Melrose v. Capitol City Motor Lodge, Inc.

SULLIVAN, Justice.

After a closely held corporation decided to liquidate, Smulyan, a director-shareholder, sought to purchase corporate-owned insurance policies on his life for their cash surrender value. Melrose, another director-shareholder, objected on grounds that Smulyan’s life expectancy made the policies far more valuable than their cash surrender value. The trial court held that Smulyan’s purchase did not violate his statutory or fiduciary duties to the corporation. We agree and affirm.

Background

Three shareholders, Smulyan, Melrose and Rowley, owned all of the issued and outstanding…