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Mark had 85 shares. The remaining shares were held by 29
shareholders, each of whom held at least 3 shares.
On the valuation date, the estate shares were 49.97 percent
of Peoples' outstanding shares, and no other shareholder held an
interest of similar size. Although the estate shares were
numerically a minority interest, they were a controlling interest
in substance. The estate shares had effective control of
Peoples, regardless of who owned them.2 There would be few
circumstances in which the estate shares would not determine the
outcome of any particular vote, because unless every other
shareholder voted against the estate shares, the estate shares
would always win. Thus, over time, the holder of the estate
shares would in all likelihood be able to determine all, or
substantially all, the members of Peoples' board of directors
(the board).3
2 Because every shareholder owned at least 3 shares, any
existing shareholder who acquired the estate shares would
automatically acquire actual control, because he or she
would acquire a majority interest (1,499 + 3 = 1,502/3,000).
3 The articles of incorporation of Peoples do not provide
for cumulative voting for directors. Although the Indiana
general corporate law permits the certificate of
incorporation to provide for cumulative voting for
directors, Ind. Code Ann. sec. 23-1-30-9(b) (Michie 1999),
the Indiana corporate law applicable to financial
institutions does not appear to permit cumulative voting.
See Ind. Code Ann. sec. 28-13-6-9 (Michie 1996).
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