Del. Code Ann. tit. 8, § 211(b) contains a mandatory requirement that every Delaware corporation shall hold an annual meeting of stockholders for the election of directors. Section 211(c) confers authority upon this court to order that such an annual meeting be convened when a plaintiff demonstrates that (1) he is a shareholder of the company and (2) no annual meeting has been held within 30 days of the date designated therefor or, if no date had been set, for 13 months since the last annual meeting. Proof of these two statutory elements has been said to constitute a prima facie case for relief.
Speiser, a shareholder, brought an action seeking to compel Health Med Corporation to hold its annual shareholders meeting. The trial court granted Speiser's motion for a judgment on the pleadings, holding Health Med Corporation had not presented any facts defeating the Speiser's prima facie case that a meeting should have been held under Del. Code Ann. tit. 8, § 211. However, the stockholder also sought to dismiss the corporation's affirmative claim for relief.
Should Speiser’s motion to dismiss Health Med Corporation's affirmative claim for relief be granted?
The court denied the shareholder's motion to dismiss the corporation's affirmative claim for relief, holding that the shareholder invested the capital of another corporation into the corporation for the specific purpose of controlling the other corporation. This action was contrary to Del. Code Ann. tit. 8, § 160. Also, the shareholder exercised his power as a director solely for his personal benefit and not for the benefit of the corporation.