CTS Corp. v. Dynamics Corp. of Am.

481 U.S. 69

 

RULE:

The Williams Act does not pre-empt the Control Share Acquisitions Chapter of the Indiana Business Corporation Law.

FACTS:

Appellant, an Indiana corporation, challenged a decision of the Court of Appeals that affirmed a decision in favor of appellee national corporation finding that the Williams Act pre-empted the Control Share Acquisitions Chapter of the Indiana Business Corporation Law. Appellee announced that it would purchase one million shares of common stock, which would increase its ownership in appellant. Appellant's board of directors elected to be governed by the Control Share Acquisitions Chapter of the Indiana Business Corporation Law. The trial court found in favor of appellee and the appellate court affirmed.

ISSUE:

Whether the Control Share Acquisitions Chapter of the Indiana Business Corporation Law determined the voting rights of shares of corporations?

ANSWER:

Yes.

CONCLUSION:

The Supreme Court found probable jurisdiction and reversed the appellate court's decision. The Court found that the Act evenhandedly determined the voting rights of shares of corporations and that the Act did not conflict with the provisions of purposes of the Williams Act. Therefore, the Court found that the Act was not pre-empted by the Williams Act.

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