Guth v. Loft: The Story of Pepsi-Cola and the Corporate Opportunity Doctrine

Abstract

Guth v. Loft is known as the leading case in defining the modern corporate opportunity doctrine. The case, involving a dispute between Charles G. Guth and a company he once directed, Loft, Inc., transformed the law at the time to meet the needs of the changing corporate structure in the early twentieth-century. While the legal ramifications of the 1939 Delaware Supreme Court opinion have generated much attention and scholarship, the complex factual situation between Guth and Loft played an important, yet often overlooked, role in the decision that ultimately determined the ownership of one of America’s best-known soda companies, Pepsi-Cola. This paper examines the story behind the famous case.

Keywords: Guth v. Loft, corporate opportunity doctrine, corporate story, Pepsi-Cola

JEL Classification: K10, K22