SEVEN SPRINGS FARM, INC., A PENNSYLVANIA CORPORATION, Appellee v. LYNDA M. DUPRE CROKER, Appellant. LYNDA M. DUPREE, ON BEHALF OF THE PHILLIP DUPRE FAMILY, Appellant v. SEVEN SPRINGS FARM, INC., ALONG WITH CERTAIN OF ITS DIRECTORS, JAMES M. CROWLEY, DENISE M. DUPRE, JAMES M. MCCLURE, JOYCE S. MONIGAL, RICHARD G. PATTON, CHARLES N. SANTRY, FRANK S. SUJANSKY, AND JAMES V. SUJANSKY, Appellees., 569 Pa. 202

Summary

Owners of two-thirds of the corporation's shares voted to approve a proposal in which the corporation would be the surviving entity after it merged with another company's subsidiary; the corporation's shares would be converted into cash. The shareholder, one of the third of the stockholders that voted against the merger, claimed the merger triggered the right of first refusal in the shareholders' buy-sell agreement. The lower courts disagreed, as did the supreme court. Merger was a corporate act, not a shareholder act, and therefore did not fall within the buy-sell agreement's restrictive transfer provisions. It rejected the claim that language in the buy-sell agreement that barred the corporation from "transferring stock in violation of the agreement" prohibited the merger. As restrictive transfer provisions were strictly construed, this generic language would not be read so broadly as to prohibit statutorily-sanctioned mergers. That the stockholders had to vote on the merger did not ...