News & Analysis as of

Internal Affairs Doctrine

Veil Piercing/Alter Ego Determinations – How Fund Managers Can Protect Themselves

A veil piercing claim can be a worst-case scenario for a private fund manager dealing with a struggling portfolio company investment – the company fails, and ensuing legal claims are brought not only against the portfolio...more

Officers Of Foreign Corporations And The California Courts

by Allen Matkins on

Yesterday’s post concerned Section 2116 of the California Corporations Code. Courts sometimes describe Section 2116 as codifying the internal affairs doctrine. See, e.g., Vaughn v. LJ Internat., Inc., 174 Cal. App. 4th 213,...more

Nevada Legislature Mulls Codification Of The Internal Affairs Doctrine

by Allen Matkins on

Delaware and Nevada are each in the business of marketing their corporate laws to businesses in other states. Thus, it should surprise no one that these states don’t appreciate it when their legal offerings are undermined by...more

Internal Affairs Doctrine Leads To Dismissal Of An Aiding And Abetting A Breach Of Fiduciary Duty Claim By NC Business Court

by Brooks Pierce on

A lot of North Carolina court decisions have questioned whether a claim for "aiding and abetting a breach of fiduciary duty" can be made in North Carolina (many of them are cited in ¶16 of the Islet Sciences Opinion...more

Court Rejects Challenge To Internal Affairs Doctrine

by Allen Matkins on

Marvell Technology Group, Ltd. is a publicly traded company that is incorporated in Bermuda. Marvell’s U.S. operating subsidiary is based in California. A year ago, an institutional stockholder filed a derivative suit...more

Which Code Applies When A Stock Certificate Has Been Lost, Destroyed Or Wrongfully Taken?

by Allen Matkins on

Earlier this week, I wrote about Judge Edward M. Chen’s ruling in Sender v. Franklin Res., Inc., 2015 U.S. Dist. LEXIS 171453, 3-4 (N.D. Cal. Dec. 22, 2015). Judge Chen applied California Corporations Code Section 419 to a...more

The Fundamental Distinction Overlooked By The SEC

by Allen Matkins on

Yesterday marked the close of the comment period on the SEC’s proposed incentive compensation clawback rules.  You can read my comments here.  The proposed rules are fundamentally flawed because the SEC failed to recognize...more

Officers And The Internal Affairs Doctrine

by Allen Matkins on

My guess is that most attorneys would say that the duty of an officer to the corporation are governed by the law of the state of incorporation under the “internal affairs doctrine”.  As explained by the U.S. Supreme Court,...more

Impact of Delaware Fee-Shifting Provisions on Derivative Actions in California

by Snell & Wilmer on

A recent decision in the Delaware Supreme Court, in conjunction with the broad California exceptions to the internal affairs doctrine, may dictate the legal landscape of shareholder litigation in California in the near...more

Delaware Supreme Court to Chancery: You Have Broad Powers

by Morris James LLP on

Books-and-records litigation does not typically grab headlines. In fact, few cases litigated under Section 220 of the Delaware General Corporation Law result in written opinions authored by the Delaware Supreme Court....more

Stockholder Inspections Of Delaware Corporations In California

by Allen Matkins on

In United Techs. Corp. v. Treppel, 2014 Del. LEXIS 608 (Del. Dec. 23, 2014), the Delaware Supreme Court held that the Court of Chancery had authority to condition a stockholder’s inspection under Section 220 of the Delaware...more

Forum Selection Clauses Were Here Before They Were In Bylaws

by Allen Matkins on

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

Internal Affairs Doctrine May Not Control Alter Ego Liability

by Allen Matkins on

The internal affairs doctrine “is a conflict of laws principle which recognizes that only one State should have the authority to regulate a corporation’s internal affairs — matters peculiar to the relationships among or...more

A Shot In A Mug Of Beer May Not Be The Answer To This Exclusive Forum Bylaw Case

by Allen Matkins on

In March, Safeway and Albertsons announced that they had entered into a definitive merger agreement. As night follows day, litigation ensued. At least 12 class action complaints were filed by alleged stockholders of...more

When The Parent Is A Blue Hen And The Subsidiary Is A 49er, What Law Governs?

by Allen Matkins on

With most publicly traded companies choosing to incorporate in Delaware, corporate officers are likely to assume that they have the benefit of Delaware law. Assumptions sometimes can be wrong....more

Usurpation Of Corporate Opportunity Yields Preliminary Injunction

by Brooks Pierce on

A breach of fiduciary duty by the Defendants resulted in a sweeping preliminary injunction in an Order entered by the Business Court last Friday, in Esposito v. Esposito....more

Delaware and California Courts Split as to Whether a Reverse Triangular Merger Results In an Assignment By Operation of Law,...

In Meso Scale Diagnostics, LLC v. Roche Diagnostics GmbH, C.A. No. 5589-VCP, 2013 WL 911118 (Del. Ch. Feb. 22, 2013, rev. Mar. 8, 2013), the Delaware Court of Chancery held that a reverse triangular merger does not result in...more

Delaware Supreme Court Upholds Federalism, Comity & Finality

by Allen Matkins on

In Delaware Court of Chancery “Overrules” Federal Court, I discussed Vice Chancellor J. Travis Laster’s opinion in Louisiana Municipal Police Employees’ Retirement System v. Pyott, C.A. No. 5795-VCL (Del. Ch. June 11, 2012)....more

What Doth The Alter Ego Doctrine Require Of Thee, But To “Do Justice”?

by Allen Matkins on

Yesterday’s post briefly discussed the internal affairs doctrine and alter ego claims. Professor Stephen Bainbridge responded with this post which discusses the approaches of courts in New York and Delaware. Professor...more

Alter Ego And The Internal Affairs Doctrine

by Allen Matkins on

The internal affairs doctrine is a conflict of laws principle that recognizes that only one state should have the authority to regulate a corporation’s internal affairs. Under the internal affairs doctrine, that special state...more

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