J corporation held an ordinary general meeting to approve the balance sheet and to elect directors and auditors. The resolutions passed at the meeting, but J corporation didn't confirm the quorum, what was worse, it didn't put to a vote and disregarde...
J corporation held an ordinary general meeting to approve the balance sheet and to elect directors and auditors. The resolutions passed at the meeting, but J corporation didn't confirm the quorum, what was worse, it didn't put to a vote and disregarded minority shareholders demand for speaking. One shareholder who demand to speak, filed suit for revoking the resolution. Thereafter the corporation had faced a financial crisis, so the plan for business rationalization was made by the board whose numbers had been elected at that meeting. And due to the support of the government and Bank of Korea, J corporation has performed that plan and successfully overcome the crisis.
The court has dismissed the suit on the ground that revoke of the resolution could have led to not only the loss of corporation and shareholders but also the uncertain of business relation.
I think this decision was inadequate because the resolution had cause of action in point that the corporation didn't confirm the quorum, put to a vote and disregarded shareholders right to speak at the meeting. Rather than dismissal, court should have decided the case in favor of the plaintiff. It is a rule that decision for revoke has retroactivity, accordingly it makes resolution void at that time of passing. However the retroactivity should be restricted when the protection of third party is needed.