Court Of Chancery Invalidates Stock Issuance
Boris v Schaheen, C.A. 8160-VCN (December 2, 2013)
This is an example of a corporate nightmare for failing to follow the requirements to validly issue stock. Delaware law requires that the stock issuance be reflected by a "written instrument," not just some oral agreement. Moreover, the Court of Chancery will not use its equitable powers to cure a void stock issuance. Hence, the stock will be held to not exist and all the corporate acts taken in reliance of that stock being issued will be called into question.
Tags: Stockholder List
Share