Sections 706 (d) and 716 (c) of the Business Corporation Law (the “BCL”) both contain a “for cause” standard for judicial removal of corporate directors and officers. Complaints with claims for judicial corporate director and...more
The right of shareholders to elect a corporation’s directors is one of the most valuable rights attendant to share ownership. Election of directors is where shareholders can directly exert their influence on the corporation,...more
Broc Romanek at The Mentor Blog has been writing about publicly traded companies that reportedly continue charter provisions allowing shareholders to remove directors only for "cause". Section 303 of the California...more
In Garcia v. Communities in Schools of Brazoria County, a director sued a nonprofit’s board for breach of fiduciary duty arising from his removal. 2019 U.S. Dist. LEXIS 97017 (S. D. Tex. June 10, 2019)....more
Generally, a board of directors of a California corporation may not remove one of its members. Removal of a director is in most cases the province of the shareholders. Thus, Section 303 of the Corporations Code allows the...more
Yesterday's post told of Dick Plantagenet's "winter of discontent" when learned of Henry Tudor's demand to inspect the books, records, and minutes of his small Delaware corporation, Cwmni Cyfyngedig, Inc. ("CCL"). Henry...more
In the past year, more than 50 publicly traded companies, including 19 on the Standard & Poor’s 500 index, have amended their bylaws to address the potential for a so-called “placeholder slate” of directors. The bylaw...more
Section 141(d) of the Delaware General Corporation Law provides that the directors of any corporation may “be divided into 1, 2, or 3 classes”. It’s hard to make sense of this statement. First, I don’t believe that Delaware...more
In a September 11, 2015, decision, the Delaware Chancery Court denied a former officer and director advance reimbursement of legal fees in a dispute with his company, despite his insistence that multiple corporate documents...more
Given the sanctity of the stockholder vote in Delaware law, it would be surprising if the Court of Chancery would ever reverse such a vote or the use of stockholder consents to take corporate action....more