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11 Cards in this Set
- Front
- Back
What are the two views regarding the SH's demand for corporate information?
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1) Common Law View
2) Statutory View |
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What are the elements of the Common Law view?
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SH (P)of a Corp has B of P to show by the preponderance of the evidence, w/a formal, written request;
(1)A Proper Purpose(profit) (2)Essential to the Proper Purpose (for each item requested) (3) A Credible Basis of finding probable corporate wrongdoing. |
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Common Law:
Define Proper Purpose |
It is reasonably related to the Plaintiff’s interest as a shareholder, which means profit.
a) Mixed Purpose: When the shareholder has both a proper and improper purpose, but the proper purpose is primary, the improper purpose is irrelevant. . |
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Common Law:
Define Essential to the Proper Purpose |
For each item wanted, the shareholder must show that the item is essential to the proper purpose (rel to corp finances)
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Is a Shareholder list fall within a Proper Purpose?
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Yes, Re: Sholder lists under the Common Law: There is an automatic right to get a list of SH, even to unseat directors; it is a Proper Purpose, b/c SH democracy is a proper purpose.
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Common Law:
Define Credible Basis |
There must be credible basis to find probable corporate wrongdoing that is satisfied through documents, logic, testimony, or otherwise.
a)Neither mere curiosity b)or a desire for a fishing expedition will suffice. c)SH does not need to prove the wrongdoing itself (is only going to court to get the documents) |
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What is the key element of the Statutory view?
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Shift in B of P for SH list, only. D (corp mgmnt) has B of P that P has improper purpose. Therefore, similar to common law except:
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The Statutory view is similar to the Common Law view except:
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1) Usually has duration or amount of ownership requirement for SH. E.g, you have to have owned the stock for six months. (or 1000.00 worth or 1% of stock, which ever is lower for a year is typical requirement)
2) Shareholder Lists: shifts B of P in C/L from P to D for SH list, only. (P will still get SH list unless D can show improper purpose.) P still has the B of P for all other records 3)Court can impose conditions on release of documents. |
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Shareholder list:
What is a Cede list? |
A Cede list is list of owners of stock behind the depositories (usually names the brokerage firms)
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Shareholder list:
What is a NOBO list? |
Non-objecting beneficial owners (NOBO) list has the names of the actual people that vote (the real owners, voluntarily on list), P gets NOBO list from the corp.
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What is the split in j/regarding NOBO lists?
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Some j/say that the SH can have whatever NOBO list the corp has (even if old), and some (modernly) say that the corp must generate only new NOBO lists.
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