to prevail on the law and the facts in its eventual outcome; second, whether on the equities, sometimes referred to as balance of convenience, the plaintiff should receive the drastic remedy of a preliminary injunction. This aspect of the matter is directed to the discretion of the court of equity.
Going to the first question, it is somewhat difficult to discern what exactly is the cause of action that the plaintiff seeks to assert. In part, it seems to be that his demand to see and examine the record of the list of stockholders was not complied with. It is not disputed, however, that he was informed that such a list might be obtained for a fee from the transfer agent of the company. Then he complains of the fact that the present directors have suggested the names of six of their number as candidates for election and are soliciting proxies accordingly. The Court finds no illegality or fraud or any other taint or infirmity in the fact that the present Board of Directors determined to propose six of their number for reelection. There is an allegation that they have not given sufficient consideration to the question whether some outsiders should be designated. On the other hand, it is asserted by the defendants that they did consider the question and determined not to bring in outsiders. In any event, in the absence fo any proof to the contrary, and there is none here, the question was solely a matter of business judgment on the part of the present Board of Directors, which is not subject to judicial review. This Court may not substitute itself for the Board in determining matters of internal management of the corporation, unless there is some violation of law or fraud. None is perceived here. It is of interest in this connection to observe that there has been no concealment of the intention of the Board to suggest some of their own number for reelection, for as far back as the preliminary prospectus dated May 6, 1964, it was stated that it was the intention of the Board of Directors to select six of their number for submission to the stockholders for reelection. This statement is repeated in the final prospectus issued in June. The Court is unable to discern anything reprehensible or even subject to criticism in the fact that the Board proposed six of their number for reelection.
Accordingly, it is the view of this Court that no cause of action has been established or is likely to be established by the plaintiff.
Even aside from this consideration, we must proceed to the second aspect of this application, namely, whether in the exercise of its discretion the strong arm of equity should be exerted by the Court to restrain and enjoin the holding of the scheduled meeting. This is a matter addressed to the discretion of the Court and is governed by equitable considerations. This corporation has 130,000 shareholders in round figures. It has five million shares of stock of Series I and a like amount of Series II, or a total of ten million shares of stock outstanding. The plaintiff is a stockholder owning only 210 shares, or stock of the value of $ 4,200. This disproportion is a matter that the Court may well consider in determining the equities of the present application. On the other hand, the corporation has gone to considerable expense in sending out notices and proxies for the meeting. A considerable number of shareholders have replied that they will be personally present and are planning to do so. It would obviously be a great inconvenience and an unnecessary expense to the corporation and the stockholders who intend to be present if this Court were to stay the holding of the meeting.
Beyond that, this corporation, as plaintiff's counsel quite correctly pointed out, though principally a private corporation in the method of its organization and financing, has a public interest. The public, and specifically the Government, has an interest in its activities, and it is in the public interest that the business of the corporation should proceed.
In view of these considerations, the motion for a preliminary injunction will be denied.
A transcript of this oral opinion will constitute the findings of fact and conclusions of law.
Counsel may submit an appropriate order.
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