## Facts

- Serge Claire owned one-third of two Atlanta restaurant corporations: Rue de Paris, Inc. and Rue de Paris of Buckhead, Inc.
- Claire filed identical shareholder suits seeking injunctions, dissolution, costs, and attorney’s fees under former Ga. Code Ann. § 22-1317, alleging illegal or fraudulent acts by those in control and misapplication or waste of corporate assets.
- In response to the corporations’ motions for summary judgment, Claire submitted affidavits alleging misconduct, including Sunday alcohol sales, dilution of alcoholic beverages, and irregular cash handling and recordkeeping (unrecorded transactions and withheld deposits).
- Claire’s deposition admitted his own involvement, including taking cash from registers (including cash from sales not rung up) and taking corporate food and liquor for personal use.
- Rue de Paris, Inc. asserted a counterclaim against Claire based on his alleged taking of corporate money and property.
- The trial court granted summary judgment to the corporations on Claire’s dissolution actions and granted summary judgment to Claire on the counterclaim.

## Issues

1. Whether a shareholder who knowingly participated in and benefited from the alleged illegal practices may obtain dissolution and related equitable relief under former Ga. Code Ann. § 22-1317.
2. Whether the corporations’ counterclaim against the shareholder could be resolved by summary judgment in the shareholder’s favor where evidence showed he took corporate money and property.

## Decision

- The Supreme Court of Georgia affirmed summary judgment for both corporations on Claire’s dissolution actions.
- The court held that Claire’s admissions showed he participated in and profited from the same misconduct he alleged, barring equitable relief.
- The Supreme Court of Georgia reversed summary judgment for Claire on the corporations’ counterclaim.
- The court remanded because Claire’s admissions created genuine issues of material fact as to whether he owed money or property to the corporations.

## Legal Principles

- Statutory minority-shareholder dissolution relief under former Ga. Code Ann. § 22-1317 is equitable in character and remains subject to equitable defenses.
- A plaintiff seeking equitable relief must come with clean hands; a shareholder in pari delicto with the alleged corporate wrongdoers cannot obtain dissolution based on that wrongdoing.
- On summary judgment, admissions that a shareholder took corporate cash and property can create triable fact issues supporting a corporate counterclaim for restitution or damages.

## Conclusion

A minority shareholder who participated in and benefited from alleged corporate illegality and asset misuse cannot use those acts to obtain judicial dissolution or other equitable relief, but that same evidence may allow the corporation’s counterclaim for misappropriation to proceed to trial.


Claire v. Rue de Paris, Inc., 239 Ga. 191 (1977)