Del. Open MRI Radiology Assocs., P.A. v. Kessler, 898 A.2d 290 -- Close Corporation
This cases involves 8 total shareholders/radiologists who equally owned a practice, Fox Chase. These 8 radiologists formed a corporation, Delaware Radiology, to capture additional revenues by owning MRI centers. A squeeze-out merger at Delaware Radiology occurred after the radiologists ' underlying radiology practice, Fox Chase, split up. Delaware Radiology was divided as such: the majority (Broder Group) was made up of five, representing 62.5% and the the minority (Kessler Group) was made up of three, representing 37.5%. Due to a forced a squeeze-out merger, the Kessler Group filed suit, claiming that they did not receive fair value for their shares. The court concluded that the merger price per share was not fair to the Kessler Group. The court noted that unfairness in valuation was based in large part on the failure to include the expansion plans for three additional MRI centers, which were deemed part of the Delaware’s operations.
Schism Examples:
The Kessler Group left Fox Chase to form their own private practice, Buck County. Five of the eight owners of Delaware Radiology were now at Fox Chase, while three were at Bucks County, leaving only one of the qualified MRI readers at Fox Chase. This split …show more content…
Eventually the corporation became involved in a legal suit: the corporation was hired to by a municipality to demolish the house of someone in prison. The homeowner alleged his lawnmower was stolen. The son was advised by counsel that a settlement would be much easier and cheaper in this situation. The father outright refused to settle. While the father was away on vacation, the song settled. Thereafter the son quit working for the corporation (disputed whether he quit or was fired) but retained his shares. The father cut off dividend payments to the son. The son alleges breach of fiduciary
This cases involves 8 total shareholders/radiologists who equally owned a practice, Fox Chase. These 8 radiologists formed a corporation, Delaware Radiology, to capture additional revenues by owning MRI centers. A squeeze-out merger at Delaware Radiology occurred after the radiologists ' underlying radiology practice, Fox Chase, split up. Delaware Radiology was divided as such: the majority (Broder Group) was made up of five, representing 62.5% and the the minority (Kessler Group) was made up of three, representing 37.5%. Due to a forced a squeeze-out merger, the Kessler Group filed suit, claiming that they did not receive fair value for their shares. The court concluded that the merger price per share was not fair to the Kessler Group. The court noted that unfairness in valuation was based in large part on the failure to include the expansion plans for three additional MRI centers, which were deemed part of the Delaware’s operations.
Schism Examples:
The Kessler Group left Fox Chase to form their own private practice, Buck County. Five of the eight owners of Delaware Radiology were now at Fox Chase, while three were at Bucks County, leaving only one of the qualified MRI readers at Fox Chase. This split …show more content…
Eventually the corporation became involved in a legal suit: the corporation was hired to by a municipality to demolish the house of someone in prison. The homeowner alleged his lawnmower was stolen. The son was advised by counsel that a settlement would be much easier and cheaper in this situation. The father outright refused to settle. While the father was away on vacation, the song settled. Thereafter the son quit working for the corporation (disputed whether he quit or was fired) but retained his shares. The father cut off dividend payments to the son. The son alleges breach of fiduciary