Murdock. v. Follansbee Steel Corp.

KALODNER, Circuit Judge.

Is a beneficial owner of stock registered for business convenience in another’s name a “holder” of such stock within the purview of a state statute requiring, in certain circumstances, posting of security for expenses in a shareholder’s derivative action?

That is the primary issue, of first impression, presented by this appeal.

The undisputed facts may be summarized as follows:

The plaintiff, Rex Murdock, a resident of New Mexico, owned more than five per cent of the stock of the corporate defendant, Follansbee Steel Corporation (“Fol-lansbee”), a Delaware corporation.…