Appeal, No. 279, Jan. T., 1958, from decree of Court of Common Pleas of Luzerne County, May T., 1958, No. 4, in equity, in case of Stephen A. Farris v. Glen Alden Corporation et al. Decree affirmed.
Arthur Littleton, with him Franklin B. Gelder, J. Julius Levy, W. James MacIntosh, and Morgan, Lewis & Bockius, for appellants.
Henry Thalenfeld, with him Michael H. Sheridan, for appellee.
John Mulford, Chairman, and William P. Hackney and Carroll R. Wetzel, filed a brief for Committee on Corporation Law of Pennsylvania Bar Association, amicus curiae, pursuant to Rule 46.
Before Jones, C.j., Bell, Musmanno, Arnold, Jones and Cohen, JJ.
OPINION BY MR. JUSTICE COHEN
We are required to determine on this appeal whether, as a result of a "Reorganization Agreements" executed by the officers of Glen Alden Corporation and List Industries Corporation, and approved by the shareholders of the former company, the rights and remedies of a dissenting shareholder accrue to the plaintiff.
Glen Alden is a Pennsylvania corporation engaged principally in the mining of authracite coal and lately in the manufacture of air conditioning units and firefighting equipment. In recent years the company's operating revenue has declined substantially, and in fact, its coal operations have resulted in tax loss carry overs of approximately $14,000,000. In October 1957, List, a Delaware holding company owning interests in
motion picture theaters, textile companies and real estate, and to a lesser extent, in oil and gas operations, warehouses and aluminum piston manufacturing, purchased through a wholly owned subsidiary 38.5% of Glen Alden's outstanding stock.*fn1 This acquisition enabled List to place three of its directors on the Glen Alden board.
On March 20, 1958, the two corporations entered into a "reorganization agreement," subject to stockholder approval, which contemplated the following actions:
1. Glen Alden is to acquire all of the assets of List, excepting a small amount of cash reserved for the payment of List's expenses in connection with the transaction. These assets include over $8,000,000 in cash held chiefly in the treasuries of List's wholly owned subsidiaries.
2. In consideration of the transfer, Glen Alden is to issue 3,621,703 shares of stock to List. List in turn is to distribute the stock to its shareholders at a ratio of five shares of Glen Alden stock for each six shares of List stock. In order to accomplish the necessary distribution, Glen Alden is to increase the authorized number of its shares of capital stock from 2,500,000 shares to 7,500,000 shares without according pre-emptive rights to the present shareholders upon the issuance of any such shares.
3. Further, Glen Alden is to assume all of List's liabilities including a $5,000,000 note incurred by List in order to purchase Glen Alden stock in 1957, outstanding stock options, incentive stock options plans, and pension obligations.
4. Glen Alden is to change its corporate name from Glen Alden Corporation to ...