Question: Ken and Charlotte Maschmeier were the majority shareholders of Southside
Ken and Charlotte Maschmeier were the majority shareholders of Southside Press; each owned 1,300 shares. Marty and Larry Maschmeier, who each owned 1,200 shares of the corporation, had a falling out with Ken and Charlotte and were terminated as employees of the business. Ken and Charlotte started a new corporation, which employed most of the employees of the old corporation and which took most of its former customers. Gross receipts of Southside Press went from $613,258 down to $18,172 two years later. The $18,172 figure was from the lease of equipment. Ken and Charlotte continued to draw from Southside annual salaries of $20,000, which were in excess of the gross receipts of the business. Marty and Larry brought suit against Ken and Charlotte, alleging “oppressive” conduct. Ken and Charlotte stated that they had paid Marty and Larry excellent salaries when they were employed by the corporation. Ken and Charlotte contended they had a right to start a new corporation as they saw fit. Decide. [Maschmeier v. Southside Press, Inc., 435 N.W.2d 377 (Iowa App.)]
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