Brooks v. Horner

Ronald Brooks was a director and one-third shareholder of W.B.H. Corp., a closely held Alaska corporation formed in 1991. The other two shareholder-directors were Joann Horner and Helen Warner. At the times relevant to this lawsuit, the corporation’s sole asset was a group of contiguous mining claims north of Fairbanks called Bittner Lode. Despite the parties’ agreement to share costs equally, Horner and Warner for a number of years paid Brooks’s share of the annual payments necessary to maintain the mineral leases. This case arose from a dispute over the sale of a corporate asset during the winding up of the corporation. Two of the shareholders successfully bid to purchase the asset; the other shareholder claims they failed to overcome their conflict of interest and prove that the transaction was just and reasonable as to the corporation. Following trial, the superior court found in favor of the interested shareholders, in large part because the disinterested shareholder had voted to approve the transaction with full knowledge of the material facts. The disinterested shareholder (Brooks) appealed. The Supreme Court affirmed, concluding that the superior court did not clearly err in its findings of fact or err in its application of Alaska law and the corporation’s bylaws. View "Brooks v. Horner" on Justia Law