In France v. Southern Equipment, where a worker was seriously ...

[APUS57]

In France v. Southern Equipment, where a worker was seriously hurt on a roofing job, the courts held that the owner of the building being roofed was not responsible for the injury suffered by an employee of an independent contractor doing the roof work.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 2

Duties of Majority Shareholders. Atlas Food Systems & Services, Inc, based in South Carolina, was a food vending service that provided refreshments to factories and other businesses. Atlas was a closely held corporation. John Kiriakides was a minority shareholder of Atlas. Alex Kiriakides was the majority shareholder. Throughout most of Atlas's history, Alex was the chairman of the board, which included John as a director. In 1995, while John was the president of the firm, the board and shareholders decided to convert Atlas to an S corporation. A few months later, however, Alex, without calling a vote, decided that the firm would not convert. In 1996, a dispute arose over Atlas's contract to buy certain property. John and others decided not to buy it. Without consulting anyone, Alex elected to go through with the sale. Within a few days, Alex refused to allow John to stay on as president. Two months later, Atlas offered to buy John's interest in the firm for almost 2 million. John refused, believing the offer was too low. John filed a suit in a South Carolina state court against Atlas and Alex, seeking, among other things, to force a buyout of John's shares. On what basis might the court grant John's request? Discuss.

[rleezy04]

Answer to Question 1

TRUE

Answer to Question 2

Duties of majority shareholders
The court found that Alex had engaged in fraud and Atlas had engaged in conduct that was fraudulent, oppressive, and unfairly prejudicial toward John. Among other relief, a buy-out was ordered. On appeal, a state intermediate appellate affirmed this result. On further appeal, the South Carolina Supreme Court upheld this decision, finding that this case presents a classic example of a majority freeze-out,' and that    Atlas had engaged in conduct which was fraudulent, oppressive and unfairly prejudicial. The court remanded the case for a determination of the value of the shares, and any other damages. The court explained that a minority shareholder in a close corporation faces a potential danger the shareholder of a public corporation generally avoidsthe possibility of harm to the fair value of the shareholder's investment. At its extreme, this harm manifests itself as the classic freeze out where the minority shareholder faces a trapped investment and an indefinite exclusion from participation in business returns.    Common freeze out techniques include the termination of a minority shareholder's employment    and the removal of a minority shareholder    In a public corporation, the minority shareholder can escape such abuses by selling his shares; there is no such market, however, for the stock of a close corporation.