California Corporate & Securities Law

In this post, UCLA Law School Professor Stephen Bainbridge quibbles my description of Delaware's two-step approach to the special litigation committee defense in derivative suits. In particular, he points out that Delaware not only adds a second...

Last year, the City of Pontiac General Employees' Retirement System filed a derivative suit against the Board of Directors and Chief Executive Officer of Cisco Systems, Inc. The gist of the complaint was that the "Defendants publicly misrepresented...

I expect that most plaintiffs in derivative actions do not expect to pay a defendant's attorneys' fees if they lose because under the "American Rule" each side pays their own attorneys' fees, regardless of who wins. A contract may, of course,...

When allegations of corporate misfeasance surface at public companies, derivative actions are sure to follow. Often, actions will be filed in both state and federal court. This is what happened when "sexual misconduct" claims were made made public...

I first wrote about the preclusive effect, if any, of a dismissal of a parallel derivative action some nine years ago when I wrote about Vice Chancellor J. Travis Laster's ruling in La. Mun. Police Emples. Ret. Sys. v. Pyott, 46 A.3d 313, (2012).  See

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 particularity "plaintiff’s...

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 a view to the interests...

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 several executives and...

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 demand would be futile. NRCP...