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: Delaware Business Litigation ReportSupreme Court Upholds Preferred Stock Provision
By Morris James LLP
Hildreth v. Castle Dental Centers, Inc., Del. Sup. C.A. No. 195, 2007 (November 15, 2007).
A tricky issue arises when a defective certificate of incorporation causes stock to be void. Here, the preferred stock was validly authorized but there was not enough common stock to fulfill the conversion rights of the preferred. The Supreme Court held that the defect was with the common stock, not with the preferred. Hence, one defect in the "contract" will not invalidate the whole contract.
Full post as published by Delaware Business Litigation Report on November 15, 2007 (boomark / email).
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