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Getting To The Point On Director Elections

Last week in The Mentor Blog, Broc Romanek mentioned a blog posting of mine from September 2015: Was This Director Duly Elected Or Appointed? My post was concerned Intelligent Digital Systems, LLC v. Beazley Ins. Co., Inc.,...more

When Partnership “Members” Are Employees

Last week, I wrote about how AB 2883 changes the definition of “employee” vis-a-vis corporate directors. See Is A Corporate Director An Employee Subject To Workers’ Compensation? AB 2883 also rewrites the definition of...more

Pay By Another Name Might Be Salt

Yesterday’s post concerned the classification of directors and officers as employees for purposes of California’s workers’ compensation law. Effective January 1, 2017, California Labor Code Section 3351(c) will define...more

This Company Solicited Consents To Remove A Sitting Director

It’s not often that you see a company soliciting consents to remove one of its sitting directors. However, that is what PICO Holdings, Inc. sought to do in this consent solicitation statement filed with the SEC on October...more

In California, Directors Who Abstain May Still Face Liability

Section 316(a) of the California Corporations Code imposes joint and several liability on directors who approve any of the following actions...more

Verifying The Identity Of Directors

Sometimes, you just can’t be sure whether about the identity of a corporation’s directors. Doubt can arise for a number of reasons. Corporate records may be lost entirely. Corporate records may be incomplete or...more

The Misleading Case For A Majority Vote Standard

Proponents of a majority vote requirement for the election of directors often decry the fact that under a plurality vote standard, a director can win with a single vote.  For example, the 2015 proxy statement of Nabors...more

ISS Proposes To Go Overboard In Proposed Policy Change

Institutional Shareholder Services Inc. (ISS) is a very influential purveyor of proxy advisory services.  As part of ISS’ annual policy update procedure, ISS recently released a proposed policy change with respect to...more

Court Rules Directors Are Agents

Last August, I wrote that Magistrate Judge Joseph C. Spero would soon be deciding whether a director might be an agent of the corporation.  See Court Poised To Decide Whether Directors Are Agents.  The case, Wadler v. Bio-Rad...more

Court Poised To Decide Whether Directors Are Agents

Not quite four years ago, I wrote about whether directors are agents. The post was prompted by then Chancellor William B. Chandler III’s assertion...more

Court Rules Unincorporated Association Aided Director’s Breach Of Fiduciary Duty

Nearly four years ago, I devoted this post about California’s Unincorporated Association Law. Typically, an unincorporated association is a club, church, or other social organization. A criminal street gang might also be an...more

Are Delaware Directors Deathless?

I’ve noticed that the drafters of corporate laws seemed to have overlooked the mortality of directors.  Section 141(b) of the Delaware General Corporation Law, for example, prescribes the term of directors as follows...more

Email Notice Without Consent Is Not Notice

The California General Corporation Law unequivocally authorizes the giving of notice of stockholder meetings by electronic transmission. Section 601(b) provides “Notice of a shareholders’ meeting or any report shall be given...more

Director Claims That She Ne’er Consented, Court Finds Consent

Last April, I warned that October 1, 2014 would be a critical day for directors of Nevada corporations. See link below.  Now, we have a case giving proof to my warning.  Advanced Vision Solutions, Inc. v. Lehman, 2015 U.S....more

Court Refuses To Break Board Deadlock By Appointing A Provisional Director

Section 308 of the California Corporations Code provides for the appointment of a provisional director when a corporation has an even number of directors who are equally divided and cannot agree as to the management of the...more

9th Circuit Upholds Issue Preclusion In Subsequent Derivative Suit

Derivative suits rarely arrive alone. When something goes awry, directors and officers can be expected to see multiple suits based on demand futility as well as wrongful demand refusal. Often, suits will be filed at...more

Nevada’s Business Judgment Rule: FDIC – 4; Management – 0

In recent weeks, the U.S. District Court has issued four separate rulings in cases brought by the Federal Deposit Insurance Corporation (FDIC) against former bank managers for breach of fiduciary duty. Here is a brief recap...more

Can An Employment Agreement Be A Wee Bit Too Integrated?

The Bylaws of many public companies provide for mandatory indemnification of directors and officers (and sometimes other agents as well). Often, Bylaws describe these indemnity obligations as contract rights. For example...more

Forum Selection Clauses Were Here Before They Were In Bylaws

Recent rulings by judges in Delaware and other states have given impetus to the adoption of exclusive forum bylaws. To the casual observer, the idea might seem entirely novel. But as Koheleth (the Gatherer) wrote “What has...more

Why Does Determining A Quorum Have To Be So Complicated?

California’s quorum requirement for meetings of directors appears on its face to be straightforward – a majority of the authorized number of directors constitutes a quorum of the board for the transaction of business. Cal....more

Bill Aims At Clarifying Status Of Ex Officio Directors

Yesterday’s post considered the various paths to becoming a director under the California General Corporation Law. The California Nonprofit Corporation Law defines “directors” in a similar fashion but makes it clear that the...more

Just How Many Ways Are There To Become A Director?

Lao Tzu is said to have written that there a many paths to enlightment, but how many paths are there to becoming a director? To answer the question, let’s look at the definition of “directors” in the California General...more

10/2/2014  /  Board of Directors , Directors

When A Corporation Dissolves, Do The Directors Become Zombies?

Even though a corporation has dissolved, there may still be a need to take certain corporate actions. For example, the corporation may need to continue to prosecute or defend lawsuits, file a final franchise tax return, or...more

Company Sues Former Officer For Failing To File Form 4s

A complaint filed in the Central District of California caught my eye because it involved the rather unusual circumstance of a corporation suing a former director and officer for, among other things, failing to file reports...more

Does A Director Have A Contractual Right To Compensation?

Yesterday, I wrote about stockholder challenges to director compensation. Today’s post considers what happens when a director joins a board. When someone is invited to join a board, she may ask about compensation. The...more

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