Source: https://stus.com/Corporations
Timestamp: 2019-04-20 00:16:34+00:00

Document:
Minority shareholders appraisal; fair value; shares; statutory short form merger; controlling fiduciaries; parent corporation; duty of entire fairness; corporate subsidiary.
Defensive devices to merger must be reasonably related to perceived threat.
General partner; ordinary course of partnership business; actual authority; apparent authority.
Schnell v. Chris Craft Industries, Inc.
Inequitable action; amendment of by laws board of directors.
Corporate political speech is protected by the First Amendment.
Prevention of corruption in the political process is a compelling state interest; political speech restrictions on corporations must be narrowly tailored.
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 declare dividends bad faith, willful neglect, abuse of discretion. close corporation.
Actionable course of action; action for damages; board of directors.
Shield shareholders personal liability corporate formalities undercapitalization.
Menard, Inc. v. Dage MTI, Inc.
Bind the corporation agency relationship actual authority agent apparent authority inherent authority principal specific performance.
Shareholder approval sale quantitatively qualitatively corporate assets.
Harrassment deliberate obstruction director removal for cause proxy.
Shareholders right to vote corporate democracy elect.
Noneconomic interests shareholder proposal omit proxy materials.
Proxy materials false and misleading statements private right of action fiduciary duty rescission.
Directors opinions proxy statement rule 14a 9 and 14(a) knowingly false causation.
Materially misleading proxy statement lost state law rights minority shareholder right to a state appraisal.
Parent merge subsidiary, delaware short form merger statute ninety percent rule 10b 5.
Directors owe a duty of loyalty and good faith disclosures knowingly disseminate false information fiduciary derivative action.
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.
Articles of incorporation indemnification employee act in good faith indemnity.
Shareholder ratification ratify a transaction directors material conflict of interest corporate waste. Agency agent principal quorum ratification.
Stock options waste analysis shareholder ratifications constituted waste constructive fraud.
Majority shareholders transfer control of a corporation premium fiduciary responsibility appraisal dividend.
Contract to sell a controlling interest control board of directors. collateral agreement doctrine.
Director independence special litigation committee independent directors.
Corporate officers directors fiduciary duty corporation individual shareholders.
Compelling justification defensive measure board actions.
Shareholder agreements close corporation specific performance.
Close corporation legitimate business purpose freeze out minority shareholder terminating employment valid breach fiduciary duties.
Matter of Kemp and Beatley, Inc.
Minority shareholders seek dissolution de facto dissolution oppression.
Franchisees negligence franchisor liable retains a right of control actual agency apparent agent franchise.
Partnership business indemnify the partnership ordinary course of partnership business.
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.
Validity of a corporate act.
Ross A. Wilson v. Louisiana Pacific Resources, Inc.
Cumulative voting; straight voting; home state corporation.
Full faith and credit clause; internal affairs doctrine.
Internal affairs doctrine; choice of law principle.
Backdate stock option; fraudulent disclosures.
Alter ego, pierce the corporate veil.
Summit Properties, Inc. v. New Technology Electrical Contractors, Inc.
Agent authority; apparent authority; acquiesence unless principal notice.
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.
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.
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.
Proxy statement; SEC requires inclusion of stockholder proposals in proxy statements; shareholder proposals to amend corporate bylaws; Rule 14a-8.
Freeze-out merger; minority shareholders with non-essential votes cannot challenge a merger.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
The business judgment rule is applicable in the context of a takeover, so hostile takeover bids via tender offer may exclude hostile bidders.
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.
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.
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.
Blackmore Partners, L.P. v. Link Energy LLC, business judgment rule, exculpatory clause, fiduciary duty.
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.
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.
Cargill, Inc. v. Hedge, reverse pierce the corporate veil, alter ego of the company.
Stone v. Ritter, statutorily required pre-suit demand on directors.
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.
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.
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.
Louis K. Liggett Co. v. Lee; (From Dissent.) Corporate proliferation comes with both economic advantage and social risk; personal liabillity; piercing the corporate veil.
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.
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.
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; 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.
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.

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