In a recent post, Professor Stephen Bainbridge discusses the question of when a controlling shareholder owes fiduciary duties to minority shareholders. Knowing when controlling shareholder owes fiduciary duties is one thing,...more
My last few posts have been devoted to the Court of Appeal's opinion in Tuli v. Specialty Surgical Center of Thousand Oaks, LLC, 2024 WL 4499271 (Oct. 16, 2024). The case relates to the plaintiff's "decade-long litigation...more
Under the business judgment rule, "a director is not liable for a mistaken business judgment which is made in good faith and in what he or she believes to be in the best interest of the corporation, where no conflict of...more
Many corporations pay significant amounts for directors and officers liability policies. Commonly referred to as D&O policies, these policies usually involve three sides. Directors and officers are likely to have the most...more
Last week, the Securities and Exchange Commission announced that it had settled charges against a broker-dealer and two investment advisers for impeding their clients from reporting securities law violations to the SEC. ...more
Yesterday, the Fourth District Court of Appeal issued a noteworthy opinion addressing at least two significant questions. Samuelian v. Life Generations Healthcare, LLC, 2024 WL 3878448....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
Nevada famously limits directors and officers from personal liability. However, it would be an overstatement to say that Nevada is a "liability free" jurisdiction. For example, the Nevada Supreme Court recently held that...more
5/31/2024
/ Acquisitions ,
Board of Directors ,
Breach of Duty ,
Corporate Governance ,
Corporate Officers ,
Fiduciary Duty ,
NV Supreme Court ,
Parent Corporation ,
Shareholder Litigation ,
Shareholders ,
Subsidiaries
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 reason years, many companies and some investors have embraced ESG (environmental, social and governance) objectives. The move to embrace ESG has led to an "escalating backlash" according to The Conference Board. Now,...more
On December 12, 2023, the Harvard Corporation unanimously reaffirmed its support for President Claudine Gay's continued leadership despite her controversial testimony before the U.S. Congress and allegations of plagiarism. ...more
Of late, Harvard has garnered an abundance of attention regarding the continued incumbency of its President. Despite widely criticized testimony before Congress and the publication of allegations of plagiarism, the Harvard...more
California's Uniform Partnership Act of 1994 provides that a partner has a duty to refrain from competing with the partnership in the conduct of the partnership business "before the dissolution of the partnership". Cal....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
Section 204(a)(10) of the California Corporations Code permits the articles of incorporation to include provisions eliminating or limiting the personal liability of a director for monetary damages in an action brought by or...more
In a recent post, UCLA Professor Stephen Bainbridge concludes: "And the law is that suits claiming woke directors breached their fiduciary duties by their decisions about how the corporation behaves in the political arena are...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
I have recently written about TripAdvisor's proposal to redomesticate, by conversion, from Delaware to Nevada. The first reason given for the move in TripAdvisor's proxy statement is saving money...more
I am often struck by the fact that the California General Corporation Law simply fails to address many very basic questions of corporate law and procedure, including the following...more
Last week, I wrote about a pending challenge to the proposed redomestications of TripAdvisor, Inc. and Liberty TripAdvisor Holdings, Inc. from Delaware to Nevada. The plaintiffs are claiming that these redomestications would...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
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
Vice Chancellor J. Travis Laster's recently ruled that McDonald's Corporation's former Executive Vice President and Global Chief People Officer, David Fairhurst, owed a duty of oversight comparable to the duty articulated by...more