URT INDUSTRIES, INC., A FLORIDA CORPORATION, APPELLANT,
v.
SCORPIO MUSIC, INC., A NEW JERSEY CORPORATION, APPELLEE
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URT Industries appeals an order granting its shareholder Scorpio Music's motion for partial summary judgment requiring production of corporate books and records for inspection under Florida law. The court affirmed, holding that a qualified shareholder acting in good faith is entitled to inspect corporate records to determine stock value and whether corporate affairs are being properly administered.
The court held that Scorpio, as a qualified shareholder acting in good faith, was entitled to inspect URT's corporate records including income tax returns, general ledger, balance sheets, profit and loss statements, stock book, and shareholders' list to determine actual corporate stock value and whether corporate affairs were being properly administered.
[1] A shareholder who owns in excess of five percent of the outstanding shares of a corporation for more than six months, and who has submitted a written demand, is entitled…
[2] A shareholder is entitled to inspect corporate income tax returns, general ledger, balance sheets, profit and loss statements, and stock book to determine the actual corp…
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Join FLexlaw to unlock all legal intelligence“a stockholder was entitled to inspect the corporation's income tax returns, general ledger, balance sheets, profit and loss statements and stock book to determine the actual corporate stock value”
Establishes the scope of inspection rights available to qualifying shareholders under controlling precedent (Jewelers Int'l Showcase)
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Join FLexlaw to unlock all legal intelligenceScorpio Music, a shareholder owning more than five percent of URT Industries' outstanding shares for over six months, alleged that URT's chairman purc…
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PER CURIAM.
URT Industries, Inc. appeals an order granting Scorpio Music, Inc.’s motion for partial summary judgment requiring URT to produce its corporate books and records for inspection by Scorpio pursuant to section 607.157(4), Florida Statutes (1987). The order has been stayed pending the outcome of this appeal.
Scorpio Music, Inc., a shareholder in URT Industries, Inc., alleged that the chairman of URT purchased URT stock below market price with funds loaned to him by the company at a low interest rate and that URT has supplied misinformation in the annual report as to how class A and class B stock is voted. Scorpio, through its president, John Gervasoni, further alleged that, as a shareholder owning in excess of the statutory requirement of five percent of the outstanding shares of the corporation for a period of more than six months, and having submitted the necessary written demand, it is entitled to inspect the corporate records in order to ascertain the value of URT’s stock and to determine whether corporate affairs are being properly administered.
The trial court granted Scorpio’s request on the authority of Jewelers Int’l Showcase, Inc. v. Mandell, 529 So. 2d 1211 (Fla. 3d DCA 1988), where we held, on similar facts, that a stockholder was entitled to inspect the corporation’s income tax returns, general ledger, balance sheets, profit and loss statements and stock book to determine the actual corporate stock value. Mandell is controlling. See also State ex rel. Fussell v. McLendon, 109 So. 2d 783 (Fla. 3d DCA 1959). The grant of Scorpio’s request for a shareholders’ list in order to communicate with other shareholders was also proper. See e.g., Western Air Lines, Inc. v. Kerkorian, 254 A. 2d 240 (Del.1969) (a stockholder of record has the right to an inspection of the list of stockholders for any purpose “reasonably related” to his interests as a stockholder). See generally H.G. Henn Law of Corporations, § 199 (1983). There is competent and substantial evidence in the record in support of the trial judge's determination that the shareholder is acting in good faith as required by section 607.157(5), Florida Statutes (1987).
Appellant’s claims of procedural error are without merit.
Affirmed.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
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Computer Solutions, Inc. v. Gnaizda, 633 So. 2d 1100 (Fla. 3d DCA 1994)…ntal premise, that section, enacted following the repeal of section 607.157, Florida Statutes (1989), does not overrule Jewelers Int’l Showcase, Inc. v. Mandell, 529 So. 2d [*1103] 1211 (Fla. 3d DCA 1988) and URT Indus., Inc. v. Scorpio Music, Inc., 567 So. 2d 1 (Fla. 3d DCA 1990), review denied, 581 So. 2d 1311 (Fla.1991). Section 607.157(4), Florida Statutes (1989), permitted the examination of the corporation’s “relevant books and records of accounts, minutes, and record of shareholders .... ” Section 60…1 / 2
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Rhona Ottolina v. Miller Lakes Assocs., 717 So. 2d 550 (Fla. 3d DCA 1998)…e requested additional records is shown by the affidavit of the shareholder’s accountant, and, therefore, those records must be produced. See Computer Solutions, Inc. v. Gnaizda, 633 So. 2d 1100 (Fla. 3d DCA 1994); URT Indus. v. Scorpio Music, Inc., 567 So. 2d 1 (Fla. 3d DCA 1990), rev. denied, 581 So. 2d 1311 (Fla.1991). The trial court erred in determining otherwise. Reversed and remanded for further consistent proceedings.…
Authorities Cited
- Rutang Corp. v. Miami Fin. Corp., 109 So. 2d 783 (Fla. 3d DCA 1959)
- Jewelers Int'l Showcase, Inc. v. Mandell, 529 So. 2d 1211 (Fla. 3d DCA 1988)