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Delaware Law Update

Delaware Law Update: The Meaning of “Control” in “Controlling Stockholder” (Part II)

| Apr 21, 2016 | , , , ,

In Calesa Associates, L.P. v. American Capital, Ltd., a group of minority stockholders of Halt Medical, Inc. (the “company”) filed a lawsuit for breaches of fiduciary duty in connection with a corporate transaction against current and former directors of the company and a stockholder that allegedly controlled them, American Capital, Ltd. and its affiliates (collectively, “American”).[1]  According to the minority…

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Delaware Law Update: When Is a Stockholder’s Pre-Suit Demand Excused? (Part II)

| Apr 19, 2016 | , , ,

Delaware County Employees Retirement Fund v. Sanchez involved a complicated business transaction between a private company wholly owned by the family of A.R. Sanchez and a public company in which the Sanchez family formed the largest stockholder bloc.[1]  The plaintiff stockholders alleged that the transaction between the two companies resulted in a gross overpayment by the public company and unfairly…

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Delaware Law Update: The Meaning of “Control” in “Controlling Stockholder” (Part I)

| Apr 14, 2016 | , , , ,

We write frequently about minority shareholder rights here.  We started with Ritchie v. Rupe, a Texas Supreme Court case that completely changed the lay of the land by making it harder for minority shareholders to bring lawsuits based on oppressive conduct by majority shareholders (see here).  We discussed Bontempo v. Lare (available here), a Maryland case on remedies for shareholder…

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Delaware Law Update: When Is a Stockholder’s Pre-Suit Demand Excused? (Part I)

| Apr 12, 2016 | , , ,

In our recent blog post on Wandel v. Dimon, we discussed stockholder’s pre-suit demand.[1]  For those who are not familiar with pre-suit demand, Delaware law requires stockholders to serve a pre-suit demand on the corporation’s board of directors before they can bring a derivative lawsuit on behalf of the corporation, unless doing so would be futile.  In Wandel, the stockholders…

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Delaware law update: Futility of Pre-Suit Demand

| Mar 29, 2016 | , , , ,

In our previous blog series on Texas Double-Derivative Shareholder Suit, we touched briefly on the concept of business judgment rule when we discussed a board of directors’ decision to pursue or forgo corporate causes of action in the context of closely held corporations.  In another recent blog post on Tsui v. Chou, we discussed a recent New York appellate court’s…

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Business Divorces: What Happens When Partners Separate

| Jan 26, 2016 | , , ,

Photo by Alberto G / CC BY 2.0 A Delaware Case: Meissner v. Yun. In our previous blog series on business divorce (available here), we focused on the break-up between two or more business owners due to disagreement or other circumstances, leading to a deadlock, forced sale of the business, or total dissolution. Oftentimes, disputes arise either because there is…

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Protect Your Personal Assets!!: Corporate Formalities Are Not Just Formalities, a Delaware Law Update (Part 2)

On Behalf of | Dec 15, 2015 | , , ,

Hill International, Inc. v. Opportunity Partners L.P. In Hill Int’l, Inc. v. Opportunity Partners L.P., Hill asserted that its announcement in 2014 constituted prior public disclosure of the date of the 2015 annual meeting, and since this disclosure was made more than 70 days in advance, Opportunity’s proposals dated May 7, 2015, was untimely for failing to meet the 30-day-window…

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Protect Your Personal Assets!!: Corporate Formalities Are Not Just Formalities, a Delaware Law Update

On Behalf of | Dec 10, 2015 | , , ,

Many are familiar with the advantages of having a formal entity for business. Limited liability companies, or LLCs, in particular, have gained popularity in recent years and seem to be the entity of choice for small business owners not only because of the liability shield and favorable tax treatment, but also because of the simplicity and flexibility. Mind you, certain…

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Shareholders’ Right To Inspect Corporate Books and Records (Part 5)

On Behalf of | Oct 20, 2015 | , , , , , , ,

Texas: An Issue for the Jury. In Texas, a holder of shares of a corporation for at least six (6) months, or a holder of at least 5% of all of the outstanding shares of a corporation, is entitled to examine and copy the corporation’s relevant books, records of account, minutes, and share transfer records at a reasonable time, in…

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Shareholders’ Right To Inspect Corporate Books and Records (Part 4)

On Behalf of | Oct 15, 2015 | , , , , , ,

New York: Proper Purposes.  The New York statute provides that a shareholder has the right to examine corporate books and records upon at least five (5) days’ written demand for any purpose reasonably related to such person’s interest as a shareholder.[1]  Inspection, however, may be denied if the shareholder refuses to furnish an affidavit to the corporation that such inspection…

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