Essex Universal Corporation v. Herbert J. Yates

LUMBARD, Chief Judge.

This appeal from the district court’s summary judgment in favor of the defendant raises the question whether a contract for the sale of 28.3 per cent of the stock of (a corporation is, under New York law, invalid as against public policy solely because it includes a clause giving the purchaser an option to require a majority of the existing directors to replace themselves, by a process of seriatim resignation, with a majority designated by the purchaser. Despite the disagreement evidenced by the diversity of our opinions, my brethren and I agree that such a provision does…