Lacos Land Co. v. Arden Group, Inc.

Briskin, the CEO of Arden Group, who had been the driving force behind the company's growth, proposed the creation of a supervoting class of stock. The stock was intended to secure Briskin's voting control over the company. In his proxy statement, Briskin asserted that stockholders should vote for the new class, and that if they didn't he wouldn't give his support to transactions for which his approval might be required. The plaintiff brought suit derivatively to enjoin the issuance of the supervoting class of stock.

An officer or director of a company cannot use threats to coerce a vote by asserting that they will act in contravention of their fiduciary duty if such vote is not so obtained. In this case, the court held that Briskin's proposal conflicted with his duty to shareholders and therefore the court granted the plaintiff's motion.

The Voting System | "One Share, One Vote" & Vote Buying