B. F. Rich Co. v. Gray, (Del. Supr., Sept. 11, 2007), read opinion here, is a rare decision of the Delaware Supreme Court to the extent that it reverses and remands a Chancery Court decision. (The Chancery Court’s decision was summarized on this blog here.) There is nothing unusual about the Delaware courts applying the law of another state as this one does, but since this blog focuses on Delaware law, I do not want to spend too much time on this 31-page opinion. The law of another state was applied to determine the validity of a written consent on behalf of minors (who were residents of that other state), in a Section 225 dispute.
I think the Court’s own summary of the case, from the opinion itself, serves my purpose here in describing enough about the case that the interested reader can download the entire opinion at the link above for his or her reading pleasure. Here is how the court summarized the case:
Two minor children, who reside in Connecticut, own 49% of the stock of a Delaware corporation. The father of those minor children voted that stock to gain operational control of that corporation without having first been appointed as guardian of his children’s estate (property). A Connecticut statute requires the appointment of a guardian of a minor’s estate where a parent receives or uses property of the minor child having a value exceeding $10,000. The value of the minor children’s shares exceeds $10,000. The sole question of substance on this appeal is whether the father’s voting of the minor children’s shares constituted a “use” of those shares within the meaning of the Connecticut guardianship statute, thus requiring the appointment of a guardian of the minor children’s estate to vote the shares. We hold that the father’s voting of those shares constituted a “use” of the shares within the meaning of that statute. As a consequence, the voting of the children’s shares by anyone other than a court-appointed guardian was invalid, with the result that less than a majority of the corporation’s shares were validly voted and the written consent action had no legal force. Because the Court of Chancery reached a contrary result, we reverse and remand.