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Shareholder Derivative Action

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Lee v. Fisher, No. 21-15923, 2023 U.S. App. LEXIS 13521 (9th Cir. June 1, 2023)

A Delaware corporation's bylaw requiring any shareholder derivative suit be brought in Delaware Chancery Court is enforceable.  Such a forum selection clause does not offend any federal statute or public policy.  Here, the complaint alleged a claim under Securities Exchange Act section 14(b) (15 USC 78n) which governs proxy statements.  The Securities Exchange Act's non-waiver provision applies only to the… Read More

Sirott v. Superior Court, No. A164037, 2022 Cal. App. LEXIS 389 (Ct. App. May 5, 2022)

To maintain a derivative action on behalf of a limited liability company under Corp. Code 17709.02, just as required for a shareholder to bring a derivative action on a corporation's behalf under Corp. Code 800, the plaintiff must maintain continuous membership in the limited liability company from the time of the alleged wrongful acts through completion of the derivative action. … Read More

Tola v. Bryant, No. A161150, 2022 Cal. App. LEXIS 241 (Ct. App. Mar. 24, 2022)

This decision affirms dismissal of a shareholder derivative action against Intel's board members arising out of Intel's allegedly tardy response to learning that its chips contained two defects that could be exploited by hackers.  Applying Delaware law, the decision holds that the complaint failed to allege specific facts showing that a majority of Intel's board received a material personal benefit… Read More