Corporations reincorporating in Texas to take advantage of the Texas Business Court now have new case law support. The Delaware Court of Chancery recently held that a Texas forum bylaw adopted by a company moving to Texas...more
In a recent decision, the Delaware Court of Chancery applied the Delaware General Corporation Law’s Moelis Amendment in finding that a non-Delaware forum selection clause in a CEO’s employment agreement overrode the...more
As I have written in the past, and repeat here, the statutes and judge-made law governing disputes among co-owners of closely held entities can vary significantly from state to state. Depending on the state, there also can be...more
On December 1, 2025, Vice Chancellor Lori W. Will of the Delaware Court of Chancery dismissed with prejudice a derivative breach of fiduciary duty claim against a former director and officer of a closely held corporation...more
Bad behavior in the workplace is in many instances a legal wrong that leads to legal consequences. Sexual harassment, for example, leads to consequences under tort and employment law. But if the perpetrator is a director or...more
For close business owners and their attorneys embarking upon a major litigated business dispute, it is not unreasonable to want to know with certainty which state or nation’s laws they can expect the court to apply over the...more
Under the “internal affairs doctrine,” the laws of an LLC’s state of formation will usually govern matters concerning its internal affairs — i.e., matters peculiar to the relationships among or between the entity and its...more
The first half of 2025 saw numerous developments in the strategies and counterstrategies between corporations and their stockholders in efforts to find the most favorable law and courts to decide disputes between them....more
Ezrasons, Inc. v. Rudd, No. 2, --- N.E.3d ---, 2025 WL 1436000 (May 20, 2025) - “Few principles are more firmly entrenched in corporate law than the internal affairs doctrine, a choice-of-law rule providing that, with rare...more
Section 626 of New York’s Business Corporation Law governs standing to sue derivatively in New York. It states that “an action may be brought in the right of a domestic or foreign corporation . . . by a holder of shares or...more
In Ezrasons, Inc. v. Rudd, 2025 NY Slip Op. 03008, 2025 N.Y. LEXIS 717 (N.Y. May 20, 2025), the New York Court of Appeals reaffirmed the fundamental and controlling nature of the internal affairs doctrine as it relates to the...more
On May 20, 2025, the New York Court of Appeals affirmed the dismissal of a derivative action asserting claims for breach of fiduciary duty against officers and directors of a corporation incorporated under the laws of England...more
On May 19, 2025, Texas Gov. Greg Abbott signed Senate Bill No. 1057 (SB 1057) into law....more
Courts are wont to say that Section 2116 of the California Corporations Code codifies the internal affairs doctrine. See Villari v. Mozilo, 208 Cal. App. 4th 1470, 1478 n.8 (Cal. Ct. App. 2012) (“Corporations Code section...more
In a prior LLC Jungle post — Think Carefully Before Forming an “Out of State” LLC — we reviewed a published opinion (Boschetti v. Pacific Bay Investments Inc.) holding that a claim for Judicial Dissolution of an LLC was...more
A recent Ninth Circuit decision clarifies employers’ obligations to address hostile work environment complaints arising out of employees' off-premises social media activity. In Okonowsky v. Garland (No. 23-55404; Jul. 25,...more
California's Revised Uniform Limited Liability Company Act provides "The law of the state . . . under which a foreign limited liability company is formed governs all of the following: The organization of the limited liability...more
It’s not every day that New York’s highest court considers a question impacting the business divorce cases that we typically litigate. And even when an interesting business divorce issue does make its way up to Albany, it’s...more
On May 23, 2024, the New York Court of Appeals reversed the dismissal of breach of fiduciary duty claims brought by former shareholders of a fantasy sports company (the “Company”) against its directors and other defendants...more
Last week, I wrote about a recent Delaware case involving an attempt to enforce a non-compete provision in a limited liability company agreement. Sunder Energy, LLC v. Jackson, 2023 WL 8166517. The case was brought in the...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
By: Jeffrey M. Haber 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...more
Choice-of-law questions in shareholder derivative lawsuits venued in New York courts involving out-of-state or international entities can be confoundingly difficult, even for appeals court judges....more
Tulane Law School Professor Ann M. Lipton at Tulane Law School begins her forthcoming, Inside Out (or, One State to Rule them All): New Challenges to the Internal Affairs Doctrine, by quoting Delaware Vice Chancellor J....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