Also known as: deadlock
Written by attorneys · grounded in primary & secondary sources — see below
2 senses
A deadlock among directors in managing corporate affairs that shareholders cannot break and that threatens or causes irreparable injury to the corporation or prevents the business from being conducted to the advantage of the shareholders generally.
A deadlock among directors in managing corporate affairs that shareholders cannot break and that threatens or causes irreparable injury to the corporation or prevents the business from being conducted to the advantage of the shareholders generally.
Select any source to read its text and confirm it supports the definition.
A point in labor negotiations at which the parties cannot reach agreement despite good-faith bargaining.
Select any source to read its text and confirm it supports the definition.
A point in labor negotiations at which the parties cannot reach agreement despite good-faith bargaining.
Each sense below has its own examples, sources, and questions.
Irene Ingalls and Igor Ito each own half the shares of Ideal Solutions and serve as its only directors. They disagree on whether to refinance the company's main project or sell it immediately and refuse to compromise. No board decisions can be made, construction halts, permits expire, and lenders issue foreclosure notices. Irene petitions for judicial dissolution.
Isabelle Inman and Ingrid Innes form Insight Consulting with equal ownership. They execute a shareholder agreement that transfers authority to resolve any board deadlock to a designated third-party advisor. When the directors later split on a key contract decision, the agreement allows the advisor to break the tie and approve the deal.
The shareholder must show that directors are deadlocked in managing corporate affairs, that shareholders cannot break the deadlock, and that the deadlock threatens or causes irreparable injury or prevents the business from operating to the shareholders' general advantage.
Supporting sources
Yes. A shareholder agreement may transfer authority to resolve any deadlock among directors or shareholders to one or more shareholders or other persons, provided the agreement is properly executed and noticed.
Supporting sources
No. A simple disagreement does not satisfy the statute. The deadlock must produce concrete harm such as stalled operations, expiring permits, lost tenants, or lender defaults that threaten irreparable injury or prevent advantageous conduct of the business.
Supporting sources
Imperial Motors and the union reach a new collective-bargaining agreement after extended talks but cannot agree on a separate back-to-work deal covering strike damages. The union instructs members to continue striking until the company accepts the hold-harmless terms. The company refuses, treating further strikes as violations of the new agreement.
Indigo Textiles negotiates with its employees' union over wages and benefits. After good-faith discussions the parties cannot agree on key terms. The employer implements its last offer while the union considers further economic pressure. Both sides treat the negotiations as exhausted for the time being.
After impasse the employer may implement changes it previously offered to the union and may decline to negotiate further on the mandatory subjects that produced the deadlock.
Supporting sources
…private and public-sector collective bargaining is drawn from these sources. [^maj-25]: See, e. g. , Anderson, Strikes and Impasse Resolution in Public Employment, 67 Mich. L. Rev. 943 (1969); Burton & Krider, The Role and Consequences of Strikes by Public Employees, 79 Yale L. J. 418 (1970); Hildebrand, supra , n.…