Jack C. Schoenholtz was a shareholder and member of the board of directors of Rye Psychiatric Hospital Center, Inc. (Rye Hospital). Four years after the
Jack C. Schoenholtz was a shareholder and member of the board of directors of Rye Psychiatric Hospital Center, Inc. (Rye Hospital). Four years after the hospital was incorporated, a split had developed among the board of directors concerning the operation of the facility. Three directors stood on one side of the dispute, and three directors stood on the other side. In an attempt to break the deadlock, Schoenholtz, who owned more than 10 percent of the corporation’s voting stock, asked the corporation’s secretary to call a special meeting of the shareholders. In response, the secretary sent a notice to the shareholders, stating that a special meeting of the shareholders would be held “for the purpose of electing directors.” The meeting was held as scheduled. Some shareholders brought suit, claiming that the special shareholders’ meeting was not called properly. Who wins? Rye Psychiatric Hospital Center, Inc. v. Schoenholtz, 101 A.D.2d 309, 476 N.Y.S.2d 339, Web 1984 N.Y.ApDiv. Lexis 17818 (Supreme Court of New York)
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