Looking For Stiffer Loan Terms?  Nevada May Be Able To Help

Nevada's corporation law is quite protective of directors and officers.  Following the Delaware Supreme Court's decision in Smith v. Van Gorkum, 488 A.2d 858 (1985), the Nevada legislature amended the law to allow for exculpation of directors and...

Can An Article Or Bylaw Forum Selection Provision Bind Persons Who Are Not Yet Stockholders?

Today, the Nevada Assembly Judiciary Committee is holding a hearing on SB No. 95, a bill that would make numerous changes to Nevada's business entity statutes.  One change would be to amend NRS 78.046 to authorize the articles of incorporation or...

Nevada's Director Liability Standard Defeats Another Derivative Suit

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...

Lack Of Knowledge Defeats Breach Of Fiduciary Duty Claim

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...

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 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.

Internal Affairs Doctrine Blocks Indemnity Claim

Section 78.7502 of Nevada Revised Statutes broadly authorizes, but does not require, a corporation to indemnify its directors, officers, employees or agents.  NRS 78.751 requires the corporation to indemnify directors, officers, employees or agents...

Study Finds That Nevada Has "Vastly Outperformed" Delaware In Attracting These Corporations

In a recent study, William J. Moon at the University of Maryland School of Law tackles the question of "Delaware's surprising weakness competing in the emerging international market for corporate law".  He finds that less than 5% of Chinese...

Do Judges Need To Put Wax In Their Ears To Avoid Delaware's Siren Song?

"But I with my sharp sword cut into small bits a great round cake of wax, and kneaded it with my strong hands, and soon the wax grew warm, forced by the strong pressure and the rays of the lord Helios Hyperion.  Then I anointed with this the ears of...

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