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CALIFORNIA CORPORATE & SECURITIES LAW

Court Finds Plaintiffs Are Not Privies

Yesterday’s post noted that the plaintiff in a derivative suit is bringing claims on behalf of the corporation.  Thus, when a derivative suit is dismissed, does that dismissal have any effect on other pending or subsequently filed derivative suits?  This is a topic that I first discussed a few years back in Delaware Court of Chancery “Overrules” Federal Court.  That post was critical of…

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Is Section 141(d) Truly Oxymoronic?

Section 141(d) of the Delaware General Corporation Law provides that the directors of any corporation may “be divided into 1, 2, or 3 classes”.  It’s hard to make sense of this statement.  First, I don’t believe that Delaware legislature meant to provide that individual directors may be cut up into pieces.  A more accurate statement…

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Private Email Woes Infect The Private Sector

Vice Chancellor J. Travis Laster’s ruling in Amalgamated Bank v. Yahoo!, Inc., C.A. No. 10774-VCL (Del. Ch. Feb. 2, 2016) should sound a tocsin to directors that their “private” emails may not be so private.  The ruling addressed Amalgamated Bank’s demand to inspect the books and records of Yahoo! pursuant to Section 220 of the Delaware General…

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Who Is Adolf Berle, Jr. And Why Is Vice Chancellor Laster Quoting Him?

Adolf A. Berle, Jr. wrote Corporate Powers as Powers in Trust more than four score years ago, but Vice Chancellor J. Travis Laster cited the article yesterday as if the Harvard Law Review had published it last week. Quadrant Structured Products Co., Ltd. v. Vertin (C.A. No. 6990-VCL) (Oct. 28, 2014).  Here’s the quotation from Berle: in every case, corporate…

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When It Comes To Proxy Statements, The U.S. District Courts May Not Be So Exclusive After All

A recent ruling by Vice Chancellor Donald F. Parsons, Jr. caused me to ponder why a case involving alleged misstatements in a proxy statement filed with the Securities and Exchange Commission wasn’t immediately tossed out on jurisdictional grounds. Pfeiffer v. Leedle, 2013 Del. Ch. LEXIS 272 (Del. Ch. Nov. 8, 2013) is a derivative suit alleging that…

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Must Designated Directors Keep A Secret?

Yesterday’s post concerned the attorney-client privileged issues in Vice Chancellor J. Travis Laster’s recent decision in Kalisman v. Friedman, 2013 Del. Ch. LEXIS 100 (April 17, 2013).  I found another statement in the decision even more intriguing – When a director serves as the designee of a stockholder on the board, and when it is understood…

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California Comments On Crescent City Corporate Conference

Last week, I attended the 23rd Annual Corporate Law Institute sponsored by Tulane University Law School. Here are some notes. Who Came The Institute drew a crowd of nearly 400 people, including about two dozen reporters.  Reportedly, Bloomberg, Reuters, The Wall Street Journal and others had representatives attending the Institute. Who Spoke The panels were…

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Will Delaware Exclusive Forum Bylaws Founder on the CGCL’s Rocks?

Many practitioners took note last spring when Vice Chancellor Laster wrote “if boards of directors and stockholders believe that a particular forum would provide an efficient and value-promoting locus for dispute resolution, then corporations are free to respond with charter provisions selecting an exclusive forum for intra-entity disputes.”  In Re Revlon, Inc. S’holders Litig.  Since then,…

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