Nonprofit Basics: How To Wind up a California Charity
A recent ruling by U.S. District Court Judge Anthony J. Battaglia addresses whether demand futility is an affirmative defense that must be asserted in an answer or raised in a motion to dismiss. In re Franklin Wireless, 2024...more
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
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
When an LLC suffers primary harm that also indirectly harms the LLC’s members, the cause of action generally belongs to the LLC, not its members. Only if the LLC (through its duly authorized management) fails to pursue the...more
I was perplexed by Judge Cindee F. Mayfield's repeated references to "derivate claims" in a recent unpublished opinion - JBB Investment Partners v. Fair, Cal. Ct. of Appeal Case No. No. A160098 (June 9, 2022). Was this a...more
In a ruling handed down this week, U.S. District Judge Lawrence J. O'Neill addressed whether California law applied to derivative claims apparently brought on behalf of an Oregon entity. I found Judge O'Neill's ruling...more
Earlier this week, Kevin M. LaCroix wrote about a lawsuit filed recently against The We Companies, commonly referred to as WeWork. The company has attracted a lot of press attention when in September it withdrew the...more
Section 800(b)(1) of the California Corporations Code imposes the following standing requirement for derivative lawsuits...more
California, unlike the federal government, has codified its prohibition on insider trading. Corporations Code Section 25402 provides...more
Yesterday, I took note of a recently introduced Nevada bill, AB 304, that would, among other things, allow a Nevada corporation to impose liability on a stockholder for attorney's fees and costs in connection with an...more
United States District Court Judge Haywood S. Stirling, Jr. yesterday blocked a stockholder's attempt to use California's shareholder inspection statute to gain access to a corporation's "books and records and minutes of...more
The North Carolina's Supreme Court's recently issued opinion in Azure Dolphin, LLC v. Barton, 2018 N.C. LEXIS 1036 caught my eye because it involved an interpretation of California Corporations Code Section 15910.02 which...more
Last spring, a derivative suit was filed in California Superior Court against certain of current and former directors and officers of Yahoo!, Inc. alleging breach of fiduciary duty in connection with the company's widely...more
As I have mentioned on numerous occasions, California has its own insider trading statute – California Corporations Code Section 25402. The statute is included in the California Corporate Securities Law of 1968. In general,...more
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
I have long puzzled over the question of which is correct – “derivative suit” or “derivative action”? Historically, the term “suit” was used for proceedings in equity. California courts have generally regarded shareholder...more
Corporations Code Section 2115 is not an easy read. Fortunately, California Supreme Court Chief Justice Tani Cantil-Sakauye has provided a more digestible overview of the statute...more
Some persons may be deemed to violate the Corporate Securities Law of 1968 even though they did not directly violate the law. Corporations Code Section 25403(a) provides that a person who with knowledge directly or...more
In 1990, California enacted the California Commodity Law, Stats. 1990, Ch. 969, Corp. Code § 29500 et seq. Although this law hasn’t attracted the attention of legal writers, it has some very sharp teeth, as illustrated by...more
Marvell Technology Group, Ltd. is a publicly traded company that is incorporated in Bermuda. Marvell’s U.S. operating subsidiary is based in California. A year ago, an institutional stockholder filed a derivative suit...more
California Corporations Code Section 800 governs derivative suits brought by both domestic and foreign corporations. The statute provides a modicum of protection to defendants by establishing a procedure by which either the...more