Biology Forums - Study Force

Corporate Dissolution. I. Burack, Inc, was a family-operated close corporation that sold plumbing supplies in New York. The founder and president, Israel Burack, transferred his shares in the corporation to other family members; and when Israel died in 1974, the position of president passed to his son, Robert Burack. Robert held a one-third interest in the company, and the remainder was divided among Israel's other children and grandchildren. All shareholders participated in the corporation as employees or officers and thus relied on salaries and bonuses, rather than dividends, for distribution of the corporation's earnings. In 1976, several of the family-member employees requested a salary increase from Robert, who claimed that company earnings were not sufficient to warrant any employee salary increases. Shortly thereafter, a shareholders' meeting was held (the first in the company's fifty-year history), and Robert was removed from his position as president and denied the right to participate in any way in the corporation. Robert sued to have the company dissolved because he had been frozen out. Discuss whether Robert should succeed in his suit or whether the court would choose another alternative.

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