## Facts

- Mission Development Company was a Delaware holding company formed to acquire and hold a large block of Tidewater Oil Company common stock; its only significant asset was Tidewater stock.
- J. Paul Getty effectively controlled Mission, Getty Oil, and Tidewater.
- Tidewater adopted policies emphasizing capital expenditures and expansion; it stopped paying cash dividends for extended periods and at times paid stock dividends instead.
- Tidewater made exchange offers to common shareholders in 1955 and 1960 but excluded Getty Oil and Mission from participation.
- From about September 1960 to August 1961, Getty Oil purchased additional Tidewater stock, including on the open market.
- Minority shareholders of Mission alleged Getty caused Tidewater’s no-dividend policy to depress Mission’s stock price so Getty-controlled entities could buy Mission shares cheaply and avoid taxes associated with dividends.
- The minority shareholders sought equitable relief including liquidation of Mission, partial distribution of Mission’s Tidewater holdings, or appointment of a receiver to wind up Mission and distribute assets.

## Issues

1. Whether minority shareholders may compel liquidation, receivership, or a compelled distribution of a solvent holding company’s assets based on alleged conflicts and dividend policy, without evidence of fraud, bad faith, or mismanagement.
2. Whether the record presented a genuine issue of material fact sufficient to defeat summary judgment where the defendant produced affidavits and depositions supporting legitimate corporate purposes and plaintiffs offered no contradictory proof.

## Decision

- The Delaware Supreme Court affirmed the Court of Chancery’s grant of summary judgment for Mission.
- The court held plaintiffs failed to produce evidence of fraud, bad faith, or mismanagement justifying the extraordinary remedies sought.
- The court concluded the undisputed record supported legitimate business reasons for Tidewater’s dividend policy (capital improvements and expansion) and did not support an inference of a scheme to injure Mission’s minority shareholders.
- Because plaintiffs did not counter the defendant’s evidentiary showing, no genuine dispute of material fact existed.

## Legal Principles

- Court-ordered liquidation, receivership, or compelled asset distribution for a solvent corporation is an extraordinary equitable remedy, unavailable absent clear evidence of fraud, bad faith, gross mismanagement, or similar abuse.
- The existence of a controlling shareholder and the possibility of conflict is insufficient; the plaintiff must show actual abuse of control causing harm.
- Courts generally defer to legitimate business judgment on dividend and earnings-retention policy when supported by bona fide corporate needs.
- Summary judgment is proper when the moving party supports its motion with competent evidence and the opponent fails to produce specific facts showing a genuine issue for trial.

## Conclusion

The court refused to dismantle a solvent holding company that was carrying out its stated purpose—holding Tidewater shares—because the minority shareholders offered only allegations, not evidence, of wrongdoing; summary judgment for the corporation was therefore affirmed.


Berwald v. Mission Dev. Co., 185 A.2d 480 (Del. 1962)