Question: Modell owned 80 percent of the Cleveland Stadium Corporation Stadium
Modell owned 80 percent of the Cleveland Stadium Corporation (Stadium) and 53 percent of the Cleveland Browns Football Company (Browns). Gries owned 43 percent of Browns. The Browns’ board consisted of Modell, the outside lawyer for both corporations, three individuals employed by both corporations, and Gries. Modell proposed that the Browns buy the Stadium for $6 million. Gries objected, saying that the Stadium appraised for only $2 million. The Browns’ board, nonetheless, approved the purchase. (All directors other than Gries voted in favor of the purchase.) Gries commenced a shareholders derivative suit seeking to rescind the purchase. Who should win?
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