John F. Meadows, and Estate of David J. Peterson v. Bicrodyne Corporation and Carpenter Technology Corporation

Bicrodyne became bankrupt and filed for reorganization under Chapter 11 in September, 1970. The plan which was formulated called for conversion of debt into stock. Carpenter, Bicrodyne’s principal creditor, received 10.3% of Bicrodyne’s voting stock, and, over the following two years, acquired a total of 95% of that stock. On September 15, 1977, Bicrodyne was merged into Carpenter, pursuant to Chapter 11 of the Cal. Corp.Code.

In December, 1977, appellants shareholders Meadows and Peterson brought actions in California Superior Court against Bicrodyne and Carpenter, seeking fair market value for the minority shares of stock in Bicrodyne and alleging fraud and breach of Carpenter’s fiduciary duty as majority stockholder in Bicrodyne.

Carpenter removed this action to the district court.. Appellants filed a motion for an order remanding the case to state court which the district court denied. Appellants filed a second motion to remand alleging untimely removal. 559 F.Supp. 57 . The district court denied this second remand motion on the ground that appellants had waived their timeliness objection. The district court granted Carpenter’s motion for partial summary judgment, holding…