Superior Vision Services, Inc. v. ReliaStar Life Insurance Company
Delaware Court of Chancery
2006 WL 2521426 (2006)
ReliaStar Life Insurance Company (defendant), a 44 percent shareholder of Superior Vision Services (SVS) (plaintiff), held a contractual veto over dividend payments that could only be waived with two-thirds consent of the purchased securities' interests, meaning ReliaStar's consent alone was necessary for any waiver. When SVS's board approved a policy to pay dividends, ReliaStar withheld its consent and blocked implementation, prompting SVS to seek a declaration that ReliaStar breached fiduciary duties by refusing to consent; ReliaStar moved to dismiss.
Whether a minority shareholder that exercises a contractual right effectively restricting a corporation's actions is automatically considered a controlling shareholder bound by fiduciary duties.