Browning v. C & C PLYWOOD CORP.

The issue is whether the majority shareholders lawfully can dilute a minority shareholder’s interests in a close corporation by authorizing the issuance of additional stock and then purchasing a portion of such stock.

This court has not passed upon any problem in this field. The predominant view of other jurisdictions has been expressed as follows:

“On the whole, the courts have been surprisingly reluctant to prevent the dilution of a minority shareholder’s interest through the issuance of new stock to majority shareholders at an inadequate price or at a time when the minority shareholder is…