Corporations

Damages for breach of fiduciary duty; value of the loss of control; partnership odd lot tender offer.

Defensive devices to merger must be reasonably related to perceived threat.

Federal securities laws; investment scheme; fixed rate of return investment contract.

Sale of securities falls under 10(b) of the Securites and Exchange Act of 1934; section 10(b) forbids the use of any manipulative or deceptive device or contrivance relating to the sale of a security that is misleading or operates as a fraud or deceit.

State restrictions on incorporation. Incorporation laws.

State law may impose restrictions affecting one company's ability to acquire control of another without running afoul of federal law or the Commerce Clause; target corporation; tender offer; Williams Act.

Director charitable contributions; best interests of the corporation; the business judgment rule.

Directors valuation decisions; deference capital surplus; donated surplus; unearned surplus.

Substance of a transaction; securities laws apply; pyramid scheme.

Equitable owner; pierce the corporate veil.

Bind the corporation agency relationship actual authority agent apparent authority inherent authority principal specific performance.

Shareholders initiate amendments articles bylaws elect directors remove for cause.

Shareholders right to vote corporate democracy elect.

Proxy regulations newspapers direct and indirect communications proxies.

Proxy omission not material substantial likelihood reasonable shareholder.

Materially misleading proxy statement lost state law rights minority shareholder right to a state appraisal.

Directors duty to act honestly and in good faith and with the same degree of diligence, care, and skill that a reasonably prudent person would use in similar circumstances. Trustee in bankruptcy.

Directors fiduciaries fiduciary relationship common benefit fiduciary duty.

Stock options waste analysis shareholder ratifications constituted waste constructive fraud.

Premium a transfer of a corporate asset.

Conclusory statements futility demand on the board first demand redress business judgment rule.

Corporate officers directors fiduciary duty corporation individual shareholders.

Nondisclosure fraud duty to speak.

Material information reasonable investor substantial likelihood reasonable shareholder.

Minority shareholder fiduciary duty majority shareholders close corporation dividend.

Close corporation elected articles of incorporation.

Partnership business indemnify the partnership ordinary course of partnership business.

Directors lack of independence.

Contractual dissolution mechanism adequate separation of interests limited liability company liquidation.

Cumulative voting; straight voting; home state corporation.

Backdate stock option; fraudulent disclosures.

LLC may be judicially dissolved when defunct; namely, when it is no longer reasonably practicable for an LLC to continue to operate in conformity with the LLC agreement.

Beneficial owner; rights offering; stockholders have records inspection rights after corporation merger; neither record holders nor beneficial holders need have an actual economic interest in stock to have inspection rights.

IPO; initial public offering; when the board of directors cannot be expected, due to self interest, to determine whether to initiate legal proceedings against the corporation, it would be futile for the shareholders to make a demand before filing suit.

Business judgment rule; good faith; directors owe corporation and shareholders duty of good faith; business judgment rule does not save directors from liability for the conscious disregard of the consequences of corporate action.

Controlling shareholder; control of sale; presumtion that, in making a business decision, corporate directors act on an informed basis, in good faith, and in the honest belief that the action taken is in the company's best interests.

The substantive fairness of a class action settlement and attorney's fees depends on: (1) the complexity, expense, and duration of the litigation; (2) the reaction of the class to the settlement; (3) the stage of the proceedings and the extent of discovery; (4) the risks of establishing liability; (5) the risks of establishing damages;

The business judgment rule is applicable in the context of a takeover, so hostile takeover bids via tender offer may exclude hostile bidders.

Delaware General Corporation Law 144 provides a safe harbor for interested transactions if the material facts as to the director\'s relationship or interests as to the contract or transaction are disclosed or are known and majority of disinterested directors approves.

Marie L. Kasten v. Doral Dental USA, LLC, statutory rights to inspect company records are broad, subject to narrowing language contained in the company's operating agreement.

In Re Oracle Corp. Derivative Litigation, A director's independence turns on whether the director is, for any substantial reason, incapable of making a decision with only the best interests of the corporation in mind. Derivative action.

Louis K. Liggett Co. v. Lee; (From Dissent.) Corporate proliferation comes with both economic advantage and social risk; personal liabillity; piercing the corporate veil.

CA, Inc. v. AFSCME Employees Pension Plan; Bylaws may be unilaterally adopted by shareholders when they appropriately relate to corporate processes rather than substantive decisions or Board's fiduciary duties.

Gantler v. Stephens; Shareholder ratification applies only to circumstances where fully informed shareholder vote approves director action that does not legally require shareholder approval in order to become legally effective.

McPadden v. Sidhu; Gross negligence is conduct that constitutes reckless indifference, or actions that are without the bounds of reason, and constitutes a breach of the duty of care; bad faith; exculpatory clause.

In Re Tyson Foods, Inc. Consolidated Shareholder Litig; Directors owe shareholders total and complete loyalty, good faith, independence, and candor; motion for judgment on the pleadings.

Dweck v. Nasser; Implied authority is agent reasonably believes he has, shown by evidence of acquiescence of the principal; actual authority; apparent agency; apparent agent; apparent authority; express agency; implied agency.

Jones v. Harris Associates L.P.; Under section 36(b) of the Investment Company Act, a financial adviser has a fiduciary duty and owes an obligation of candor in negotiation, as well as honesty in performance, but not for negotiating own salary.

Kessler v. Antinora; The general rule of partnership law is that, in the absence of an agreement, the law presumes that partners and joint adventurers intended to participate equally in the profits and losses of the common enterprise.

Meehan v. Shaughnessy; Partners owe each other a fiduciary duty of the utmost good faith and loyalty and must refrain from acting for purely private gain; self-dealing.

Securities and Exchange Commission v. Cuban; Insider trading liability under the misappropriation theory is premised on the undisclosed use of confidential information for personal benefit, in breach of a duty not to do so.

Kus v. Irving; Where members of a limited liability partnership share no benefit with a partner accused of misconduct, have no direct supervision or control, and have no knowledge of the partner's misconduct, they are statutorily protected.

Kasten v. Doral Dental USA, LLC; Under Wisconsin\'s Limited Liability Company Act, statutory rights to inspect company records broad and subject to language contained in company's operating agreement.

Kaycee Land and Livestock v. Flahive; common law doctrine of piercing the corporate veil is not abrogated by the Limited Liability Company Act and may be used against limited liability company members in appropriate cases.

Anderson v. Wilder; A majority shareholder of an LLC stands in a fiduciary relationship to the minority; expulsion.

Bauer v. Blomfield Co.; An assignment of a partner's right, title, and interest in a partnership does not make the assignee a partner.

Friese v. Superior Court; Laws that regulate securities trading do not relate to the internal affairs of a corporation, so lawsuits relating to the sales of securities are not governed solely by the state of incorporation.

In the Matter of 1545 Ocean Avenue, LLC; A petitioner who seeks dissolution of an LLC must establish, in the operating agreement or articles of incorporation, that management is unable or unwilling to permit or promote the stated purpose.

Sutherland v. Sutherland; A provision in a corporate charter that purports to exonerate directors from breach of loyalty claims is unenforceable.

In re Trados Inc. Shareholder Litigation; When the interests of common stockholders diverge from preferred stockholders, the directors of a corporation have a duty to exercise their discretion in favor of the interests of common stockholders.

Affiliate Ute Citizens v. United States; When liability under Rule 10b-5 is predicated on a defendant's failure to disclose a material fact, positive proof of reliance is not a prerequisite to recovery.

Air Products & Chemicals, Inc. v. Airgas, Inc.; Defensive measures against takeovers are not impermissibly preclusive if they delay a bidder from obtaining control of a board as long as obtaining control in the future is realistically attainable.

Bell Atlantic v. Bolger; A derivative action that alleges only a breach of the duty of care, and not a breach of the duty of loyalty, does not require separate legal representation of the corporate plaintiff and the management defendants.

Baron v. Allied Artists Picture Corporation; When and in what amounts dividends will be declared rests in the honest discretion of the directors, assuming the absence of fraud or a gross abuse of discretion.

Delaware corporate law authorizes the indemnification of an officer's legal expenses when the officer has been successful in the underlying proceeding, as well as the advancement of expenses in pending proceedings.

In re El Paso Corp. Shareholder Litigation; to obtain a preliminary injunction, must demonstrate (1) a reasonable probability of success on the merits, (2) will suffer irreparable harm, and (3) the balance of the equities

Nixon v. Blackwell; absent specific contractual provisions, a minority shareholder is not entitled to relief from majority approved corporate actions in a closely held corporation. Elect close corporation status.