![]() ![]() This inactivity is attributed to the high book value, the closely held nature of the Association, 3 and the failure of the management to provide investment information and assistance to shareholders, brokers, or the public. The Association has retained the major part of its earnings in tax-free reserves with the result that the book value of the outstanding shares has increased substantially. The stockholders have the right to elect a majority of the directors of the Association. The shares allocated to unexercised warrants were sold to the then chairman of the board of directors who later resold them to defendants and others. Of these shares, 987 (14.8 percent) were purchased by depositors pursuant to warrants issued in proportion to the amount of their deposits. The Association issued 6,568 shares of stock on April 5, 1956. No one depositor had sufficient voting power to control the Association. 1 Theretofore it had been owned by its depositors, who, with borrowing members, elected the board of directors. United Savings and Loan Association of California is a California chartered savings and loan association that first issued stock on April 5, 1956. The following facts appear from the allegations of the complaint and stipulation. We have concluded that the allegations of the complaint and certain stipulated facts sufficiently state a cause of action and that the judgment must therefore be reversed. Defendants have filed a protective cross-appeal. Plaintiff appeals from the judgment entered for defendants after an order sustaining defendants' general and special demurrers to her third amended complaint without leave to amend. Plaintiff seek damages and other relief for losses allegedly suffered by the minority stockholders of the Association because of claimed breaches of fiduciary responsibility by defendants in the creation and operation of United Financial, a Delaware holding company that owns 87 percent of the outstanding Association stock. The defendants are United Financial Corporation of California, fifteen individuals, and four corporations, all of whom are present or former stockholders or officers of the Association. Jones, the owner of 25 shares of the capital stock of United Savings and Loan Association of California brings this action on behalf of herself individually and of all similarly situated minority stockholders of the Association. ![]()
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