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Does California Side With Delaware Or New York On Special Litigation Committee Reviews?

As discussed in the two preceding posts, Nevada’s Supreme Court last week decided to adopt New York’s standard of review of special litigation committee recommendations to dismiss stockholder derivative suits. In re Dish...more

Nevada Favors New York Over Delaware Precedent For SLC Review

Nevada law endows a board of directors “full control over the affairs of the corporation”. NRS 78.120(1). This control is subject only to such limitations as may be provided by NRS chapter 7, or the articles of...more

More On Suing The CEO For Social Activism

The last few days, I’ve been writing about the legal issues raised by Jon L. Pritchett and Ed Tiryakian in a recent opinion piece published by The Wall Street Journal. To sum up the discussion so far, Professor Stephen...more

Suing The CEO For Social Activism Is Likely To Be Challenging Under Nevada Law

Yesterday’s post concerned asked the question whether shareholders can sue CEOs for social activism. The answer is of course, yes. The more interesting question is whether shareholders will win the suit. To answer that...more

Can Shareholders Sue CEOs For Corporate Social Activism?

In an August 17, 2017 opinion piece published in The Wall Street Journal, Jon L. Pritchett and Ed Tiryakian had the following message for shareholders...more

California And Van Gorkom

As a corporate lawyer, it is hard to ignore the Delaware Supreme Court’s opinion in Smith v. Van Gorkom, 488 A.2d 858 (1985) overruled on other grounds Gantler v. Stephens, 965 A.2d 695 (Del. 2009). Professor Stephen...more

Officers And The Business Judgment Rule

Last weekend I attended a symposium at the UCLA School of Law entitled “Can Delaware Be Dethroned? Evaluating Delaware’s Dominance of Corporate Law”. The event, organized by ever erudite Professor Stephen Bainbridge,...more

Officers: Got Business Judgment Rule? Nevada Says Yes, Delaware Maybe Not

Francis Pileggi writes about a recent ruling by U.S. District Judge Sue L. Robinson in which she refused to consider whether the business judgment rule applied to officers of a Delaware corporation...more

Are A Breach Of Fiduciary Duty And A Breach Of Governing Documents “Non Bis In Idem”?

Last week, I discussed the Court of Appeal’s consideration of whether the business judgment rule protects a director from claims based on breach of the corporation’s governing documents. See Does The Business Judgment Rule...more

Does The Business Judgment Rule Protect Directors Who Violate Governing Documents?

Under the business judgment rule, a director will not be liable for a mistake in business judgment provided that certain conditions are met. In the case of a California nonprofit mutual benefit corporation, a director who...more

Who Decides Whether A Shareholder Has Complied With An Advance Notice Bylaw?

UCLA Professor Stephen Bainbridge asked the following question concerning advance notice bylaw provisions in “The Professor is Stumped: Today’s Corporate Law Question“...more

The Most Important Principles of Delaware Corporate Law Can’t Be Found In the DGCL

I have often observed that you can read every section of the Delaware General Corporation Law and learn almost nothing about Delaware corporate law.  Here are three of the most fundamental principles of Delaware corporate law...more

The California Political Contribution Case That 19 Law Professors Missed

Earlier this week, I wrote about an amicus curiae brief submitted by 19 law school professors Friedrichs v. Cal. Teachers Ass’n, a case now pending before the United States Supreme Court. In particular, I questioned whether...more

Did 19 Law Professors Get The Business Judgment Rule Wrong?

In yesterday’s post, I wrote about the amicus curiae brief filed by 19 law school professors in Friedrichs v. California Teachers Ass’n, a case now pending before the United States Supreme Court.  Being a California corporate...more

Chancellor Bouchard Rules There Can Be No Ratification Without Works

In reading Chancellor Andre G. Bouchard’s ruling yesterday in Espinoza v. Zuckerberg, 2015 Del. Ch. LEXIS 273 (Del. Ch. 2015), I was reminded of the theological debate among Christians concerning justification by faith.  The...more

California, Nevada and 38 Other States Have These, But Delaware Doesn’t

According to the National Center for State Courts, forty states, including California and Nevada, have established intermediate courts of appeal.  California’s Court of Appeal was established by a constitutional amendment...more

No Calm In Delaware After Calma v. Templeton

In derivative suits, cases are essentially lost and won at the motion to dismiss stage.  Unless the defendants succeed in winning dismissal, they must confront an unhappy choice between continued litigation with all of its...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

Another Federal Judge Spurns Application Of The Business Judgment Rule To Officers

Last week, I covered the choice of law issue in FDIC v. Faigin, 2013 U.S. Dist. LEXIS 94899 (C.D. Cal. July 8, 2013) and promised more, When The Parent Is A Blue Hen And The Subsidiary Is A 49er, What Law Governs?...more

Officers And The Business Judgment Rule

Recently, I came across the following assertion: First, other than the recent aberration of Poggetto v. Switzer , the BJR has never been applied to officers in California....more

Court Of Appeal Finds Error In Refusal To Give “Business Judgment” Instruction To Jury

Justice Russell C. Ostrander: “judges are not business experts.” Dodge v. Ford Motor Co., 204 Mich. 459, 508 (1919) A few days ago, I wrote about U.S. District Court Judge Dale S. Fischer’s refusal to extend the...more

Can Officers Contract For The Business Judgment Rule?

Yesterday, I wrote about a recent memorandum opinion by U.S. District Court Judge Dale S. Fischer that led to a jury verdict awarding nearly $169 million in damages against three former corporate officers. Among other things,...more

Is FDIC v. Van Dellem California’s Smith v. Van Gorkom?

Last Friday, the jury in FDIC v. Van Dellem (C.D. Cal. Case No. CV 10-4915 DSF (SHx)) returned a verdict totalling nearly $169 million against three former officers of the home builder division of IndyMac Bank, F.S.B. The...more

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