Fleming v. International Pizza Supply Corp.

676 N.E.2d 1051 (Ind. 1997)


D corporation was formed by Fleming and Jensen.  Jensen voted his shares to sell the corporation, Fleming dissented and demanded for a fair valuation of his shares.


Whether Fleming can raise compensatory and punitive damages for breach of fiduciary duties and fraud, in addition to valuation of his shares.


No, summary judgment held.  The IN legislature clearly meant to reject Gabhart case law and “clearly disapproved not only the alternative dissolution remedy, but also the notion the judicial inquiry into the purpose of the merger was permitted.”  The shareholder’s right to an appraisal cannot involve enjoinment of a merger.

“…shareholders in a closely-held corporation stand in a fiduciary relationship with one another and must deal fairly, honestly, and openly with the corporation and their fellow shareholders.”  There is a separate remedy available for fraud and breach of fiduciary duty under Indiana code.  Thus, the legislature specifically limited dissenting shareholder valuation to the statutory appraisal procedure.


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