Schlegel v. Cpi Plants, Inc., No. Cv94047677 (Mar. 28, 1995)

[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.]MEMORANDUM OF DECISION RE: MOTION TO STRIKE #110 The defendant has moved to strike the plaintiff's Second Amended Petition for Shareholders Appraisal Rights pursuant to § 33-373(d) of the Connecticut General Statutes. This court has previously granted a motion to strike the original petition relied on § 33-373(c) of the Connecticut General Statutes. (See memorandum of decision dated December 2, 1994).

Section 33-373(d) provides:

If a corporation sells all or substantially all its assets primarily in consideration for securities of another corporation, domestic or foreign, and such transaction is part of a general plan of liquidation and distribution substantially equivalent to a merger, any shareholder of such corporation objecting to such sale shall have the right to be paid the value of all shares of such corporation owned by him in accordance with the provisions of section 33-374.

In his amended petition the plaintiff alleges that the "securities of another corporation" consist of: CT Page 2986

(1) a promissory note of the purchasing corporation in the amount of $600,000.00, (2) an agreement to pay, on the part of the purchasing corporation $950,000.00 to Chemical Bank in satisfaction of a Term Loan Agreement and Line of Credit entered into by the defendant and Manufacturers Hanover Trust Company, (3) agreement wherein the purchasing corporation assumed the obligations of the defendant with respect to employment agreements of specified individuals, and (4) the execution of a non-competition agreement.

The Court agrees with the argument of the defendant, that the documents alleged as set forth above, do not constitute, "securities of another corporation" so as to afford the plaintiff appraisal rights pursuant to C.G.S. § 33-373(d).

The motion to strike is therefore granted for the reason set forth above.