Coggins v. New England Patriots Football Club, Inc.
Supreme Judicial Court of Massachusetts
492 N.E.2d 1112 (Mass. 1986)
After being voted out as president of the New England Patriots, William Sullivan reacquired all 100,000 voting shares, then merged the Patriots into a newly formed corporation, New Patriots, structured to cash out all nonvoting shareholders — including David Coggins (plaintiff), who owned 10 nonvoting shares — while consolidating Sullivan's control and using loans secured by diverting the franchise's income to repay them. Coggins voted against the merger and sued, claiming it was unfair and illegal; the trial court found for Coggins and awarded rescissory damages, and the Patriots appealed.
Whether a freeze-out merger consummated solely for the personal gain of the president of the merging corporations is legal.