing partnership of corporation and individual; validity of partnership between a private corporation and an individual when corporation charter so provides, (1972) Vol 36, p 94

 

LAW REVIEW CITATIONS

 

Under former similar statutes (ORS chapter 57)

 

      18 WLR 123 (1982)

 

In general

 

      24 WLR 203, 257, 275 (1988); 30 WLR 407 (1994)

 

      60.047

 

LAW REVIEW CITATIONS: 88 OLR 491, 581 (2009)

 

      60.054

 

NOTES OF DECISIONS

 

Under former similar statute (ORS 57.793)

 

      Category “persons who assume to act as a corporation,” includes those persons who have investment in organization and who actively participate in policy and operational decisions of organization. Timberline Equip. Co., Inc. v. Davenport, 267 Or 64, 514 P2d 1109 (1973)

 

      Liability for debts of de facto corporation does not apply to make promoter liable for preincorporation agreements. Sherwood & Roberts-Oregon, Inc. v. Alexander, 269 Or 389, 525 P2d 135 (1974)

 

In general

 

      Person purporting to act for corporation is not liable unless person has actual knowledge, rather than constructive knowledge, that there is no incorporation. Sivers v. R & F Capital Corp., 123 Or App 35, 858 P2d 895 (1993), Sup Ct review denied

 

      60.074

 

ATTY. GEN. OPINIONS

 

Under former similar statute (ORS 57.025)

 

      Investor-owned utility solicitation and acceptance of short-term interest-bearing investments directly from ratepayers or other persons, (1982) Vol 43, p 130

 

      60.077

 

ATTY. GEN. OPINIONS

 

Under former similar statute (ORS 57.030)

 

      Investor-owned utility solicitation and acceptance of short-term interest-bearing investments directly from ratepayers or other persons, (1982) Vol 43, p 130

 

      60.094

 

LAW REVIEW CITATIONS

 

Under former similar statute (ORS 57.045)

 

      14 WLJ 239 (1978); 62 OLR 159 (1983)

 

      60.121

 

NOTES OF DECISIONS

 

Under former similar statute (ORS 57.075)

 

      Ability to serve corporate agent is provided as convenience to plaintiff and does not preclude other means of service on corporation. Castro v. Earl Sheib of Oregon, 65 Or App 179, 670 P2d 226 (1983)

 

      60.131

 

LAW REVIEW CITATIONS: 30 WLR 223 (1994)

 

      60.151

 

NOTES OF DECISIONS

 

Under former similar statute (ORS 57.131)

 

      Plaintiff seeking to collect corporate debt from shareholder based on shareholder’s actual control over corporation must prove that plaintiff’s inability to collect from corporation resulted from improper conduct of shareholder. Amfac Foods v. Int’l Systems, 294 Or 94, 654 P2d 1092 (1982)

 

In general

 

      Controlling shareholder is not entitled to immunity for damage caused by inadequate original capitalization. Klokke Corp. v. Classic Exposition, Inc., 139 Or App 399, 912 P2d 929 (1996), Sup Ct review denied

 

      60.157

 

LAW REVIEW CITATIONS: 30 WLR 223 (1994)

 

      60.181

 

NOTES OF DECISIONS

 

      Controlling shareholder is not entitled to immunity for damage where excessive distributions leave corporation inadequately capitalized to meet normal business debts. Klokke Corp. v. Classic Exposition, Inc., 139 Or App 399, 912 P2d 929 (1996), Sup Ct review denied

 

      60.247

 

NOTES OF DECISIONS

 

Under former similar statute (ORS 57.165)

 

      Modification of quorum requirement cannot be accomplished by changing bylaws rather than articles of incorporation. Jones v. Wallace, 291 Or 11, 628 P2d 388 (1981)

 

      60.261

 

NOTES OF DECISIONS

 

      Where purchaser of stock knows or has reason to believe seller has engaged in corporate wrongdoing, purchaser is disqualified from maintaining action for damages. Damerow Ford Co. v. Bradshaw, 128 Or App 606, 876 P2d 788 (1994)

 

      Shareholder who purchased interest representing all other shares of stock was purchaser of entire corporation for purposes of determining ability to maintain action against seller. Damerow Ford Co. v. Bradshaw, 128 Or App 606, 876 P2d 788 (1994)

 

      To excuse failure to make demand, plaintiff must specify facts showing reasonable doubt either: 1) that directors are disinterested and independent for purposes of responding to demand; or 2) that challenged transaction resulted from valid exercise of business judgment. Crandon Capital Partners v. Shelk, 219 Or App 16, 181 P3d 773 (2008), Sup Ct review denied

 

      Complaint allegations that directors have undertaken defensive measures in response to pending or potential bid for control are generally sufficient to defeat motion to dismiss for failure to make demand. Crandon Capital Partners v. Shelk, 219 Or App 16, 181 P3d 773 (2008), Sup Ct review denied

 

      60.357

 

LAW REVIEW CITATIONS: 30 WLR 223, 347 (1994); 38 WLR 187 (2002); 88 OLR 491, 581 (2009)

 

      60.494

 

NOTES OF DECISIONS

 

      Where minority shareholders sought preliminary injunction concerning safeguards on sale of corporation to prospective buyer, majority shareholders’ approval of exchange of shares with buyer’s subsidiary rendered motion for preliminary injunction moot. Numrich v. Gleason, 700 F Supp 512 (D. Or. 1988)

 

      60.497

 

NOTES OF DECISIONS

 

Under former similar statute (ORS 57.480)

 

      Guaranty to subsidiary corporation survived merger and inured to benefit of surviving corporation where change did not alter guarantor’s risk. Nike, Inc. v. Spencer, 75 Or App 362, 707 P2d 589 (1985), Sup Ct review denied

 

In general

 

      Where minority shareholders sought preliminary injunction concerning safeguards on sale of corporation to prospective buyer, majority shareholders’ approval of exchange of shares with buyer’s subsidiary rendered motion for preliminary injunction moot. Numrich v. Gleason, 700 F Supp 512 (D. Or. 1988)

 

      60.551 to 60.594

 

NOTES OF DECISIONS

 

Under former similar statutes (ORS 57.865 to 57.890)

 

      In determining “fair value” of dissenter’s shares under dissenters’ rights statute, application of minority discount was not appropriate. Columbia Management Co. v. Wyss, 94 Or App 195, 765 P2d 207 (1988), Sup Ct review denied

 

LAW REVIEW CITATIONS

 

Under former similar statutes (ORS 57.865 to 57.890)

 

      18 WLR 123 (1982)

 

In general

 

      30 WLR 373 (1994)

 

      60.551

 

NOTES OF DECISIONS

 

      Fair value appreciation or depreciation in anticipation of corporate action includes all changes in value except that speculative effects of action may not be considered. Stringer v. Car Data Systems, Inc., 314 Or 576, 841 P2d 1183 (1992)

 

      60.591

 

NOTES OF DECISIONS

 

      Appraising value of shares can be meld of different approaches, and asset value, market value and enterprise value may all be considered, with weight to be determined as circumstances of case may indicate. Chrome Data Systems, Inc. v. Stringer, 109 Or App 513, 820 P2d 831 (1991)

 

      Trial court did not err in treating offer by competitor to buy assets of corporation as floor value for stock, or in setting value of stock above that floor value but below value set by appraiser based on market sales. Chrome Data Systems, Inc. v. Stringer, 109 Or App 513, 820 P2d 831 (1991)

 

      For purposes of appellate review, judicial appraisal proceeding is legal in nature. G.I. Joe’s, Inc. v. Nizam, 183 Or App 116, 50 P3d 1282 (2002)

 

      60.594

 

NOTES OF DECISIONS

 

      Where allegations show only disagreement as to price, with no allegations permitting any inference of self-dealing, fraud, deliberate waste of corporate assets, misrepresentation, or other unlawful conduct, statutory appraisal is exclusive remedy, even if majority shareholders acted arbitrarily, vexatiously or in bad faith. Stringer v. Car Data Systems, Inc., 314 Or 576, 841 P2d 1183 (1992)

 

      60.661

 

NOTES OF DECISIONS

 

Under former similar statute (ORS 57.595)

 

      In suit for oppressive conduct, court may consider equitable remedies as alternative to dissolution of corporation. Baker v. Commercial Body Builders, Inc., 264 Or 614, 507 P2d 387 (1973)

 

In general

 

      For purposes of appellate review, judicial dissolution proceeding is equitable in nature. G.I. Joe’s, Inc. v. Nizam, 183 Or App 116, 50 P3d 1282 (2002)

 

LAW REVIEW CITATIONS

 

In general

 

      71 OLR 631 (1992); 36 WLR 361 (2000)

 

      60.701

 

ATTY. GEN. OPINIONS

 

Under former similar statute (ORS 57.655)

 

      Foreign banking association that sells traveler’s checks as foreign corporation, (1973) Vol 36, p 467

 

      60.731

 

NOTES OF DECISIONS

 

      Where plaintiff employee sustained injuries in Washington while working for defendant employer, foreign corporation incorporated in Delaware, and brought action to recover in Oregon where defendant appointed registered agent, defendant’s appointment of registered agent to receive service of process as required by this section did not imply defendant’s consent to Oregon court jurisdiction. Figueroa v. BNSF Railway Company, 361 Or 142, 390 P3d 1019 (2017)

 

      60.801 to 60.816

 

LAW REVIEW CITATIONS: 30 WLR 223 (1994)

 

      60.825 to 60.845

 

LAW REVIEW CITATIONS: 30 WLR 223 (1994)

 

      60.952

 

NOTES OF DECISIONS

 

      Court not required to hold hearing on modifying terms of purchase upon receiving petition to modify such terms. Marker v. Marker, 238 Or App 65, 242 P3d 638 (2010)

 

      Where controlling shareholder of closely held corporation lawfully obtained preferred shares but engaged in self-dealing and oppressive conduct, trial court’s remedy that eliminated all voting rights from shareholder’s shares, significantly diminishing value of shares, which did not appropriately correspond to wrongful conduct as implicitly required by this section. Hickey v. Hickey, 269 Or App 258, 344 P3d 512 (2015), Sup Ct review denied

 

      If minority shareholder’s complaint does not seek relief for oppressive conduct or seek statutory remedies, even if it could support those claims and remedies, it does not trigger majority shareholder’s buyout election under subsection (6) of this section, especially where minority shareholder’s complaint arises as third-party claims defensive to majority’s squeezeout attempts. Graydog Internet, Inc. v. Giller, 362 Or 177, 406 P3d 45 (2017)