Today, the Nevada Assembly Judiciary Committee is holding a hearing on SB No. 95, a bill that would make numerous changes to Nevada's business entity statutes. One change would be to amend NRS 78.046 to authorize the...more
Yesterday's post concerned, a recent ruling by Vice Chancellor Sam Glasscock in Lacey v. Mota-Velasco, C.A. No. 2019-0312-SG (Del. Ch. Feb. 11, 2021). In finding that a director's duties are fiduciary, not contractual, the...more
Last summer, I considered the question of whether bylaws constitute a contract under California law. See Are Bylaws Contracts Under California Law? and Are Bylaws a Contract or Contracts? Earlier this month, Vice Chancellor...more
John Jenkins at DealLawyers.com took note yesterday of an interesting ruling by Vice Chancellor J. Travis Laster in Stream TV Networks v. SeeCubic, C.A. No. 2020-0310-JTL (Dec. 8, 2020). On issue in the case was whether...more
Writing for DealLawyers.com, John Jenkins yesterday took note of the Delaware Court of Chancery's decision in Pettry v. Gilead Sciences, (Del. Ch.; 11/20). Quoting this Cleary Gottlieb blog, John observes that Pettry...more
The same might be true of shareholder meetings. In general, there is only one way to get them right but a number of ways to get them wrong. Here are some ways to err...more
California, like many other states, imposes a demand requirement on shareholders who want to maintain a derivative action. Thus, Corporations Code Section 800(b)(2) requires that a plaintiff allege in its complaint with...more
NRS 78.138(3) imposes a statutory presumption that other than in cases of a change in control of the corporation, directors and officers, in deciding upon matters of business, act in good faith, on an informed basis and with...more
Yesterday's post discussed Judge Mary Kay Vyskocil's ruling in Barenbaum v. Palleschi, 2020 U.S. Dist. LEXIS 180624 that the plaintiff's derivative claims were not "validly in litigation". The case involved allegations that...more
A shareholder bringing a derivative claim, faces a choice. The shareholder can either make a demand on the board of directors and then challenge the board's decision not to proceed or file a complaint alleging that the...more
What, if any, is the standing of a corporation in a derivative action? Until this month, that question was yet to be addressed by the Nevada Supreme Court. We now have an answer....more
In this recent post, UCLA Law School Professor Stephen Bainbridge discusses Vice Chancellor J. Travis Laster's recent ruling that "stockholder inspection rights are a core matter of internal corporate affairs." 2020 Del....more
In 2016, the Delaware Court of Chancery famously put the brakes on disclosure only settlements, warning "to the extent that litigants continue to pursue disclosure settlements, they can expect that the Court will be...more
California Corporations Code Section 409(e) imposes a duty on the board of directors to determine "the fair value to the corporation in monetary terms of any consideration other than money for which shares are issued". Does a...more
Section 1800 of the California Corporations Code provides a procedure for the involuntary dissolution of a corporation. The process begins with the filing of a verified complaint, but only those persons listed in the statute...more
California, unlike the federal government, has codified its prohibition on insider trading. Corporations Code Section 25402 provides...more
A derivative claim is one brought by a shareholder on behalf of the corporation to recover for harm done to the corporation. Cohen v. Mirage Resorts, Inc., 62 P.3d 720, 732 (Nev. 2003). However, when a derivative action is...more
NantKwest, Inc. describes itself as "a pioneering clinical-stage immunotherapy biotechnology company headquartered in San Diego, California with certain operations in Culver City and El Segundo, California and Woburn,...more
A popular claim for plaintiffs in derivative litigation against directors of Delaware corporations has been that the directors breached their duty of oversight. This theory has its genesis in Chancellor William T. Allen's...more
The wheels of justice turn slowly. Two years ago, I wrote about Judge Robert C. Jones's ruling in Weinfeld v. Minor, 2016 U.S. Dist. LEXIS 30117 (D. Nev. Mar. 8, 2016). In that ruling, Judge Jones tackled tackled the...more
When bad things happen to corporations, derivative suits are sure to follow. So it was for Galectin Therapeutics, Inc., a Nevada corporation. Following publication of allegations of a "stock promotion scheme", stockholders...more
Shortly before leaving Delaware's Court of Chancery in 2015, Vice Chancellor Donald F. Parsons issued a decision that is widely known for the conclusion that Section 205 of the Delaware General Corporation Law does not...more
In Archon v. Eight Jud. Dist. Ct., 133 Nev. Adv. Op. 101 (2017), the Nevada Supreme Court provides a concise explanation of the uses of mandamus and administrative mandamus as escape hatches from the final judgment rule. The...more
A couple of years ago, I taught Administrative Law at the University of California, Irvine School of Law. One of the many theories that we covered was the idea of “regulatory capture”. This is a “term coined by public...more
Our November 16, 2017 post discussed one aspect of the California Court of Appeal’s opinion in Central Laborers’ Pension Fund v. McAfee, Inc., 2017 Cal. App. LEXIS 1008. The case arose from Intel Corporation’s acquisition of...more