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Court Finds Derivative Claims Involving Nevada Corporation Were Not "Validly In Litigation"

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...

Nevada Corporations, derivative action, derivative suit

Nevada Supreme Court Finds California Precedent "Persuasive" In Appeal Of Derivative Action

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.

Nevada Corporations, derivative action, derivative suit

If You Plan To Claim Demand Futility, You Had Best Not Make A Demand

Rule 23.1 of the Nevada Rules of Civil Procedure specifies the pleading and standing requirements for shareholder derivative actions.  Among other things, Rule 23.1 requires that a complaint "allege with particularity the efforts, if any, made by...

derivative action, derivative suit

Can a breach of fiduciary duty suit be brought directly?

In a recent posting, Professor Stephen Bainbridge breaks down the question of whether breach of fiduciary duty claims by a shareholder may be brought as direct, rather than, derivative claims.  The focus of his discussion is on breach of fiduciary...

derivative action, derivative suit

Nevada Supreme Court Accords Preclusive Effect To Subsequent Federal Court Order

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 filed derivative suits...

derivative suit

Delaware Special Litigation Committee Review "Could Stand A Good Tweaking"

UCLA Law School Professor Stephen Bainbridge recently critiqued the Nevada Supreme Court's decision to follow Auerbach v. Bennett, 419 N.Y.S.2d 920 (1979) rather than Delaware's Zapata Corp. v. Maldonado, 430 A.2d 779 (Del. 1981).  He concludes:

Nevada Corporations, Derivative Suits, Auerbach v. Bennett, Delaware, derivative action, derivative suit, SLC, Stephen Bainbridge, Zapata

Nevada Favors New York Over Delaware Precedent For SLC Review

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 incorporation of the corporation.  ...

Nevada Corporations, New York, Auerbach, business judgment rule, Delaware, derivative suit, In re Dish, SLC, Special Litigation Committee, Zapata

Shareholder 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 generally regarded shareholder derivative claims as...

Grosset v. Wenaas, nelson v. Anderson, Corporate Governance, Corporations Code, derivative action, derivative lawsuit, derivative suit, Section 2900, Section 800, Small v. Fritz

Can 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:

choice of law, Shlensky v. Wrigley, Corporate Governance, Choice of Law/Conflict of Law, derivative suit, lyman P.Q. Johnson, social activism, Stephen Bainbridge

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