This case involves a dispute over corporate action during a shareholder meeting of Appellee Sink & Rise, Inc., (Sink & Rise) a Wyoming corporation. Appellee James Caleb Case (Cale Case) was the only shareholder present at the meeting. He concluded that a quorum existed and thus voted on and passed several resolutions. Cale Case also elected himself and another shareholder as the directors of the corporation, and replaced his estranged wife, Appellant Shirley Case, as the corporation’s secretary. Shirley Case took issue with her estranged husband’s actions during the shareholder meeting and filed a complaint in a Wyoming state district court to set aside the corporate action that occurred at the shareholder meeting. The district court concluded that the resolutions were passed with requisite authority and thus they were not set aside after trial. This appeal followed. Shirley Case argues that because her estranged husband was not entitled to vote the jointly held shares, those same shares could not be counted for quorum purposes. She reasons that because she was absent from the meeting and because only shares “entitled to vote” are to be counted in establishing a quorum, the shares in question were essentially useless at the meeting. We find the answer in the Sink & Rise corporate documents, and within Wyoming law. First, we reiterate the [district court’s] characterization of the stock as being owned by husband and wife with rights of survivorship. We agree with the district court’s further classification of the stock as creating a presumption of tenancy by the entirety under Wyoming law. As tenants by the entirely each owns an undivided 100% interest in the 16 shares. In an estate of the entirety, the husband and the wife during their joint lives each owns, not a part, or a separate or a separable interest, but the whole. To further help us in our consideration, we turn to the corporate documents. Sink & Rise’s bylaws define what constitutes a “quorum,” and relate the corporation’s rule on voting shares: 6. Quorum. A majority of the outstanding shares entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of Shareholders. If a quorum is present, the affirmative vote of the majority of shares entitled to vote at the meeting shall be the act of the Shareholders. 7. Voting of Shares. Each outstanding share is entitled to vote the number of shares owned by him/her on each matter submitted to a vote at a meeting of Shareholders. According to the bylaws, for the corporation to count shares in determining a quorum, the shares must be (1) entitled to vote, and (2) represented in person or by proxy. From our reading of the corporate documents, and because the joint stock was held by husband and wife as tenants by the entirety, we conclude that the shares held jointly by Cale Case and Shirley Case were “entitled to vote” at the meeting. Cale Case represented the stock in person, as required by the bylaws……………………………………………………………….. Required: 1. How many shareholders were present at the shareholders’ meeting that gave rise to the dispute in this case? 2. How did the court “characterize” and “classify” the shares of stock that Cale and Shirley Case held jointly? 3. According to the court, how many shares were represented at the shareholders’ meeting? Was a quorum present? Explain.
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