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CALIFORNIA CORPORATE & SECURITIES LAW

How To Win Custody Of A Corporation

In family law, the fights are often over who gets custody of the kids, the pets and the house.  Shareholders battle over many things, but you don’t often hear of custody fights in the corporate context.  Is it even possible to win custody of a corporation?  In Nevada, the answer is yes. NRS 78.347 allows any stockholder to apply to…

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How To Confer A $6.9 Million Benefit For Less Than A Half Dollar

In March 2011, the three-member compensation committee of EchoStar Corporation awarded options to purchase 1.5 million shares of company stock to its Chairman, Charles W. Ergen.  According to EchoStar’s proxy statement for its 2012 annual meeting, the aggregate grant date fair value of the award was $21.6 million.  There was just one problem, the plan…

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Alter Ego and the Nevada LLC

California’s version of the Revised Uniform Limited Liability Company Act expressly subjects members to potential alter ego liability:  A member of a limited liability company shall be subject to liability under the common law governing alter ego liability, and shall also be personally liable under a judgment of a court or for any debt, obligation,…

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How Does One Know When A Corporation Is Antagonistic?

When a shareholder files a derivative suit in state court, the defendants often will try to have the case removed to the federal district court. Federal courts, however, are courts of limited jurisdiction and not every plaintiff can make a “federal case” out of their complaint.  When federal court jurisdiction is based on diversity (28 U.S.C.…

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Corporation Owes No Duty To Warn Former Director Of Impending Option Expiration

Does a corporation commit constructive fraud if it fails to warn a former director of the impending expiration of a stock option?  That was one question decided earlier this month by Judge Jennifer A. Dorsey in  Nelson v. FluoroPharma Med., Inc., 2016 U.S. Dist. LEXIS 1270 (D. Nev. Jan. 4, 2016).  In granting summary judgment for the…

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