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Glassman v. Unocal Exploration Corporation
Minority shareholders appraisal; fair value; shares; statutory short form merger; controlling fiduciaries; parent corporation; duty of entire fairness; corporate subsidiary.
Gotham Partners, L.P. v. Hallwood Realty Partners, L.P.
Damages for breach of fiduciary duty; value of the loss of control; partnership odd lot tender offer.
Kahn v. Lynch Communications Systems, Inc.
Burden of proving fairness; merger; majority or controlling shareholders; fiduciary duty; arms length.
Northmon Investment Company v. Milford Plaza Association
Ordinary partnership business; unauthorized transactions; equal rights.
Omnicare, Inc. v. NCS Healthcare, Inc.
Defensive devices to merger must be reasonably related to perceived threat.
RNR Investments L.P. v. Peoples First Community Bank
General partner; ordinary course of partnership business; actual authority; apparent authority.
Saito v. McKesson HBOC, Inc.
Right to inspect corporate books and records must be reasonably related to the derivative action.
Securities and Exchange Commission v. Edwards
Federal securities laws; investment scheme; fixed rate of return investment contract.
Solar Cells, Inc. v. True North Partners, LLC
Directors fiduciary duty; enitre fairness; likelihood of success on the merits and irreparable harm; adequate remedy at law.
Securities and Exchange Commission v. Zanford
Common law fraud; federal securities laws 10(b); rule 10b5; Securities Act of 1933.
The Wharf (Holdings) Limited v. United International Holdings, Inc.
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.
Tooley v. Donaldson, Lufkin and Jenrette, Inc.
Ordinary partnership business; unauthorized transactions; equal rights; management conduct.
Schnell v. Chris Craft Industries, Inc.
Inequitable action; amendment of by laws board of directors.
Liggett Company v. Lee
State restrictions on incorporation. Incorporation laws.
First National Bank of Boston v. Bellotti
Corporate political speech is protected by the First Amendment.
Austin v. Michigan Chamber of Commerce
Prevention of corruption in the political process is a compelling state interest; political speech restrictions on corporations must be narrowly tailored.
CTS Corporation v. Dynamics Corporation of America
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.
Amanda Acquisition Corporation v. Universal Foods Corporation
States regulate mergers; the commerce clause; Shell Corporation.
Dodge v. Ford Motor Company
Motives; board of directors; shareholders' dividend.
Kahn v. Sullivan
Director charitable contributions; best interests of the corporation; the business judgment rule.
Jesse by Reinecke v. Danforth
Incorporating; create a personal attorney client relationship; entity rule; conflict of interest.
Equity Linked Investors, L.P. v. Adams
Board of directors owes duty of good faith stockholders.
Klang v. Smith Food and Drug Centers, Inc.
Directors valuation decisions; deference capital surplus; donated surplus; unearned surplus.
Dodge v. Ford Motor Company
Directors declare dividends bad faith, willful neglect, abuse of discretion. close corporation.
Kamin v. American Express Company
Actionable course of action; action for damages; board of directors.
Securities and Exchange Commission v. SG Ltd.
Substance of a transaction; securities laws apply; pyramid scheme.
Walkovszky v. Carlton
Corporate form fraud; alter ego rule; piercing the corporate veil.
Radaszewski v. Telecom Corporation
Insurance coverage; piercing of the corporate veil; improper purpose; parent Shell Subsidiary Corporation.
Freeman v. Complex Computing Company Inc.
Equitable owner; pierce the corporate veil.
Kinney Shoe Corporation v. Polan
Shield shareholders personal liability corporate formalities undercapitalization.
OTR Associates v. IBC Servicies, Inc.
Parent corporation shell corporation pierce the corporate veil separate existence conduit.
Menard, Inc. v. Dage MTI, Inc.
Bind the corporation agency relationship actual authority agent apparent authority inherent authority principal specific performance.
Hariton v. Arco Electronics, Inc.
Sale of all corporate assets de facto merger.
Gimbel v. Signal Companies, Inc.
Shareholder approval sale quantitatively qualitatively corporate assets.
Auer v. Dressel
Shareholders initiate amendments articles bylaws elect directors remove for cause.
International Brotherhood of Teamsters General Fund v. Fleming Companies
Certificate of incorporation authority shareholder rights plans certified question.
Campbell v. Loew, Inc.
Harrassment deliberate obstruction director removal for cause proxy.
Blasius Industries, Inc. v. Atlas Corporation
Shareholders right to vote corporate democracy elect.
Quickturn Design Systems, Inc. v. Shapiro
Directors manage corporate affairs best interests of the shareholders business judgment ficuciary duty.
State ex rel. Pillsbury v. Honeywell, Inc.
Stockholder purchased stock corporate records access compel production of corporate books and records shareholder lists business records.
Long Island Lighting Company v. Barbash
Proxy regulations newspapers direct and indirect communications proxies.
Lovenheim v. Iroquois Brands, Ltd.
Noneconomic interests shareholder proposal omit proxy materials.
J.I. Case Company v. Borak
Proxy materials false and misleading statements private right of action fiduciary duty rescission.
TSC Industries, Inc. v. Northway, Inc.
Proxy omission not material substantial likelihood reasonable shareholder.
Mills v. Electric Auto Lite Company
Materiality causality misstatement omission.
Virginia Bankshares, Inc. v. Sandberg
Directors opinions proxy statement rule 14a 9 and 14(a) knowingly false causation.
Wilson v. Great American Industries, Inc.
Materially misleading proxy statement lost state law rights minority shareholder right to a state appraisal.
Santa Fe Industries, Inc. v. Green
Parent merge subsidiary, delaware short form merger statute ninety percent rule 10b 5.
Malone v. Brincat
Directors owe a duty of loyalty and good faith disclosures knowingly disseminate false information fiduciary derivative action.
Francis v. United Jersey Bank
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.
In re Caremark International Inc. Derivative Litigation
Failure of oversight liability individual directors the breach of the duty of attention or care compliance audit.
Waltuch v. Conticommodity Services, Inc.
Articles of incorporation indemnification employee act in good faith indemnity.
Remillard Brick Company v. Remillard Dandini Company
Directors fiduciaries fiduciary relationship common benefit fiduciary duty.
Orman v. Cullman
Presumption of loyalty lacked independence. business judgment rule duty of loyalty.
Lewis v. Vogelstein
Shareholder ratification ratify a transaction directors material conflict of interest corporate waste. Agency agent principal quorum ratification.
Lewis v. Vogelstein
Stock options waste analysis shareholder ratifications constituted waste constructive fraud.
Weinberger v. UOP, Inc.
Shareholder approval merger void inadequate information disclosed minority shareholders cash out merger damages fair value tender offer.
Kahn v. Lynch Communications Systems, Inc.
Majority controlling shareholders fairness merger fiduciary duty.
Perlman v. Feldmann
Premium a transfer of a corporate asset.
Jones v. H.F.Ahmanson and Company
Majority shareholders transfer control of a corporation premium fiduciary responsibility appraisal dividend.
Essex Universal Corporation v. Yates
Contract to sell a controlling interest control board of directors. collateral agreement doctrine.
Aronson v. Lewis
Conclusory statements futility demand on the board first demand redress business judgment rule.
Zapata Corporation v. Maldonado
Disinterested committee investigate litigation derivative claim.
Einhorn v. Culea
Director independence special litigation committee independent directors.
Goodwin v. Agassiz
Corporate officers directors fiduciary duty corporation individual shareholders.
Diamond v. Oreamuno
Directors and officers inside information own benefit derivative action insider trading.
Securities and Exchange Commission v. Texas Gulf Sulphur Company
Insider trading; trading material inside information; disclose; abstain; disgorgement; Securities Exchange Act of 1934; SEC.
Chiarella v. United States
Nondisclosure fraud duty to speak.
Dirks v. Securities and Exchange Commission
Insider trading aid and abet scienter quid pro quo.
United States v. OHagan
Misappropriation confidential information fraud ethical wall misappropriation theory.
Basic Inc. v. Levinson
Material information reasonable investor substantial likelihood reasonable shareholder.
Basic Inc. v. Levinson
Presumption of reliance on misleading material statements market fraud on the market principle rebuttable presumption.
MM Companies, Inc. v. Liquid Audio, Inc.
Compelling justification defensive measure board actions.
Smith v. Atlantic Properties, Inc.
Minority shareholder fiduciary duty majority shareholders close corporation dividend.
Concord Auto Auction, Inc. v. Rustin
Shareholder agreements close corporation specific performance.
Wilkes v. Springside Nursing Home, Inc.
Close corporation legitimate business purpose freeze out minority shareholder terminating employment valid breach fiduciary duties.
Nixon v. Blackwell
Close corporation elected articles of incorporation.
Matter of Kemp and Beatley, Inc.
Minority shareholders seek dissolution de facto dissolution oppression.
Miller v. McDonald's Corp.
Franchisees negligence franchisor liable retains a right of control actual agency apparent agent franchise.
Moren ex rel. Moren v. Jax Restaurant
Partnership business indemnify the partnership ordinary course of partnership business.
Disotell v. Stiltner
Buyout fair market value wind up partnership dissolution economic waste liquidation winding up.
Roman Catholic Archbishop of San Francisco v. Sheffield
Subsidiaries parent alter egos rule corporate veil parent corporation piercing the corporate veil subsidiary corporation.
In Re Oracle Corp. Derivative Litigation
Directors lack of independence.
In Re eBay, Inc. Shareholders Litigation
Fiduciary duty of loyalty aiding and abetting usurp corporate opportunity doctrine self-dealing.
Robinson v. Glynn
Ordinary business transactions common characteristics of stock corporation limited liability company security.
Haley v. Talcott
Contractual dissolution mechanism adequate separation of interests limited liability company liquidation.
Manhattan Eye, Ear and Throat Hospital v. Spitzer
In order to obtain judicial approval of a sale of all or substantially all of non-profit corporation assets, the board must show that consideration and terms of transaction are fair and that purposes of corporation will be promoted.
Bove v. Community Hotel Corp. of Newport, R.I
Validity of a corporate act.
Ross A. Wilson v. Louisiana Pacific Resources, Inc.
Cumulative voting; straight voting; home state corporation.
McDermott Inc. v. Lewis
Full faith and credit clause; internal affairs doctrine.
VantagePoint Venture Partners 1996 v. Examen, Inc.
Internal affairs doctrine; choice of law principle.
Ryan v. Gifford
Backdate stock option; fraudulent disclosures.
Theberge v. Darbro, Inc.
Alter ego, pierce the corporate veil.
Summit Properties, Inc. v. New Technology Electrical Contractors, Inc.
Agent authority; apparent authority; acquiesence unless principal notice.
Haley v. Talcott
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.
Marathon Partners L.P. and Furtherfield Partners L.P. v. M&F Worldwide Corporation
Stockholders may inspect corporate books and records; a proper purpose for seeking access to corporate records is one reasonably related to the requesting person's interest as a shareholder.
Polygon Global Opportunities Master Fund v. West Corporation
Greenmail; interloper; standing; shareholder must have a proper purpose reasonably related to his interest as a stockholder and must further prove some credible evidence of wrongdoing sufficient to warrant continued investigation.
Deephaven Risk Arb Trading Ltd. v. UnitedGlobalCom, Inc.
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.
American Federation of State, County & Municipal Employees, Employees Pension Plan v. American International Group, Inc.
Proxy statement; SEC requires inclusion of stockholder proposals in proxy statements; shareholder proposals to amend corporate bylaws; Rule 14a-8.
Virginia Bankshares, Inc. v. Sandberg
Freeze-out merger; minority shareholders with non-essential votes cannot challenge a merger.
In re eBay, Inc. Shareholders Litigation
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.
Stone v. Ritter
Without red flags, directors have no reason to suspect wrongdoing; does stockholder complaint create a reasonable doubt that board of directors could have properly exercised its independent and disinterested business judgment in responding.
ATR-Kim Eng Financial Corp. v. Araneta
Aid and abet; all directors are potentially liable for the misconduct of one; corporate director duty to monitor the potential that others within the organization will violate their duties.
In re The Walt Disney Co. Derivative Litigation (Disney II)
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.
In re The Walt Disney Co. Derivative Litigation (Disney III)
Bad decisions do not equal bad faith; standards used to measure the conduct of fiduciaries under Delaware law are not the same standards used in determining good corporate governance.
In re Emerging Communications, Inc. Shareholders Litigation
Safe harbor; the applicable standard of care varies by expertise; in a breach of fiduciary case, financial and industry experts will be held to a higher standard of care than other board members.
In re CompuCom Systems, Inc. Stockholders Litigation
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.
Tooley v. Donaldson, Lufkin & Jenrette, Inc.
Direct action; special injury test disapproved for determining whether a direct action exists; standing to assert direct action depends on whether the individual, not the corporation, suffered harm and would benefit from the recovery or remedy.
In re Cavanaugh
The Reform Act provides a three-part process for identifying the lead plaintiff in a class action lawsuit: notice; greatest financial stake in the outcome of the controversy; Rule 23 requirements of typicality and adequacy. Writ of Mandamus.
In re WorldCom, Inc. Securities Litigation
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;
In the Matter of Cady, Roberts & Co.
The major purpose of the securities acts is the prevention of fraud, manipulation, and deception by any person in connection with securities transactions, so can have insider status via a tip.
Cheff v. Mathes
Under 8 Delaware Code 160, a corporation is statutorily granted the power to purchase and sell shares of its own stock, so greenmail in a merger may be allowed.
Unocal Corp. v. Mesa Petroleum Co.
The business judgment rule is applicable in the context of a takeover, so hostile takeover bids via tender offer may exclude hostile bidders.
Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc.
Poison pill; lock up agreement; Board may fight takeover but once the sale appears inevitable, it is the board's fiduciary duty to work to maximize the company's value.
Paramount Communications, Inc. v. Time Inc.
If a board is pursuing a merger for strategic reasons, it may decline to entertain a competing bid that may yield a higher short-term gain for its shareholders in favor of a merger that ensures greater long-range gains. No shop provision.
Benihana of Tokyo, Inc. v. Benihana, Inc.
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.
Business Judgment Rule
Blackmore Partners, L.P. v. Link Energy LLC, business judgment rule, exculpatory clause, fiduciary duty.
Negligent Mispresentation
Abry Partners V, L.P. v. F & W Acquisition LLC, recission, fraud, contracts may not be rescinded based on misrepresentations made during negotiations unless one party to contract made misrepresentations, knowing them to be false.
Statutory Inspection Right
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.
Reverse Piercing the Corporate Veil
Cargill, Inc. v. Hedge, reverse pierce the corporate veil, alter ego of the company.
Derivative Suit on Directors
Stone v. Ritter, statutorily required pre-suit demand on directors.
Independent Directors of Corporation
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.
Duty of Care and Duty of Good Faith
Brehm v. Eisner, A director's action will not be labeled "bad faith" unless it involves an intentional dereliction of his duty or a conscious disregard for his responsibilities. Fiduciary.
Home State May Impose Its Laws
Wilson v. Louisiana-Pacific Resources, Inc; The Commerce Clause is not implicated by a statute that regulates corporations even-handedly and imposes no special or distinct burden on out-of-state interests; dormant commerce clause; straight voting.
Disadvantages of Big Corporations
Louis K. Liggett Co. v. Lee; (From Dissent.) Corporate proliferation comes with both economic advantage and social risk; personal liabillity; piercing the corporate veil.
Stockholder Right to Inspect Corporate Books and Records
Saito v. McKesson HBOC, Inc.; stockholder has right to make written demand to inspect corporate books and records for purpose reasonably related to person's interest as stockholder; derivative action; parent corporation; subsidiary corporation.
Low Burden of Proof to Inspect Corporate Books
Seinfeld v. Verizon Communications, Inc; Stockholders seeking inspection of corporate books and records must present some evidence suggest credible basis from which court can infer mismanagement, waste, or wrongdoing may have occurred.
Limits on Shareholder Adoption of Bylaws
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.
Material Misrepresentations in Proxy Materials
Gantler v. Stephens; misrepresentation material if substantial likelihood disclosure of omitted fact would have been viewed by reasonable investor as having significantly altered total mix of information made available; proxy.
Bad Faith Requires Particularized Facts
In Re Citigroup, Inc. Shareholder Derivative Litig; Plaintiff must show directors knew not discharging fiduciary obligations or directors demonstrated conscious disregard for responsibilities; business-judgment rule; exculpatory clause; gross negligence.
Shareholders Are Entitled to Full Disclosure
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.
Interest and Independence are Different
Orman v. Cullman; director is "interested" when he derives benefit from transaction that is not shared with other shareholders but lacks "independence" when his decision about transaction controlled directly or indirectly by another; disinterested.
Pre-Suit Demand By Shareholders
In Re Infousa, Inc. Shareholders Litig; Pre-suit demand excused only if shown that a majority of the members of board of directors is either personally interested, or is so dominated by or beholden to an interested director that discretion sterilized.
Gross Negligence Is Not Bad Faith
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.
Duty to Disclose Corporate Opportunities
Burg v. Horn; The question of whether director is required to offer business opportunity to corporation before taking advantage of it is determined according to relationship between particular director and corporation; accounting; constructive trust.
Intentional Acts Circumventing Shareholder Imposed Requirements
In Re Tyson Foods, Inc. Consolidated Shareholder Litig; A director who uses inside knowledge to enrich employees while avoiding shareholder-imposed requirements is not acting loyally and in good faith as a fiduciary; business-judgment rule.
Director Breach of Fiduciary Duty
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.
Director Duty to Get Best Price
Lyondell Chem. Co. v. Ryan; The duty to obtain the best possible price for the shareholders arises only when the company embarks on a transaction that will result in change of control.
Defensive Actions Invoke Reasonableness Standard
Mercier v. Inter-Tel (Delaware), Inc; directors' defensive actions; burden is on directors to identify legitimate corporate purpose, and show that actions reasonable relation to purpose did not preclude shareholders from exercising right to vote.
Implied Authority
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.
Interested Partners May Not Vote
Perretta v. Prometheus Development Company, Inc; A partnership agreement provision that allows an interested partner to count its votes is manifestly unreasonable under California corporations law; limited partner; limited partnership; ratification.
Business Judgment Rule For Directors
In re The Walt Disney Co. Derivative Litigation; the law presumes directors act on an informed basis, in good faith, and in the honest beliefof best interests of company; business judgment rule; derivative action; duty of good faith; fiduciary duty.
Investment Advisers Salary Not Covered By Fiduciary Duty
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.
Shareholder Proposal and Proxy Solicitation
AFSCME v. AIG, Inc; Proxy access bylaw shareholder proposals, which relate to election procedures in general rather than specific, upcoming elections, are non-excludable under SEC Rule 14a-8(i)(8).
Freeze-Out Remedy
Brodie v. Jordan; The proper remedy for a freeze-out is to restore the minority shareholder as nearly as possible to the position she would have been in had there been no wrongdoing; close corporation; dividend; injunction.
Burden of Loss For Contributions to Partnership
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.
Partner Cannot Pay Below Market Rate For Partnership Property
Enea v. Superior Court; In forming a partnership, the partners obligate themselves to share the risks and benefits and carry out the enterprise with the highest good faith toward each other; fiduciary.
Partnership Agreements Can Allow Otherwise Prohibited Conducts
Singer v. Singer; A partner's duty to the partnership is not violated by conduct that is specifically authorized by the partnership agreement; constructive trust.
Solicitations of Partnership's Clients
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.
Assignee Of Partnership Interest Not Automatically A Partner
Rapoport v. 55 Perry Co; Partnership law provides that, subject to any contrary agreement between the partners, no person may become a member of the partnership without the consent of the other partners.
In-Kind Distribution of Partnership Assets
Dreifuerst v. Dreifuerst; Unless otherwise agreed, partners who have not wrongfully dissolved the partnership have a right to wind up the partnership and force a sale of the partnership assets; partnership at will.
Actionable Misappropriation of Inside Information
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.
Controlling Limited Partner May be Liable
Gateway Potato Sales v. G.B. Investment Co; A limited partner who is not also a general partner is not liable for the obligations of the limited partnership unless he takes part in the control of the business.
Summary Judgment Allowed If No Competent Counter Evidence
KE Property Management Inc. v. 275 Madison Management Corp; A managing general partner of a limited partnership may be removed from the partnership by a limited partner if the managing partner's agent engages in fraudulent conduct.
Limited Liability Partners
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.
LLPs Do Not Shield Partners From Liability To Each Other
Ederer v. Gursky; New York's Partnership Law provision limiting the personal liability of partners in an LLP does not shield a general partner in a registered LLP from personal liability for breaches of the partnership's or partners' obligations to each other.
LLC Manager Has Authority To Bind
Taghipour v. Jerez; Under Utah law, documents that provide for the acquisition, mortgage, or disposition of property of the LLC are binding on the LLC if they are signed by a manager; limited liability company.
Statutory Inspection Rights May Be Altered By Agreement
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.
Not All Transfers Of Property Are Sales
Premier Van Schaack Realty, Inc. v. Sieg; Under Utah law, a sale of property is defined as the conveyance of title to the purchaser for a valuable consideration consisting of the purchase price, or contract of sale, whereby some estate in land passes.
LLC Cannot Be After The Fact Shield For Member Fraud
Pepsi-Cola Bottling Co. v. Handy; Delaware law protects members and managers of an LLC from liability for obligations of the LLC solely by reason of being or acting as LLC members or managers, but not for other reasons; piercing the corporate veil.
Court May Pierce The Corporate Veil Of An LLC
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.
Board Members May Not Withhold Notice of Meeting From A Director
VGS, Inc. v. Castiel; Mangers that fail to provide notice to all board members of their intent to hold a meeting or seek consent to a written resolution violate their fiduciary duties to each other.
LLC Agreement May Define Member Duties
Fisk Ventures, LLC v. Segal; Because LLCs are not creature of state but of contract, duties and obligations of the LLC members are as set forth in the LLC agreement; implied covenant of good faith and fair dealing; post hoc; sine qua non.
Question of Fact On Summary Judgment Not Allowed
Anderson v. Wilder; A majority shareholder of an LLC stands in a fiduciary relationship to the minority; expulsion.
LLC Agreement Controls Disassociation
Lieberman v. Wyoming.com LLC; The operating agreement of an LLC determines the rights and obligations of the members with regard to a member who has disassociated from the LLC.
Can Oust LLC Member and Continue LLC
Dunbar Group, LLC v. Tignor; Only when present circumstances show that it is not reasonably practicable to carry on company's business in accord with articles of organization and any operating agreement may court order dissolution of LLC.
Assignment of Partnership Rights
Bauer v. Blomfield Co.; An assignment of a partner's right, title, and interest in a partnership does not make the assignee a partner.
Dissolution of Partnership Requires Liquidation
McCormick v. Brevig; In dissolution because it is no longer reasonably practicable for a partnership to carry on its business, the partnership assets must be liquidated and the net surplus in cash must be distributed to the partners.
Wind Up Of A Partnership
Farnsworth v. Deaver; When a partnership is winding up, a partner with a negative balance in his or her capital account must repay that negative balance and return the account to zero.
Internal Affairs Doctrine
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.
Unfair Conduct In Corporate Election
Portnoy v. Cryo-Cell International, Inc.; Unfair and inequitable conduct during a corporate election is a breach of fiduciary duty that can taint the election and justify its outcome being overturned.
Derivative Suits On Behalf Of Limited Liability Companies
Tzolis v. Wolff; Derivative suits on behalf of limited liability companies are allowed, based on the importance of the derivative suit in corporate law, and no evidence the Legislature intended to abolish in the Limited Liability Company Law.
Dissolution Of A Limited Liability Company
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.
Exit Provisions Of A Limited Liability Company
Haley v. Talcott; Contractual provisions in an LLC agreement that provide a mechanism for a member to exit will be enforced only if they equitably effect the separation of the parties.
Business Judgment Rule  Requires Good Faith
Gantler v. Stephens; The business judgment rule will not apply if directors' actions are motivated by self-interest, rather than the good faith pursuit of a legitimate corporate interest.
No Exoneration For Disloyal Directors
Sutherland v. Sutherland; A provision in a corporate charter that purports to exonerate directors from breach of loyalty claims is unenforceable.
Incentive Stock Option Plan
In re Tyson Foods, Inc. (Tyson I); Directors may not ask for shareholder approval of an incentive stock option plan and then later to distribute shares in such a way as to undermine the objectives of that plan.
Shareholder Approved Stock Option Plan
Ryan v. Gifford; The intentional violation of a shareholder approved stock option plan, coupled with fraudulent disclosures, constitutes conduct that is disloyal to the corporation and is therefore an act in bad faith.
Directors Must Favor Common Stockholders
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.
Secondary Actors Liability For Securities Fraud
Pacific Investment Management Co. LLC v. Mayer Brown LLP; Attribution of false statements to a secondary actor is required in order to hold that actor liable for securities fraud under Rule 10b-5.
Securities Laws and False Statements
Pugh v. Tribune Co.; A participant in a fraudulent scheme is not liable under the securities laws unless he or she had a role in preparing or disseminating false statements.
Reliance On A Failure To Disclose
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.
Fraud Claims Must Allege Loss
Metzler Investment Gmbh v. Corinthian Colleges, Inc.; A complaint for securities fraud must allege loss causation, so that the defendant is provided notice of what the relevant economic loss might be or the causal connection.
Acquisition Tender Offer By Controlling Shareholder
In re Pure Resources, Inc. Shareholder Litigation; Acquisition tender offer by a controlling shareholder must be non-coercive: non-waivable majority of the minority tender condition; consummate a prompt short-form merger; no retributive threats.
Defensive Measures Against Corporate Takeovers
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.
Assignment of Public Debt
Sharon Steel Corp. v. The Chase Manhattan Bank; Boilerplate successor obligor clauses do not permit assignment of the public debt to another party in the course of a liquidation unless to a single purchaser.
Implied Covenants In A Bond Indenture
Metropolitan Life Insurance Company v. RJR Nabisco, Inc.; When there is no express covenant restricting the incurring of new debt, and no perceived direction to that end from the express covenants, the court will not imply a covenant.
Separate Counsel In Derivative Action
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.
Cost Recovered In A Derivative Action
West Hills Farms v. RCO AG Credit, Inc.; When the court requires a plaintiff in a derivative action to post a bond for the defendant's anticipated attorney's fees and costs, the defendant may not recover costs or fees greater than that bond.
Relationship Corporation and Bondholders Is Contractual
Katz v. Oak Industries, Inc.; The relationship between a corporation and its bondholders is contractual in nature, and the rights and obligations of the parties will be spelled out in the documentation of that relationship.
Dividends Are At Discretion of Board
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.
Fiduciary
Fiducial; fiduciary duty; corporate fiduciary; corporation fiduciary relationship; Remillard Brick Company v. Remillard Dandini Company
LLC Agreement
Achaian, Inc. v. Leemon Family LLC; parties to an LLC have substantial authority to shape their own affairs, and any conflicts between the LLC Act and their agreement will be resolved in favor of the agreement.
Aleynikov v. Goldman Sachs Group, Inc.
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.
Termination of Minority Shareholder
Gallagher v. Lambert; A minority shareholder in a close corporation who agrees to the repurchase of his shares upon termination of employment acquires no right against at-will discharge.
Disinterested Board Members
Gordon v. Goodyear; a shareholder derivative action must state with particularity any effort made by the plaintiff to obtain the desired action from the directors and the reasons for not obtaining the action or making the effort.
Preliminary Injunction Requirements
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
Dissolution By Minority Shareholders
In re Kemp and Beatley, Inc.; minority shareholders may dissolve a close corporation to redress oppressive actions arising from the award of de facto dividends to all but minority shareholders.
Employment At Will
Merola v. Exergen Corp.; employment at will permits termination without cause, even in a close corporation.
Minority Shareholder Rights
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.
Proper Purpose
Paul v. China MediaExpressHoldings, Inc.; shareholder may inspect the books and records of a corporation to investigate fraud and mismanagement, and the ability of the board to act independently and in good faith.
Dissociation From Partnership
Saint Alphonsus Diversified Care, Inc. v. MRI Associates, LLP; dissociation from a partnership is wrongful only if it is in breach of an express provision of the partnership agreement.
Dead Hand Provision
Carmody v. Toll Brothers, Inc.; A dead hand provision in a poison pill rights plan is both invalid as ultra vires and because it constitutes a breach of fiduciary duty.
Unsigned LLC Agreement
Elf Atochem North America, Inc. v. Jaffari; a limited liability company (LLC) is bound by the operating agreement signed by some members and that defines the LLC's governance and operation, even if the LLC itself did not sign.
Majority Of The Minority Vote
In re MFW Shareholders Litigation; business judgment rule standard of review applies to controlling stockholder merger if procedural safeguards followed; majority of the minority stockholder approval. Going private transaction.
Deceptive Device or Contrivance
S.E.C. v. Dorozhko; Computer hacking could be a deceptive device or contrivance prohibited by Section 10(b) and Rule 10b-5, regardless of whether it is accompanied by a breach of fiduciary duty.
Special Litigation Committee
Boland v. Boland Trane Associates, Inc.; Although an SLC's substantive decisions are presumed reasonable, there is no presumption that the SLC was independent, acted in good faith, or followed reasonable procedures.
Doctrine of Corporate Opportunity
Broz v. Cellular Information Systems, Inc.; corporate fiduciary generally must place the corporation's interests before his own, but here no valid expectancy interest and did not usurp any corporate opportunity.
Imputed Knowledge
Carter v. Gugliuzzi; the knowledge of an agent acting within the scope of his or her authority is chargeable to the principal, regardless of whether that knowledge is actually communicated. Scope of employment.
Limited Liability Company Operating Agreement
Elf Atochem North America, Inc. v. Jaffari; a limited liability company is bound by the operating agreement signed by some members and that defines the LLC's governance and operation, even if the LLC itself did not sign.
LLC Apparent Authority
Estate of Collins v. Geist; A manager of an LLC has the apparent authority to bind the LLC when he executes in its name an instrument for carrying on, in the usual way, its business or affairs. Limited Liability Company.
Follow Corporate Bylaws
Fogel v. U.S. Energy Systems, Inc.; mere congregation of a corporation's directors in same room does not necessarily result in a board meeting, and does not obviate the need for adherence to corporate bylaws and General Corporation Law.
Claim For Attorney's Fees
Freedman v. Adams; when the underlying shareholder claim is invalid, so is the shareholder's claim for attorneys' fees.
LLC Fiduciary Duties
Gatz Props., LLC v. Auriga Capital Corp.; Magic words like "entire fairness" or "fiduciary duties" are not required to impose fiduciary standards of conduct as a contractual matter.
Irrevocable Proxy
Haft v. Haft; Under Delaware corporation law, an interest sufficient to support an irrevocable proxy must either be an interest in the stock itself or an interest in the corporation generally, such as being CEO.
Usurp Corporate Investment Opportunity
In re eBay, Inc. Shareholders Litigation; The fiduciary duty of loyalty requires directors and officers to offer investment opportunities derived from corporate business to the corporation before acting on them individually. Self dealing.
Pleading Standards
In re Massey Energy Company Derivative and Class Action Litigation; application of plaintiff-friendly pleading standards usually precludes a dismissal of their claims at the pleading stage.
Majority Shareholder Fiduciary Duty
Jones v. H.F. Ahmanson & Co.; Majority shareholders have a fiduciary responsibility to the minority and to the corporation to control the corporation in a fair, just, and equitable manner. All shareholders must benefit proportionately.
Employee Stockholder Rights
Jordan v. Duff & Phelps, Inc.; If a closely held company withholds from an employee-stockholder material information about possible increases in stock value in breach of its fiduciary duty, the employee-stockholder may be entitled to damages.
Going Private Merger Standard of Review
Kahn v. M & F Worldwide Corp.; business judgment standard of review governs going private mergers with a controlling stockholder if independent special committee and informed vote of a majority of the minority stockholders.
Torts By Attorney
Koutsogiannis v. BB&T; clients can be held liable for its attorney's actions taken within the scope of representation, including possible torts
Business Entity Choice
Meyer v. Oklahoma Alcoholic Beverage Laws Enforcement Commission; the type of business entity chosen may affect the types of business that can be conducted by the entity if it affect the licenses the entity may obtain.
Distinct Legal Entity
3519-3513 Realty, LLC v. Law; a limited liability company and its sole member are distinct legal entities.
Managing Co-Member Fiduciary Duty
Salm v. Feldstein; a managing co-member of an LLC owes the other members a fiduciary duty to make full disclosure of all material facts. Self dealing. Usurp corporate opportunity.
Director Duty of Loyalty
Shocking Technologies, Inc. v. Kosowsky; a director acting in subjective good faith may nevertheless breach his duty of loyalty.
Attorney Apparent Authority
Speed v. Muhanna; an attorney of record has apparent authority to enter into an agreement on behalf of his client, and the agreement is enforceable against the client by other parties.
Director Liability for Employee Misconduct
Stone v. Ritter; In the absence of red flags alerting corporate directors to misconduct, good faith is measured by the directors' actions to assure that a reasonable reporting and information system exists.
Common Fund Fee Award
Sugarland Ind., Inc. v. Thomas; when services provided by shareholders and their counsel result in a financial benefit to the corporation, they are entitled to a fair fee. Common fund method. Lodestart method.
Award of Attorneys' Fees
Tandycrafts, Inc. v. Initio Partners; In corporate litigation, the court may order the payment of counsel fees and related expenses to a plaintiff whose efforts resulted in the creation of a common fund or the conferring of a corporate benefit.
LLC or Corporation
Weinstein v. Colborne Foodbotics LLC; An LLC is distinct from a corporation and is not governed by the Colorado Business Corporation Act or case law decided thereunder.