Graham v. Louisville Transit Co.

CULLEN, Commissioner.

In an action against a representative group of its preferred shareholders, and a representative group of its common shareholders, Louisville Transit Co. and its board of directors sought a declaration as to the right of the company to pay dividends out of a surplus that was created upon the organization of the company. The circuit court held that (1) dividends accrued on the preferred stock as of October 1, 1951, may be paid out of the surplus to the extent the earnings of the company since its organization were insufficient for the purpose; (2) dividends accruing on the…