Moto Inc. operates gasoline convenience stores throughout the American Midwest. It does business as MotoMart. In June

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Moto Inc. operates gasoline convenience stores throughout the American Midwest. It does business as MotoMart. In June 2011, the collective owners of at least 20 percent of Moto, Virgil Kirchoff, Kirchoff LP, and the Virgil Kirchoff Revocable Trust, launched a suit against Moto seeking corporate dissolution based on minority shareholder oppression. The plaintiffs asserted that by arbitrarily valuing its stock and failing to inform minority shareholders of Casey’s General Stores, Inc.’s interest in acquiring Moto. The trial court granted Moto summary judgment and the plaintiffs appealed. According to the appellate court, to fulfill a shareholder oppression claim, a claimant must show “(1) burdensome, harsh, and wrongful conduct; (2) a lack of probity and fair dealing in the affairs of the company to the prejudice of some of its members; or (3) a visible departure from the standards of fair dealing and a violation of fair play on which every shareholder is entitled to rely when entrusting her money to a company.” In its appeal, the plaintiffs-now-appellants argued the trial court should not have granted Moto summary judgment because Moto had a fiduciary duty to use reasonable care in evaluating its stocks and there was enough prima facie evidence showing Moto failed to exercise reasonable care. Suppose the appellate court accepted the appeallants’ argument that there was a genuine dispute of material fact about Moto’s actions. Would Moto’s lack of reasonable care fulfill the three requirements of a shareholder oppression claim quoted above? Why or why not? List examples of evidence appellants could show to meet the criterion.

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Dynamic Business Law The Essentials

ISBN: 9781260253382

5th Edition

Authors: Nancy Kubasek, M. Neil Browne, Daniel Herron, Lucien Dhooge, Linda Barkacs

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