North Carolina Business Litigation Report

Business Court Orders Specific Performance Of Stock Subscription Agreement

Yesterday, the Business Court issued its first published opinion of 2010, Marosi v. M.F. Harris Research, Inc., 2010 NCBC 1 (N.C. Super. Ct. January 28, 2010), and ordered specific performance of a Subscription Agreement for the purchase of stock.

The dispute concerned a purchase by Thomas Marosi, shortly before he died, of stock in the Defendant corporation. The investment was made pursuant to a Subscription Agreement. Dr. Marosi's executor, the Plaintiff, said that the stock certificate for the shares had never been issued. He had requested that the company issue it, but for some reason not clear from the opinion or the briefs, the company refused.

The Plaintiff moved for specific performance of the Subscription Agreement. Judge Jolly said that the purpose of specific performance was to force a party "to do exactly what he ought to have done without being coerced by the court," and that the remedy was appropriate upon a "showing of (a) the existence of a valid contract, (b) its terms and (c) full performance by the party seeking performance or a demonstration that he is himself ready, willing and able to perform."

The Court determined that those elements were met, as there was a contract, its terms were clear, and the Defendant did not dispute that there had been full performance by Dr. Marosi in the form of payment for the stock.  Judge Jolly ordered that stock certificates be issued to Dr. Marosi's estate by February 8, 2010, subject to the same restrictions applicable to any other shares held by shareholders in the corporation.

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Mack Sperling
Brooks Pierce, LLP
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