Your Business Deserves To Thrive
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…
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 Sneed v. Webre.[1] While the case we discussed was decided under Texas law, the principles underlying…
New York. According to a 2010 study of a dataset of 2908 cases from 1658 to 2006, New York courts allow veil piercing in about 49.81% of cases and is among the most prominent producers of veil piercing cases.[1] In Agai v. Diontech Consulting, Inc.,[2] a recent case, a creditor sought to pierce the veil of a corporation, arguing that…
Photo by Michael Coghlan / CC BY 2.0 Acquiring another company is a common way to expand a business. The potential advantages of a strategic acquisition are numerous—it can add value to the combined entity by eliminating redundancies in operational costs, diversifying (if adding a new line of business), solidifying a supply line (by acquiring a supplier or customer), or…
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…
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…
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…
Delaware: Reasonable Restrictions. In Delaware, any stockholder is entitled to inspect the corporation’s books and records upon written demand, for any proper purpose.[1] The statute defines a proper purpose as a purpose reasonably related to such person’s interest as a stockholder.[2] Additionally, the statute grants the Court of Chancery the authority to “prescribe any limitations or conditions with reference to…
Maryland: Hogans v. Hogans Agency, Inc. In Hogans v. Hogans Agency, Inc., Hogans was a 37.5% stockholder of Hogans Agency, Inc., an insurance and real estate brokerage company, and an owner of a competing business.[1] In December 2013, Hogans sent a letter to the corporation requesting inspection of corporate records; the corporation responded by providing copies of the bylaws, minutes…
We have covered several aspects of shareholder rights in our blogs, including the rights of minority shareholders in the context of oppression by the majority (available here and here) and, more recently, the right to bring a derivative action on behalf of a wholly owned subsidiary (available here). The fundamental principle underlying all these claims is that shareholders own the…