From court case: 285 A.2d 430 Andrew H. SCHNELL, Jr. and Jack Safer, Plaintiffs,

Question

From court case:

285 A.2d 430

Andrew H. SCHNELL, Jr. and Jack Safer, Plaintiffs,

v.

CHRIS-CRAFT INDUSTRIES, INC., a Delaware corporation, Defendant.

Court of Chancery of Delaware, New Castle County.

Nov. 18, 1971.

How did the Delaware Court of Chancery rule on plaintiffs’ motion for a preliminary injunction, and why did the court rule the way that it did? Please do not simply state that the plaintiffs could not satisfy the elements required for the court to grant a preliminary injunction (irreparable injury, likelihood of success, and balance of equities). Instead, your response should focus on the substantive reasons for the court’s decision.

Explanation / Answer

The Delaware Court of Chancery rule on plaintiffs' motion for a preliminary injunction by concluding that the management has used inequitable means to advance the date of annual stockholders meeting from January 11,1972 to December 8, 1971. The management has not produced a list of stockholders in the court and has not given any hint to stcokholders of the advancement of the date of the meeting. The Court observed that the management introduced an amendment to by laws in Director's meeting to advance the daye when the Stockholders wanted to proxy contest on present management by electing new directors. The Delaware corporation has suffered losses for two years and new management was to be selected by stockholders.

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