a. Why did Tramontana call a directors meeting?
b. Why did May and her faction refuse to attend the meeting?
c. What were the quorum requirements for a directors meeting?
d. Were five directors present?
e. For a written consent to be valid, how many directors had to sign?
f. Did Tramontana know this interesting fact?
g. Was the court sympathetic to Tramontana?
h. Then why did the court hold that the meeting was invalid?
Cynthia May was Bigmar's president and a director of the company. She took control of the company's financial records and refused to give the company's founder, John Tramontana, any information. With the company in desperate financial shape, Tramontana managed to find a bank willing to buy $1 million of Bigmar stock. He called a special meeting of the board of directors to approve the sale of shares and to fire May. The meeting was to take place by telephone. To establish a quorum necessary for the meeting to be valid, at least five of the nine directors would have to take part. May and her three allies on the board refused to participate.
Tramontana testified that, at the appointed time, he met with two directors in his office. They used a speaker feature on a cell phone to call two other directors, one of whom was in Heathrow airport in London. The five directors unanimously resolved to issue the stock to the bank. Tramontana and May went to court to determine if the directors' meeting was valid and the bank entitled to the shares.