Divorce proceedings and a shareholder agreement
Herman Fryar was a shareholder in a small company,
Bryan-Barber Realty, Inc. Fryar’s ownership was subject to a shareholder
agreement stating that he could not sell or otherwise dispose of his stock
without the permission of the other shareholders. In divorce proceedings, the
court directed Herman to transfer the stock to his wife, Judith. Bryan-Barber
subsequently obtained a judgment against Herman and sought to recover his
shares. The company claimed that Herman was still the owner of the shares
because the shareholder agreement prohibited the transfer of his shares to
anyone else, including Judith, without the permission of the other
shareholders.
Discuss whether this claim should succeed.
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