A court is supposed to enforce such a Bylaw provison, as long as it is fair and reasonable and was determined and put in the Bylaws in a manner which was fair and reasonable. If your brother opposed this Bylaw provision, it might not be enforced. His opposition, if proven, would be strong evidence that the provision was not fair and reasonable.
The surviving spouse does not get to extort any price she can get away with. The court will determine a fair price. That can get expensive, with expert witnesses on both sides fighting it out.
She and her child are still familiy. You might consider keeping them in the company. Otherwise, at least offer them a fair and reasonable price. If they don't ask for too much more, giving in might be cheaper than going to court.
I have litigated such cases and settled them. If you would like me to assist you, please email me at ds@sackrosendin.com or call me in Oakland, CA at 510-286-2200.
Answered on Jul 12th, 2013 at 9:06 PM