Beal Bank v. Westpoint

Summary

This case involves Beal Bank, a lender, that sought assistance in Chancery Court to vindicate its rights as an alleged shareholder. Beal Bank entered into a Stock Pledge Agreement that allowed it to take shares in the debtor as security upon default. When the debtor filed bankruptcy, a federal statute prevented the enforcement of that Stock Pledge Agreement, thus preventing Beal Bank to register the shares in its name. An auction of the debtor took place and the Bankruptcy Court entered a Sale Order authorizing the sale of substantially all of the debtor's assets.

Here, Beal Bank asserts that the actions of the debtor's board after the sale were breaches of their fiduciary duties which forced them into a minority position and diluted their value.