Like many questions in the law, the answer to the question of whether a member of a California nonprofit corporation may maintain a derivative action is "it depends"....more
In Palkon v. Maffei, 2024 WL 678204 (Del. Ch. Feb. 20, 2024), the plaintiffs sought to enjoin the proposed conversions of TripAdvisor, Inc. and Liberty TripAdvisor Holdings, Inc. into Nevada. As noted in this post, Vice...more
Professor Stephen Bainbridge recently commented on a decision by Vice Chancellor J. Travis Laster finding that Section 141(a) of the Delaware General Corporation Law trumps most of the provisions of a so-called "new wave"...more
Ten years ago, I questioned in this space whether a Delaware forum selection charter provision would survive constitutional scrutiny if it involved a de facto waiver of a jury trial...more
In a recent blog post on the Business Law Prof Blog, Tulane Law professor Ann M. Lipton opined...more
9/19/2023
/ Board of Directors ,
Breach of Duty ,
Cannabis-Related Businesses (CRBs) ,
Corporate Governance ,
Corporate Misconduct ,
Corporate Officers ,
Fiduciary Duty ,
Illegal Conduct ,
Marijuana ,
Shareholder Litigation ,
Shareholders
One popular theory of the corporation is that it is a nexus of contracts. As Frank Easterbrook and Daniel Fischel pithily pronounced "Corporations are enduring (relational) contracts." F. Easterbrook and D. Fischel, The...more
The California Code of Civil Procedure sets forth the general rules governing the service of summons. Cal. Code Civ. Proc. §§ 415.10 - 415.95. Chapter 17 of the General Corporation Law adds to these provisions. In some...more
UCLA Law Professor Stephen Bainbridge recently answered the question of whether shareholders may remove a corporation's chief executive officer and chairman of the board from a Delaware perspective. Like Delaware, California...more
It is sometimes said that California Corporations Code section 2116 "codifies" the internal affairs doctrine. See, e.g., Drulias v. 1st Century Bancshares, Inc., 30 Cal. App. 5th 696, 705, 241 Cal. Rptr. 3d 843, 851...more
Section 800 of the California Corporations Code applies to actions brought in the name of any domestic or foreign corporation, aka derivative actions. It is similar, but not the same as, Delaware Court of Chancery Rule 23.1...more
Over the years, I have commented on the fact that the California Court of Appeal has yet to apply In re Caremark International Inc., 698 A.2d 959 (Del. Ch. 1996) to the directors of a California corporation. Last Friday,...more
The last several posts have been examining the definition, or lack thereof, of the term "officer". The term is widely used, but is not necessarily defined by in corporation laws. As noted in the first of these posts,...more
In yesterday's post, I posited that Delaware does and doesn't define "officer". For the proposition that Delaware defines the term, I cited Delaware's deemed consent statute - 10 Del. Code § 3114. That statute, however,...more
As a voice crying in the wilderness, I have for many years proclaimed that the internal affairs doctrine is not as all-encompassing as Delaware and its devotees would like to believe. The limitations on the internal affairs...more
In a recent feature published by the Washington Legal Foundation, UCLA Professor Stephen Bainbridge casts a jaundiced eye toward Vice Chancellor J. Travis Laster's recent ruling in In re McDonald's Corp. Stockholder Deriv....more
Four years ago, I wrote about an unpublished decision by the Court of Appeal concerning shareholder inspection rights under the California General Corporation Law. The denouement of that opinion was that the shareholder was...more
Delaware's decision last summer to amend Section 102(b)(7) to permit the exculpation of certain officers for direct (but not derivative) stockholder suits for monetary damages for breach of fiduciary duty is attracting a...more
Earlier this month the Electrical Workers Pension Fund, Local 103, I.B.E.W. filed a verified class action complaint in the Delaware Court of Chancery against Fox Corporation. (Case No. 2022-1007-MTZ (filed Nov. 4, 2022)). ...more
Effective August 1, 2022, Delaware amended Section 102(b)(7) of its General Corporation Law to allow a Delaware corporation to include in its certificate of incorporation a provision exculpating certain of its officers. ...more
The Nicene Creed as approved by the Council of Constantinople in 381 A.D. included the following: "τὸ ἐκ τοῦ πατρὸς ἐκπορευόμενον (who proceeds from the father). About 200 years later at the Third Council of Toledo, the...more
Five years ago, I noted that the Nevada Supreme Court had adopted New York's more deferential approach for assessing special litigation qualifications in Auerbach v. Bennett, 393 N.E.2d 994 (N.Y. 1979) over that of the...more
The California Constitution declares that trial by jury is an "inviolate right" that "shall be secured to all". Cal. Const. Art. I, §16. Despite this expansive language, this right in the civil context is generally limited...more
Historically, the alter ego doctrine has been applied to hold a shareholder or shareholders liable for the claims made against the corporation. In general, two requirements must be met for the doctrine to be applied. First,...more
Having read Professor Stephen Bainbridge's post about the origins of the judicial doctrine that directors must act on an informed basis, I passed along a reference to the California Supreme Court's in Fox v. Hale & Norcross...more
Yesterday, John Jenkins wrote about Delaware's decision to amend Section 102(b)(7) to permit the exculpation corporate officers. Until now, Delaware only permitted the certificate of incorporation to exculpate directors. For...more