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CALIFORNIA CORPORATE & SECURITIES LAW

Review Of Special Litigation Committee Recommendations

Yesterday’s post limned the Nevada Supreme Court’s adoption of New York’s Auerbach standard of review for special litigation committee recommendations.  In re Dish Network Derivative Litigation, 133 Nev. Adv. Op. 61 (2017).  The Supreme Court unequivocally required that the trial court apply Auerbach at an evidentiary hearing : Pursuant to Auerbach, 393 N.E.2d at 996, and consistent with…

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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 equitable.   Nelson v. Anderson, 72 Cal. App. 4th 111, 127, 84 Cal. Rptr. 2d 753, 763 (1999).  Thus, one might…

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California Appellate Court Decides California Law Applies “For Now” to Shareholder Derivative Suit Against Directors of a Nevada Corporation

Kruss v. Booth is a “must read” for lawyers confronting Section 2115 of the California Corporations Code. Section 2115 represents the California legislature’s attempt to thumb its nose at the internal affairs doctrine. That doctrine holds that the internal affairs of a corporation should be governed by the law of the state of incorporation. Section…

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