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The plaintiff, who owns 11,000 common shares of the defendant corporation, is suing on behalf of the corporation for losses and gains resulting from various transactions. The plaintiff seeks the appointment of a liquidating receiver due to gross mismanagement and corporate purpose distortion by the defendant, who has a majority of common and preferred shares with voting rights and controls the corporation. The defendant wrongfully carried out several acts, such as decreasing the board of directors, transferring funds to accounts in Switzerland, and making investments in projects that caused losses. The plaintiff is looking to recover the profit earned by the defendant from selling a New York Stock Exchange seat. Additionally, there is an accounting request for an alleged wrongful corporate gift of $528,000 to the Alexander Dawson Foundation. An accounting from the defendant is also sought because of breaches of fiduciary duty regarding the purchasing and selling of a seat on the New York Stock Exchange and the charitable gift of shares of stock to the Alexander Dawson Foundation. The defendant's former spouse possesses preferred shares and receives dividends on them. The corporation has been working as a personal holding company since 1935 and has a net worth of roughly $150,000,000. Henderson, the defendant, violated the Delaware Corporation Law by drawing a corporate cheque to his order in the amount of $25,000, which is forbidden by law. He borrowed $85,000 more from the corporate defendant and passed on the money to the Stock Exchange, using his personal account and not that of the corporate defendant. Henderson, as the president and majority stockholder of the corporate defendant, had a duty not to place his own interest above that of the corporation and to refrain from enriching himself. Therefore, he is not entitled to the protection of the business judgment rule. Henderson must account for any profits made by him in the sale of the Stock Exchange seat and for any brokerage commissions not already remitted to the corporation.
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