Two brothers, Albert and Raymond Martin, each owned 50 percent of the stock in M

Question

Two brothers, Albert and Raymond Martin, each owned 50 percent of the stock in Martin's News Service, Inc. Albert and Raymond had difficulty working together and communicated only through their accountant. For ten years, there were no corporate meetings, no elections to the board of directors, and no observation of other corporate formalities. During that time, Raymond operated the business much as a sole proprietorship, failing to consult Albert on any matter and making all of the decisions himself. The corporation, however, was a viable concern that had grown successfully through the years. Albert filed a lawsuit seeking to have the corporation dissolved.

How would a court most likely rule in this case?

a. The court most likely refused to dissolve the corporation, because there was no shareholder agreement to dissolve the corporation. b. The court most likely dissolved the corporation, because the shareholders had been deadlocked for over ten years, during which time none of the corporate formalities had been observed. c. The court most likely refused to dissolve the corporation, because dissension between the shareholders is not a sufficient basis on which a court can order dissolution. d. The court most likely dissolved the corporation, because Albert, as a 50 percent shareholder-owner of the corporation, was entitled to have the corporation dissolved regardless of the circumstances.

Explanation / Answer

b. The court most likely dissolved the corporation, because the shareholders had been deadlocked for over ten years, during which time none of the corporate formalities had been observed

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