Henry v. Phixios Holdings, Inc.
Delaware Court of Chancery
2017 WL 2928034 (2017)
Phixios Holdings, Inc. (defendant) adopted a stockholder-agreement provision letting a majority of stockholders revoke a stockholder's shares if he acted in ways damaging to the company. That restriction was never noted on Jon Henry's (plaintiff) stock certificate, and he had no knowledge of it when he bought his shares; he later learned of it but never agreed to be bound by it. After Phixios accused Henry of trying to compete with the company, it rescinded his stock under the restriction and then denied him access to company books and records, claiming he was no longer a stockholder. Henry sued for a declaration that the restriction didn't apply to him and that he remained a stockholder.
Whether a stockholder is bound by a stock-transfer restriction that is not noted on his stock certificate when he had no actual knowledge of the restriction before acquiring the stock and never affirmatively assented to it afterward.