Garrett v. Edge Moor Iron Co.

The Chancellor:

The provision for payment to the preferred stockholders in event of liquidation, found in paragraph B of the charter, is that they shall receive the par value of their shares “with all unpaid dividends thereon.” It is this phrase that gives rise to the controversy.

The preferred stockholders contend that the omission of the company to pay dividends to them since October 1, 1931, must now be repaired out of the assets regardless of whether or not those assets contain surplus above capital, and regardless of whether or not the dividends provided by the charter were cumulative or…