First National Bank of Birmingham v. Perfection Bedding Co.

FRANK M. JOHNSON, Jr., Circuit Judge:

In 1976, Perfection Bedding Company [Perfection], an Alabama corporation, was in serious financial straits with an unaudited net worth of approximately $704.04. In June, 1976, its president, Fred M. Jackson, received an offer for Perfection’s stock from National Mattress Company [National], a West Virginia corporation. Perfection’s stock was eventually sold to National for $162,000 and was transferred by a Stock Purchase Agreement [Agreement] on August 9, 1976.

Perfection had an employee pension fund that was terminated in May, 1976, prior to the…