No. CV97 034 67 58 S
November 4, 1997
MEMORANDUM OF DECISION RE: ORDER TO SHOW CAUSE RE: PLAINTIFF'S APPLICATION FOR A TEMPORARY INJUNCTION
On September 12, 1997, plaintiff David Rager filed an Application for temporary Injunction and a Verified Complaint to this court seeking to enjoin the defendants, J-Bird Records, Inc., and its President and majority shareholder, defendant Jay Barbieri, from going forward with a proposed stockholders' meeting called for the purpose of amending the corporate by-laws by deleting Article XV of said by-laws.
Article XV provides that the unanimous consent of the shareholders is required before additional stock can be issued. This "antidilution" provision was negotiated by plaintiff and other minority shareholders at the time the plaintiff joined J-Bird Records, Inc. as Senior Vice President for New Business Development and received "5%" of the company as represented by 5% of the authorized and issued stock.
The parties were before the court on September 22 and September 23, 1997. The evidence disclosed that defendant Barbieri notified plaintiff that his interest in the company would be reduced from 5% to around 4% because of the issuance of more shares required for the corporate merger of J-Bird with Caltron, a publicly traded "shell" corporation with no active operations or business. This merger was considered after Barbieri held a stockholders meeting which purportedly removed by majority vote the Article XV provision requiring unanimous consent for the issuance of additional shares. Plaintiff never consented to removal of the unanimous consent requirement.
The court has fully considered the evidence presented and finds that a temporary injunction ought to issue, and further, that said injunction ought to issue without bond.
NOW THEREFORE, by the authority of the State of Connecticut, these presents are to command and enjoin the defendants, Jay Barbieri, J-Bird Records, Inc., their agents, employees, representatives, organizers, attorneys, successors and assigns, and all persons acting in concert with them or either of them, to desist and refrain from doing or attempting to do, or causing to be done, directly or indirectly, by any means whatsoever, or by any person or person, whomsoever, either by one or all of the following acts or things in connection with, related to or in furtherance of
a. the issuance of additional shares in the J-Bird Records, Inc. or any successor or merged corporation thereof;
b. the deletion of Article XV and any other provision which provides for unanimous voting and/or consent from the corporate by-laws by a less than unanimous vote; and,
c. any violation of the August 2, 1996 Contract for the Purchase and Sale of Stock, including the terms of the Second Amended By-Laws incorporated therein.
Said injunction shall remain in place until further order of this court.