Perlman v. Feldmann
United States Court of Appeals for the Second Circuit
219 F.2d 173 (2d Cir. 1955)
Russell Feldmann (defendant) was the majority shareholder of Newport Steel Corporation, and during a Korean War-era steel shortage that made Newport highly valuable, he sold his controlling interest to Wilport Company for an unusually large premium. Minority shareholders (plaintiffs) brought a derivative suit, arguing the premium reflected Newport's corporate power to control scarce steel production — an asset Feldmann held in trust for the corporation as its fiduciary, not something he could personally cash out.
Whether minority stockholders are entitled to share in a premium paid for a controlling interest in a corporation where that premium reflects the corporation's own valuable market power rather than the ordinary value of the shares.