ASSIGNMENT
1. Donald J. Richardson, Grove L. Cook, and Wayne Weaver were stockholders of Major Oil. They brought a direct action, individually and on behalf of all other stockholders of Major, against certain directors and other officers of the corporation. The complaint stated twelve causes of action. The first eight causes alleged some misappropriation of Major’s assets by the defendants and sought to require the defendants to return the assets to Major. Three of the remaining four causes alleged breaches of fiduciary duty implicit in those fraudulent acts and sought compensatory or punitive damages for the injury that resulted. The final cause sought the appointment of a receiver. Richardson, Cook, and Weaver moved for an order certifying the suit as a class action. Decision?
3. Horton owned one hundred twelve shares of common stock in Compaq Computer Corporation (Compaq), a Delaware corporation. Horton and seventy-eight other parties sued Compaq, fifteen of its advisers, and certain management personnel, alleging that Compaq and its codefendants had (1) violated the Texas Security Act and the Texas Deceptive Trade Practices Consumer Protection Act and (2) committed fraud and breached their fiduciary duty. All these claims arise from the contention that Compaq misled the public regarding the true value of its stock at a time when members of management were selling their own shares. Horton delivered a letter demanding to inspect Compaq’s stock ledger and relatedinformation. The demand letter stated that the purpose of the request was to enable Horton to communicate with other Compaq shareholders to inform them of the pending shareholders’ suit and to ascertain whether any of them would desire to become associated with that suit or bring similar actions against Compaq and assume a pro rata share of the litigation expenses. Compaq refused the demand, stating that the purpose described in the letter was not a “proper purpose” for inspecting corporate books and records. Explain who should prevail and why.
