California Corporate & Securities Law

When a shareholder sues derivatively, the shareholder is seeking relief not for itself, but for the corporation. Therefore, it should be expected that the shareholder is not free to compromise or dismiss the suit absent court oversight. This point...

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, what those fiduciary...

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 campaign against his former...

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 interest in "Side A"...

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". 

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 and Federal Rule of Civil...

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.  See Still No California Caremark? and ...

In a posting on the Business Law Prof Blog, Professor Stefan J. Padfield recently highlighted a complaint filed by America First Legal Foundation with the U.S. Equal Employment Opportunity Commission. The complaint alleges that McDonald's...