question archive Trans-System, Inc
Trans-System, Inc. (TSI), is an interstate trucking business. In 1994, to provide a source of well-trained drivers, TSI formed Northwestern Career Institute, Inc., a school for persons interested in obtaining a commercial driver’s license. Tim Scott, who had worked for TSI since 1987, was named chief administrative officer and director. Scott, a Northwestern shareholder, disagreed with James Williams, the majority shareholder of both TSI and Northwestern, over four equipment leases between the two firms under which the sum of the payments exceeded the value of the equipment by not more than $3,000. Fewer than four other leases, payments were $40,000 less than the value of the equipment. Scott also disputed TSI’s one-time use, for purposes unrelated to the driving school, of $125,000 borrowed by Northwestern. Scott was terminated in 1998. He filed a suit in a Washington state court against TSI seeking, among other things, the dissolution of Northwestern on the ground that the directors of the two firms had acted in an oppressive manner and misapplied corporate assets.
1. Should the court grant this relief?
2. If not, what remedy might be appropriate? Discuss.
[Scott v. Trans-System, Inc., 148 Wash.2d 701, 64 P.3d 1 (2003)]