Williams v. Nevelow

REAVLEY, Justice.

Highway Drilling Company, Inc., a Texas corporation, repurchased its own stock from Harvey D. Williams. It gave a promissory note for the purchase price and executed a security agreement covering its personal property to assure payment of the note. At the time of the exchange of the promissory note for the stock, the corporation was solvent and had unrestricted earned surplus in excess of the amount of the note. After the corporation became insolvent, the holder of the note foreclosed upon certain personal property pursuant to the security agreement. The lower courts have set…