                  IN THE UNITED STATES COURT OF APPEALS

                           FOR THE FIFTH CIRCUIT

                           _____________________

                                No. 01-10842
                           _____________________

STASAN INC

                   Plaintiff - Appellant/Cross - Appellee

            v.

MICHAEL P LOGAL, DEBORAH V LOGAL, and NETWORK STAFFING SERVICES

                   Defendants - Appellees/Cross - Appellants


________________________________________________________________

      Appeal from the United States District Court for the
                    Northern District of Texas
                           (99-CV-2796)
_________________________________________________________________
                        September 18, 2002


Before KING, Chief Judge, and PARKER and CLEMENT, Circuit Judges.

PER CURIAM:*

     Before the court are cross appeals from Plaintiff Stasan, Inc.

(“Stasan”) and Defendants Michael P. Logal (“M. Logal”), Deborah V.

Logal    (“D.    Logal”)   (collectively   the   “Logals”),   and   Network

Staffing Services, Inc. (“NSSI”), in which Stasan appeals the

district court’s declaration that the Logal-controlled NSSI board

of directors is validly elected and the district court’s denial of

     *
      Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

                                     1
Stasan’s request for mandamus relief in connection with Stasan’s

contention that it was denied access to corporate records.                             NSSI

and   the      Logals      appeal    the     district      court’s   summary     judgment

concluding that the NSSI stock issued to Stasan was validly issued.

Upon review,          we   affirm     the    district      court’s    judgment    in    all

respects.

                                    FACTUAL PREDICATE

      At its core, this case involves a dispute over stock in, and

control of, NSSI, a Dallas-based Texas corporation formed in 1994

to provide temporary, contract, and executive personnel to a wide

range     of    businesses.           From       its   beginning,    NSSI’s    corporate

existence       has     been    marked      by    interested    parties   dueling       for

control. The current litigation was engendered by the formation of

a   corporate      alliance         largely       controlled   by    Stasan,     Stasan’s

president Estelle Blumberg (“E. Blumberg”), and Stasan’s business

manager, Richard Blumberg (“R. Blumberg”).                     The group took control

of the NSSI board, and, shortly thereafter, obtained a temporary

restraining       order        to   bar    the    Logals    from    entering   the     NSSI

premises.1       In response, M. Logal, who had been NSSI’s president


      1
           Prior to the instant case, the Logals brought suit
against Stasan, the Blumbergs, and others asserting, among other
claims, securities fraud and breaches of fiduciary duties. Like
the Stasan-controlled group, they also sought and obtained a
temporary restraining order enjoining the Stasan-controlled
alliance from terminating the Logals’s employment with NSSI and
from attempting to gain control of NSSI bank accounts. The order
was short-lived and the case was eventually dismissed without
prejudice.

                                                 2
and   the    individual      largely   responsible     for   the    day-to-day

operations of the company before the Stasan takeover, joined D.

Logal to form a shareholder group largely under their control.               The

Logal-controlled group signed a “Written Consent” to remove the

Stasan-controlled board and reconstitute it as a Logal-controlled

board.    Litigation ensued.

      In December 1999, NSSI and the Logals filed this suit seeking

a declaration that 300 shares of NSSI stock issued to Stasan in

1994 are void for lack of consideration.        Twenty days later, Stasan

filed suit in Florida seeking declaratory relief that the stock was

validly issued.       The Florida action was abated in favor of this

action.     Stasan counter-claimed for a declaration that the Logal-

controlled board was not validly elected and for mandamus relief

from NSSI’s alleged denial of access to its books and records.

      The district court initially dismissed the action by NSSI and

the Logals as barred by the applicable statute of limitations, but

later realigned the parties and allowed the suit to continue.                 It

thereafter granted summary judgment in favor of NSSI and the

Logals,     holding   that    the   Logal-controlled    board      was   validly

elected.      The court also granted summary judgment in favor of

Stasan on the stock issue, holding that the stock was validly

issued.     It later denied Stasan’s motion to reconsider the summary

judgment that the Logal-controlled board was validly elected.

After a bench trial, the district court denied Stasan’s requested

mandamus relief, and this appeal followed.

                                       3
                             STANDARD OF REVIEW

     The   court   reviews    the    district         court’s     summary     judgment

determinations under a de novo standard of review,2 and can affirm

on any ground raised below.3         Summary judgment is proper if there

is no genuine issue as to any material fact.4

     The parties dispute the standard to be applied to the district

court’s grant of summary judgment holding that the Logal-controlled

board was validly elected.      Stasan’s appellate arguments regarding

whether the Logal-controlled board was validly elected were first

raised in the district court by way of a motion to reconsider the

summary judgment in favor of NSSI and the Logals.                        Apparently

expecting to receive an extension of time in which to file its

response, an expectation not fulfilled by the district court,

Stasan did not file a response to the motion for summary judgment

filed by NSSI and the Logals.                The district court subsequently

rendered   summary   judgment       in   favor    of       NSSI   and   the   Logals,

prompting Stasan to file a motion for reconsideration which raised

previously   unasserted   arguments.5            In    a    one-line    denial,    the

     2
          See Morris v. Covan Worldwide Moving, Inc., 144 F.3d
377, 380 (5th Cir. 1998).
     3
          See Holtzclaw v. DSC Communications Corp., 255 F.3d
254, 257-58 (5th Cir. 2001).
     4
          See FED. R. CIV. P. 56(c); Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986).
     5
          Stasan did not raise these arguments in its motions to
dismiss, motion for summary judgment, or motion for extension of
time in which to file a response to NSSI’s and the Logals’s

                                         4
district court disposed of Stasan’s motion, and it is this denial

that Stasan appeals.

     A district court’s denial of a motion for reconsideration is

generally reviewed for abuse of discretion,6 under which the ruling

must only be reasonable.7   However, as asserted by Stasan, “[i]f

the [district] [c]ourt considers the [new] materials [included in

the motion to reconsider] but still grants summary judgment, the

appellate court may review all materials de novo.”8   Two points are

worth mentioning on this issue. First, nothing in the record leads

this court to believe that the district court considered the new

arguments raised in the motion for reconsideration.9     A one-line

denial by the district court combined with the district court’s

denial of Stasan’s unopposed motion for an extension of time to

file its response to the motion and Stasan’s failure to have the


motion for summary judgment.
     6
          See Lake Hill Motors, Inc. v. Jim Bennett Yacht Sales,
Inc., 246 F.3d 752, 757 (5th Cir. 2001); Giles v. General Elec.
Co., 245 F.3d 474, 494 (5th Cir. 2001); Ford Motor Credit Co. v.
Bright, 34 F.3d 322, 324 (5th Cir. 1994).
     7
          See Bright, 34 F.3d at 324.
     8
          Id. “On the other hand, if the district court refuses
to consider the materials, the reviewing court applies the
[general] abuse of discretion standard.” Id. (quoting Fields v.
City of South Houston, Texas, 922 F.2d 1183, 1188 (5th Cir.
1991)).
     9
          It is not entirely clear whether the conclusion reached
in Bright is even applicable to the situation before the court.
While Stasan raised new arguments in its motion for
reconsideration, the materials included were nothing novel for
the district court.

                                5
district court reconsider this discretionary ruling precluding an

extension (which, incidentally, was made forty-seven days before

the district court’s summary disposition on the board of directors

issue) belies Stasan’s conclusory averment that the “district court

in this case considered the materials submitted with STASAN’s

Motion for Reconsideration.”             Second, the Xerox Corp. v. Genmoora

Corp. case cited by Stasan is inapposite.10                   There, the factual

scenario affirmatively “reflect[ed] the existence of several issues

of material fact” brought to light in the motion to reconsider.

This    prompted      our   court   to   find   that   “the    trial   judge    knew

positively at that time [of the filing of the motion to reconsider]

that his earlier grant of summary judgment could no longer be

justified” because the motion supplied the district court with new

evidence so “overwhelming” that the trial judge “could not turn his

back” on the showing.11         In contrast, wholly absent from Stasan’s

motion for reconsideration is the deluge of “overwhelming” fact

issues evidenced in Xerox.          In these circumstances, the court will

review      the     district   court’s     denial   of   Stasan’s      motion   for

reconsideration for abuse of discretion.

       The standard of review for a bench trial is well established.

Findings of fact are reviewed for clear error and legal conclusions




       10
              888 F.2d 345, 356 (5th Cir. 1989).
       11
              Id.

                                           6
are reviewed de novo.12

                                ANALYSIS

     Stasan appeals from two rulings: (1) the district court’s

declaration that the Logal-controlled board was validly elected,

and (2) the district court’s refusal to grant Stasan mandamus

relief. NSSI and the Logals appeal from the district court’s grant

of summary judgment that the 300 shares of NSSI stock issued to

Stasan were validly issued.     Each point is addressed in turn.

     A.    Board of Directors

     In early 1999, NSSI’s board consisted of R. Blumberg, Ed

Astin, Piotr Zapendowski (“Zapendowski”), and D. Logal.                 In July

1999, R. Blumberg called a shareholders’s meeting.                     Over the

objection of D. Logal at this meeting, the existing NSSI board

proceeded to elect a new Stasan-controlled board consisting of R.

Blumberg, E. Blumberg, Zapendowski, and Ilene Phillips. Apparently

unhappy   with   NSSI’s   financial       response   to   this   new    board,13

Zapendowski approached M. Logal for assistance and, on August 11,

1999, gave him (through a written “Consent Form”) a proxy to vote

Zapendowski’s 200 shares of NSSI stock on all NSSI stockholder


     12
          Gebreyesus v. F.C. Schaffer & Assocs., Inc., 204 F.3d
639, 642 (5th Cir. 2000).
     13
          On July 29 1999, several “[c]oncerned [e]mployees of
NSSI” submitted a letter to NSSI shareholders urging them to
“[e]lect a Board of Directors that truly cares about this
company’s future and the employees that have built it,” and one
which “will achieve the goals envisioned by Michael and Debby
Logal.”

                                      7
matters, “including election of directors.”       However, on that same

date, Zapendowski, D. Logal, Laura Smith, Emily Carlson, and Ed

Astin — owners of sixty-four percent of the outstanding NSSI stock

— signed a “Written Consent,” which removed the Stasan-controlled

board and named D. Logal, M. Logal, Bill Emery, and Kathleen Logal

as directors.

     The district court summarily dismissed Stasan’s claim for a

declaration   that   the   Logal-controlled     board   was   not   validly

elected, concluding that “the Stasan board was properly removed and

replaced by the Written Consent.”

     Relying on arguments raised for the first time in its motion

for reconsideration, Stasan avers that Zapendowski forfeited his

legal authority to enter into the Written Consent that removed the

Stasan-controlled board because his proxy belonged to M. Logal. As

M. Logal only voted his shares, not Zapendowski’s 200 shares,

Stasan contends that a majority of shareholders did not place their

imprimatur on the corporate action and it was thus without effect

to remove the Stasan-controlled board.14

     Significant     for   the   purpose   of    this    controversy    is

Zapendowski’s ability to revoke the proxy at issue. Even Steinberg


     14
          Stasan alternatively contends that a question of fact
exists as to whether the Stasan-controlled board was properly
removed for cause. Because the court affirms on the ground that
the Logal-controlled board acted within its rights under the NSSI
bylaws, it is unnecessary to address the alternative contention
regarding the implied common law right of the Logal-controlled
board to remove the Stasan-controlled board for cause.

                                   8
v. American Bantam Car Co.,15 the case principally relied on by

Stasan in support of its argument that Zapendowski no longer had

the authority to vote his shares, left open the possibility that

the appointment could be revoked by the shareholder who gave the

authority in the first instance.16   M. Logal, the holder of the

proxy, signed the Written Consent along with Zapendowski and

understood that the proxy was not controlling as to this majority

vote. M. Logal could have voted Zapendowski’s shares when he voted

his own had the two not mutually agreed to vote their own shares as

to the Written Consent.17 When freed from the view that Zapendowski

was irrevocably disenfranchised by the proxy he gave, it is clear

that the district court did not abuse its discretion when it held

that the Written Consent was effective to change the board of

directors by a majority of shareholders under section 3.10 of the

NSSI bylaws.18   We also note that, in 1996, when NSSI merged with

     15
          76 F. Supp. 426, 439 (W.D. Pa. 1948), appeal dismissed,
173 F.2d 179 (3d Cir. 1949).
     16
          Id. (“Until this appointment was revoked by the
shareholder who gave the authority, said individuals, jointly and
severally, were the only persons who had authority to act for or
vote the shares of stock owned by the respective shareholders.”).
     17
          See, e.g., Coleman v. Mayes, 347 S.W.2d 827, 829 (Tex.
Civ. App.– Houston 1961, writ ref’d, n.r.e.) (contract revoked by
mutual agreement).
     18
          Section 3.10 of the NSSI bylaws provides, in relevant
part, that:

     Any action required or permitted by the [Texas Business
     Corporation] Act to be taken at any annual or special
     meeting of shareholders of the corporation may be taken

                                 9
another company, a “Memorandum of Action” was drafted at the demand

of R. Blumberg, who ordered that all NSSI shareholders sign the

Memorandum     before   or   at   the   same   time   as   the   other   merger

documents.     This Memorandum, which was expressly incorporated as a

part of the bylaws and the articles of incorporation for NSSI,

provides further support for the proposition that a majority of

shareholders can add new directors or replace existing or resigned

directors.19

     B.   Access to Books and Records

     The right of shareholders to inspect a corporation’s books and



     without a meeting, without prior notice and without a
     vote, if the action is taken by the holders of
     outstanding stock of each voting group entitled to vote
     thereon having not less than the minimum number of votes
     with respect to each voting group that would be necessary
     to authorize or take such action at a meeting at which
     all voting groups and shares entitled to vote thereon
     where [sic] present and voted. In order to be effective,
     the action must be evidenced by one or more written
     consents describing the action taken, dated and signed by
     approving shareholders having the requisite number of
     votes of each voting group entitled to vote thereon, and
     delivered to the corporation by delivery to its principal
     office in this state, its principal place of business,
     the corporate secretary, or another office or agent of
     the corporation having custody of the book in which
     proceedings of meetings of shareholders are recorded.
     19
          See Memorandum at 1 (“a majority of the shareholders
can add new Directors (up to the specified limit) or replace
existing or resigned Directors.”). The Memorandum further
provides that the board intends the Memorandum to be made a part
of the articles of incorporation and bylaws, and that to the
extent there is a conflict between the Memorandum and the
articles of incorporation and bylaws, “the Articles of
Incorporation and By-Laws will be immediately changed to reflect”
the Memorandum.

                                        10
records is a right statutorily granted in Texas.20          However, the

method of enforcement of the right of inspection is by mandamus, a

matter of judicial discretion.21       Stasan sought a writ of mandamus

permitting it to inspect and copy the books and records of NSSI.

After a bench trial, the district court concluded that NSSI had not

“refused” access to its books and records and thus denied Stasan’s

request   for   mandamus   relief.22     Stasan   appeals   this   denial,

contending that the district court applied the incorrect standard

and must be reversed.

     Article 2.44 of the Texas Business Corporation Act provides

that:

     C. Any person who shall have been a shareholder for at
     least six (6) months immediately preceding his demand .
     . . shall have the right to examine . . . its relevant
     books and records of account, minutes, and share transfer
     records, and to make extracts therefrom.
     D. Any corporation which shall refuse to allow any such
     shareholder or his agent, accountant or attorney, so to


     20
           See TEX. BUS. CORP. ACT, art. 2.44 (Vernon Supp. 2001).
     21
          See Moore v. Rock Creek Oil Corp., 59 S.W.2d 815, 817
(Tex. Comm’n App. 1933, judgm’t adopted).
     22
           As stated by the district court:

     Because the court finds that NSSI did not refuse to allow
     Stasan to inspect or copy the business records it
     requested, NSSI is entitled to judgment on Stasan’s claim
     pursuant to BCA Article 2.44(C)-(D).       For the same
     reason, the Court concludes that Stasan is not entitled
     to recover costs or expenses, including attorneys’ fees,
     incurred in enforcing its rights under BCA Article
     2.44(C)-(D).

Memorandum Order at 11.

                                   11
     examine and make extracts from its books and records of
     account, minutes, and share transfer records, for any
     proper purpose, shall be liable to such shareholder for
     all costs and expenses, including attorneys' fees,
     incurred in enforcing his rights under this Article in
     addition to any other damages or remedy afforded him by
     law . . . .23


We agree that in holding that Stasan has the burden of showing that

NSSI “refuse[d]” to allow Stasan or its agent to examine and copy

the requested documents, the district court may have overstated

Stasan’s burden under article 2.44.24 While the language of the Act

clearly states that the corporation shall not “refuse” access to

corporate records or books, the limited number of Texas cases that

address article 2.44 do impose a judicial overlay of reasonableness

to the standard.25    Under this “reasonableness” standard, Stasan

contends that the district court should have granted its mandamus

request.26


     23
             TEX. BUS. CORP. ACT art. 2.44 (Vernon Supp. 2001).
     24
          We say “may” because language exists in the district
court’s opinion from which one could gather that the court used a
constructive refusal test, essentially questioning whether NSSI,
through its unreasonable actions, constructively refused access
to the documents. While not a carbon-copy of the reasonableness
overlay described in Johnson Ranch Royalty Co. v. Hickey, 31
S.W.2d 150, 152-53 (Tex. Civ. App.– Amarillo 1930, writ ref’d),
this standard does resist strict adherence to “refusal” that is
worrisome to Stasan.
     25
          See, e.g., Johnson Ranch, 31 S.W.2d at 152-53 (bond
condition and residency requirement were unnecessarily onerous
and unreasonable restrictions).
     26
          While several Texas cases discuss a corporation’s
ability to contest whether a shareholder has a “proper purpose”

                                  12
     At first glance, the record does not engender confidence that

NSSI was overly cooperative in meeting the requirements of article

2.44 regarding its largest shareholder’s request for access to

corporate records and books.     However, a review of the district

court’s factual findings under the clear error standard, as this

court must do, renders suspect Stasan’s assertion that NSSI imposed

unreasonable conditions on Stasan as a matter of law.    The record

demonstrates that D. Logal first responded to Stasan’s invocation

of article 2.44 (sent to NSSI by letter dated October 7, 1999)

within two weeks.   At that time, she denied access to the corporate

books, arguing that, because Stasan was not a proper shareholder of

NSSI, it was not entitled to inspect NSSI records.      Two letters

(dated October 29 and November 5, 1999) were then sent by Stasan in

which Stasan expressed its “shock” at the allegations regarding

Stasan’s stock validity.     While not conceding the point, Logal

ultimately consented to make the NSSI records and books available

to Stasan for inspection.   As the district court found, inspection

arrangements beyond this point fell through in scheduling — “[t]hat



in requesting the right of inspection, see e.g., Uvalde Rock
Asphalt, Co. v. Loughridge, 425 S.W.2d 818, 819 (Tex. 1968);
Accounting Search Consultants, Inc. v. Christensen, 678 S.W.2d
593, 595 (Tex. App.—Houston [14th Dist.] 1984, no writ); Chavco
Inv. Co. v. Pybus, 613 S.W.2d 806, (Tex. Civ. App.—Houston [14th
Dist.] 1961, writ ref’d n.r.e.), no case found discusses proper
corporate behavior in the face of a request for inspection from
an entity whose stock ownership is questionable to the
corporation. The court thus falls back on the notion oft
repeated in Texas case law that judicial discretion controls the
issuance of a mandate. See, e.g., Moore, 59 S.W.2d at 817.

                                 13
the parties actively corresponded between October 7 and December 9,

1999 regarding the scheduling of R. Blumberg’s trip to Dallas to

inspect    the    records     persuades         the    court    that,       rather    than

obstructing Stasan’s efforts to obtain access to and/or copy the

NSSI records, NSSI substantially cooperated in these efforts.”

(emphasis added). Indeed, the district court remarked at one point

that because Stasan indicated the quote for production was “too

much,” “it       appears    that    Stasan,      upon    leaning      how    costly   its

document copying request would be, may simply have opted not to

pursue this request.”          The district court further found that R.

Blumberg simply “never thereafter [after learning of the cost of

copying and subsequent to D. Logal suggesting December 14 or 15 for

the inspection rather than the December 8 or 9 date suggested by R.

Blumberg] attempted to reschedule his trip to Dallas to inspect the

records.”    In these circumstances, where the district court has

clearly set out a factual record effectively demonstrating the

reasonableness of NSSI toward Stasan regarding inspection of the

NSSI records and books, little doubt remains that viewing the

district    court’s    findings      of    fact       through   the     prism    of   the

reasonableness      standard       urged   by    Stasan    renders      the     district

court’s ultimate holding unassailable.

     At some point beyond the December 10, 1999 filing date of the

current lawsuit, NSSI’s obligations under article 2.44 merged into

its pre-trial discovery obligations under FED. R. CIV. P. 34(b),

especially where, as here, both parties were working to schedule a

                                           14
time for investigation of the records, and the corporation, not the

shareholder seeking records, initially brought suit. To the extent

Stasan seeks to utilize its motion to compel and evidence of what

it describes as abusive discovery,27 to further its claim for

liability under article 2.44, we agree with the district court that

this expands article 2.44 beyond its purpose.

      C.     Validity of Stasan’s Shares

      NSSI and the Logals aver that because Stasan failed to pay any

consideration for the 300 shares of NSSI stock issued to it by NSSI

in 1994, the shares are void as a matter of law.             The district

court did not concur, holding instead that the “assertion that

Stasan failed to pay consideration for its shares is frivolous.”

In   doing   so,   the   court   principally   relied   on   a   series   of

representations by NSSI and the Logals.        As recounted below, these

representations     affirmatively demonstrate NSSI’s and the Logals’s

belief (at least until late 1999) that the stock issued to Stasan

was validly issued.

      On July 1, 1994, the NSSI board of directors resolved that


      27
          Stasan complains that NSSI imposed unreasonable
conditions on it by requiring representatives to travel to Texas
to review documents in the summer in an un-airconditioned
warehouse, and by forcing Stasan to locate the documents in over
200 banker boxes containing various business documents. The
imposition of these conditions, which appear to fall within the
context of discovery controlled by the federal rules in any
event, are not so unreasonable as to trigger the issuance of a
writ of mandamus as a matter of law. A writ under article 2.44
is not issued as a matter of right, but is instead the product of
judicial discretion. See Moore, 59 S.W.2d at 817.

                                     15
Stasan’s 300 shares of stock were to be issued in exchange for

Stasan’s “contribution of cash, property and/or labor.”         The stock

certificate, also issued by NSSI on July 1, 1994, further states

that Stasan’s shares were “fully paid and non-assessable.”         In May

1996, when Articles of Merger and a Plan of Merger were executed by

NSSI,   all   of   the   NSSI   shareholders   executed   a   Shareholder

Agreement, in which Stasan is listed as the largest of the seven

NSSI shareholders (owning 300 of the 890 shares then outstanding).

The Shareholder Agreement was signed by all the shareholders.

Minutes of the NSSI board of directors meeting of February 9, 1998,

in which both D. Logal and M. Logal attended, further reflect that

the directors of NSSI confirmed that the shareholders of the

corporation included E. Blumberg on behalf of Stasan.         Finally, in

the district court, NSSI, D. Logal and M. Logal alleged in their

initial Complaint that Stasan had obtained thirty percent of the

stock in NSSI in return for receivables financing provided by

Stasan’s owner R. Blumberg.       As found by the district court, the

record is filled with evidence demonstrating knowledge of the

issuance of Stasan’s stock by NSSI and the Logals, participation in

the issuance of this stock by NSSI and the Logals, and, up until

late 1999, an understanding by NSSI and the Logals that this stock

was validly issued.

     In the face of the overwhelming record, the district court

declined to adopt the view urged by NSSI and the Logals that none

of their actions prior to the pronouncement of their current

                                    16
position matters to the question of due consideration. We likewise

reject the notion that these corporate documents are meaningless to

our determination whether the 1994 stock issuance to Stasan should

be deemed without effect.       The corporate documents regarding the

value of the consideration received for the stock are key to the

validity of the stock issuance here.       In their briefing to this

court and at oral argument, NSSI and the Logals consistently resist

efforts to frame this issue under article 2.16 of the Texas

Business Corporation Act, which provides that “[i]n the absence of

fraud in the transaction, the judgment of the board of directors or

the shareholders . . ., as the case may be, as to the value and

sufficiency   of   consideration    received   for     shares   shall   be

conclusive.”28   Instead, they aver that this issue does not turn on

the   board   of   director’s     determination   of     the    value   of

consideration, but instead on whether any consideration at all was

paid for the stock.   In doing so, NSSI and the Logals constrict the

holding of the district court.          The court found that “Stasan

provided adequate consideration for the shares.” If support exists

for this finding, then the board’s determination of the value of

this consideration is conclusive.

      Whether Stasan gave any consideration for the stock would be

      28
          TEX. BUS. CORP. ACT art. 2.16(B) (Vernon Supp. 2001).
The court notes that section 5.02 of the NSSI bylaws in effect in
1994 when Stasan’s stock was issued tracks article 2.16 and
states that “in the absence of fraud in the transaction, the
judgment of the Board as to the value of consideration received
shall be conclusive.”

                                   17
an easier inquiry had the parties set forth in a written agreement

the specific consideration given for the 300 shares of stock.

Nonetheless, we agree with the district court that no question

remains as to whether some consideration was provided to NSSI by

Stasan for the stock.       As evidenced by the affidavit of R. Blumberg

and the supporting correspondence between him and M. Logal (dated

before the July 1, 1994 issuance), the overwhelming evidence

demonstrates     that,     before    its    issuance,   Stasan,     through    R.

Blumberg,     performed    services    related    to    providing     receivable

financing, allowed credit to be made available for NSSI, provided

NSSI with rights to Meridien Specialty Personnel Services, a

predecessor of NSSI, and counseled M. Logal on marketing and

business issues related to NSSI.29            Plainly, the record provides

ample support for the district court’s finding that consideration

was received.    As held by the district court, the determination by

the   board    regarding     the    sufficiency    of   the   value    of     this

consideration is “conclusive.”

      This is not to say that we disagree with NSSI’s contention

that stock issued without consideration is not validly issued.

Indeed, we concur with the suggestion that an issuance of stock


      29
          It appears that the district court may have also relied
on a loan of $49,950 from Stasan to NSSI as the basis for its
finding of consideration. While R. Blumberg provided a service
in setting up the loan, establishing bank accounts for NSSI, and
helping to provide receivable financing for NSSI, under article
2.16 and the NSSI by-laws which track this article, the loan
itself does not fulfill the requirement of consideration.

                                       18
without valid consideration is void under Texas law.30          We further

agree with the assertion that a corporation cannot, through its

conduct, ratify the issuance of stock where no consideration was

given for the shares.31        NSSI and the Logals were not barred from

introducing   evidence    to    dispute   whether   Stasan   furnished   any

consideration for its NSSI stock.32         In this case, however, they

have failed to persuade the district court.            Clear evidence of

consideration exists.

     To the extent the district court relied on McAlister v.

Eclipse Oil Co.,33 for the proposition that some form of corporate

estoppel prevents a corporation from contesting stock validity (in

this case, five years after its issuance) even if no consideration

for stock is given, we cannot concur.        McAlister is not so elastic

as to extend to situations where no consideration is provided, and

we decline to rule that the mere passage of time will transform a


     30
          See Vermilion Parish Peat Co. v. Green Belt Peat Moss
Co., 465 S.W.2d 950, 954 (Tex. Civ. App.—Dallas 1971, writ ref’d
n.r.e.).
     31
          See Gulf States Abrasive Mfg., Inc. v. Oertel, 489
S.W.2d 184, 188 (Tex. Civ. App.—Houston [1st Dist.] 1972, writ
ref’d n.r.e.); Vermilion Parish Peat Co., 465 S.W.2d at 954;
United States Steel Indus., Inc. v. Manhart, 405 S.W.2d 231, 233
(Tex. Civ. App.—Waco 1966, writ ref’d n.r.e.).
     32
          Miller v. Kendall, 804 S.W.2d 933, 941 (Tex. App.–
Houston [1st Dist.] 1995, no writ) (“We do not read Article 2.16,
which refers to the directors’ act in valuating consideration for
stock, as a parol evidence rule that bars the admission of
evidence that the corporation’s record of that act is
mistaken.”).
     33
          98 S.W.2d 171, 175-76 (Tex. 1936).

                                     19
void issuance into a valid one.34     A thread of equity runs through

the language in McAlister, but, at bottom, the stockholder whose

stock the corporation in McAlister was seeking to have declared

void had clearly provided consideration for the stock through

services and property.35   As in McAlister, the record before this

court supports a finding that Stasan provided some consideration

for the stock issued to it by NSSI.     NSSI’s efforts to now contest

the value of this consideration five years after the corporation

issued a “fully paid and non-assessable” stock certificate, a

determination that is virtually incontestable in the presence of

board approval, are imperiled by article 2.16(B).36

                             CONCLUSION

     All issues raised by the appellant and cross-appellants are

controlled by the Texas Business Corporation Act.     We AFFIRM the

district court’s judgment in all respects.




     34
          See, e.g., United Steel Ind. v. Manhart, 405 S.W.2d
231, 233 (Tex. Civ. App.—Waco 1966, writ ref’d n.r.e.) (“The
judgment of the board of directors ‘as to the value of
consideration received for shares’ is conclusive, but such does
not authorize the board to issue shares contrary to the
Constitution for services to be performed in the future . . . or
property not received . . . .”) (citation omitted).
     35
          Id. at 172, 175.
     36
          As the issue is not necessary to the court’s conclusion
in this case, the court restrains from embarking on an analysis
of the niceties of federal and state judicial estoppel.

                                 20
