Clarke v. Greenberg
New York Court of Appeals
71 N.E.2d 443 (1947)
Relevant factsFree
Greenberg (defendant), a shareholder of AGECO, brought a derivative suit on the corporation's behalf against AGECO's directors. Before trial, Greenberg privately settled: he released the claims and sold his stock (worth $51.88) back to the corporation for $9,000. AGECO's trustee (plaintiff) sued Greenberg to force an accounting of that $9,000 settlement payment to the corporation. The trial court dismissed the trustee's complaint, and the appellate court affirmed.
IssueFree
Whether a plaintiff in a shareholder derivative suit must account to the corporation for money he receives in a private settlement of the suit.