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14 Cards in this Set
- Front
- Back
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Piercing the corporate veil |
failure to comply with corporate formalities |
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Business judgement rule |
presumption that officers/directors were acting in the best interest of the shareholders |
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Breach of Duty of Loyalty |
Self dealing/conflict of interest Use of corporate opportunity -can't compete against the company |
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Breach of Duty of Loyalty (Anderson v Bellino Case) |
Anderson and Bellino both started lottery casino together, Bellino accuses Anderson of not doing enough. Keno contract happens, Bellino forms a new company called La Vista to bid for Keno. Both Bellino and Anderson bid on the contract, Anderson filed suit against Bellino on basis they had usurped corporate opportunity. Anderson won, ordered Bellino to pay back $600000 to Lottery. |
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Breach of Duty of Care |
No rational business purpose Illegal or uninformed decision |
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Shareholder rights |
Rightto inspect and copy minute book, shareholder lists, accounting recordüRighttoattend Annual Meeting RighttoVote Righttomake shareholder proposal if you own 1% or $2000 of stock -Shareholderproposalsare not binding on board/management RighttoElect and Remove Directors Say on Pay |
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Shareholder Rights (Raul v Rynd) |
Raulv. Rynd: the Board did not violate itsfiduciary duty by ignoring shareholder vote on executive pay |
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Litigation to Enforce Shareholder Rights or Challenge Director/Officer actions |
Direct shareholder Class Action shareholder lawsuit Derivative lawsuit -Demandrequired, or must show futility of demandoAlldamages go to corporation, not shareholders |
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Shareholder Proposals (social policy agenda, green house gases etc) |
Proposal cannot: relate to the ordinary business op of business interfere with the company's proxy solicitation require the company to break a law seek satisfaction of a personal grievance against the company |
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Say on pay |
at least once every three years, companies must take a non-binding shareholder vote on executive compensation. |
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Brehm v Eisner |
Michael Ovitz sucked at managing, left 14 months, but got a huge executive compensation. $130 million |
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Fundamental Corporate changes |
Mergers Sale of assets Dissolution Amendments to the charter amendments to the baylaws |
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Derivative lawsuits |
A derivative lawsuit is brought by shareholders to remedy a wrong to the corporation. Thesuit is brought in the name of the corporation, and all proceeds of the litigation go to thecorporation. |
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Rights and obligations of controlling shareholders |
may not enter into unfair business transactions with the corporation Have a fiduciary duty to minority shareholders may not exclude minority shareholders from beneficial arrangements involving stock and are prohibited from expelling minority shareholders unless the expulsion is done for a legit business purpose |
