Does The In Pari Delicto Defense Apply In Derivative Actions?
“In pari delicto” is a Latin phrase meaning in equal fault. It is an equitable defense that precludes a plaintiff from recovering for an injury that arose from a wrongdoing in which she participated....
View ArticleWhen A Corporation Dissolves, Does The Attorney-Client Privilege Live On?
Generally, a corporation’s suit for legal malpractice results in a waiver of the attorney-client privilege. When the corporation’s suit is brought derivatively, however, the privilege is not waived....
View ArticleProminent Amici Urge Reversal Of Court of Chancery Refusal To Grant...
In “Delaware Court of Chancery ‘Overrules’ Federal Court“, I wrote about Vice Chancellor J. Travis Laster’s ruling Louisiana Municipal Police Employees’ Retirement System v. Pyott, C.A. No. 5795-VCL...
View ArticleCalifornia Court Of Appeal Affirms Dismissal Of Say-On-Pay Suit
Yesterday, a panel of the California Court of Appeal added to the growing list of opinions rejecting suits triggered by failed say-on-pay votes. Some may be surprised that this case, which involves a...
View ArticleForum Selection Clauses Were Here Before They Were In Bylaws
Recent rulings by judges in Delaware and other states have given impetus to the adoption of exclusive forum bylaws. To the casual observer, the idea might seem entirely novel. But as Koheleth (the...
View ArticleThe Proper Purpose Of Discovery In Derivative Suits
A plaintiff holding less than 2000 shares files a derivative suit against a corporation’s current or former directors and officers. The trial court finds the complaint to be internally inconsistent...
View Article9th Circuit Upholds Issue Preclusion In Subsequent Derivative Suit
Derivative suits rarely arrive alone. When something goes awry, directors and officers can be expected to see multiple suits based on demand futility as well as wrongful demand refusal. Often, suits...
View ArticleHere’s One Way To Recover Attorneys’ Fees Without Adopting A Fee Shifting Bylaw
With the ongoing hullabaloo concerning the legislative demise of fee shifting bylaw provisions under Delaware law, little attention has been paid to California law. More importantly, no one seems to...
View ArticleThe Most Important Principles of Delaware Corporate Law Can’t Be Found In the...
I have often observed that you can read every section of the Delaware General Corporation Law and learn almost nothing about Delaware corporate law. Here are three of the most fundamental principles...
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The Investment Company Act And Roy M. Cohn
Last week, UFCW Local 1500 Pension Fund filed a class action and derivative lawsuit against Yahoo! Inc., its board of directors and some of its current and former officers. (N.D. Cal. Case No....
View ArticleCourt of Appeal Says Same Counsel Can’t Represent Corporation And Individual...
Derivative suits put the corporation in the odd position of simultaneously occupying the position of a defendant and plaintiff. When the suit is initiated, the corporation is named as a nominal...
View ArticleCourt Finds Plaintiffs Are Not Privies
Yesterday’s post noted that the plaintiff in a derivative suit is bringing claims on behalf of the corporation. Thus, when a derivative suit is dismissed, does that dismissal have any effect on other...
View Article10th Circuit Highlights Difference Between Delaware And Nevada Exculpatory...
Because the power to manage a corporation’s affairs rests with the board of directors, it is normally up to the board to decide whether the corporation will pursue a claim. A shareholder who believes...
View ArticleCourt Addresses “Fair Value” Determination In Statutory Buyout Proceeding
When when a shareholder sues for involuntary dissolution, the corporation, or the holders of 50% or more of the voting power of the corporation, may avoid the dissolution by purchasing for cash the...
View ArticleHow Does One Know When A Corporation Is Antagonistic?
When a shareholder files a derivative suit in state court, the defendants often will try to have the case removed to the federal district court. Federal courts, however, are courts of limited...
View ArticleU.S. District Court Finds Personal Jurisdiction In Derivative Suit
I think it is beyond peradventure that a state enjoys personal jurisdiction over corporations incorporated within that state. What about the personal jurisdiction over the corporation’s directors and...
View ArticleWant To File A Derivative Suit? You May Soon Be Required To Read Statutes
I have been writing recently about SB 203, a bill that is now pending in the Nevada legislature. As introduced, the bill would, among other things, require the following: In an action involving or...
View ArticleHow To Confer A $6.9 Million Benefit For Less Than A Half Dollar
In March 2011, the three-member compensation committee of EchoStar Corporation awarded options to purchase 1.5 million shares of company stock to its Chairman, Charles W. Ergen. According to...
View ArticleCan Shareholders Sue CEOs For Corporate Social Activism?
In an August 17, 2017 opinion piece published in The Wall Street Journal, Jon L. Pritchett and Ed Tiryakian had the following message for shareholders: Our message to small shareholders of companies...
View ArticleShareholder Derivative Suit Or Derivative Action?
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...
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