May v. R.A. Yancey Lumber Corp.Annotate this Case
The Supreme Court reversed the judgment of the circuit court finding that laches barred Plaintiff’s motion for a temporary injunction, sustaining a special plea in bar, and entering judgment in favor of a Corporation, holding that the circuit court erred in its interpretation of Va. Code. 13.1-724.
Plaintiff sought a declaratory judgment that a letter of intent to sell assets of the Corporation to a third party buyer for $10 million were null and void because they violated section 13.1-724, which requires more than two-thirds shareholder approval for a disposition of of corporate assets that leaves a corporation without a significant continuing business. Plaintiff also sought a temporary injunction to stop the proposed sale until the circuit court could address the merits of the complaint. The Corporation responded by filing a special plea in bar. The circuit court denied Plaintiff’s emergency motion for an injunction, granting the plea in bar, and entered judgment in favor of the Corporation. The Supreme Court reversed, holding (1) the circuit court erred in its interpretation of section 13.1-724 and thus erred in entering judgment in favor of the Corporation; and (2) the circuit court abused its discretion when it found that laches barred Plaintiff’s request for a temporary injunction.