Trigger Words Flashcards
Improper Under State Law Exclusion:
bylaws relate to corporate processes
Relevance Exclusion
less than 5% total assets, net earnings, and gross sales, and not significantly related (not limited to economic significance).
Ordinary business exclusion
subject matter, ordinary business, raise policy issues so significant that appropriate for shareholder vote, transcend day to day business operations
Proxy Rule Violations
materiality = substantial likelihood reasonable shareholder considers important for vote; causation = significant propensity.
Shareholder Inspection Rights
proper purpose (contemplates concern with investment return).
Derivative Action
corporation entitled to recovery
SLC
independent and followed proper and complete procedures.
Oversight:
corporation suffers a loss that the directors could have prevented by properly exercising oversight
Section 141(e):
reasonable reliance on information
Interested director transactions:
full disclosure of material facts
Caremark claim
board did so little to oversee the corporation’s operations and exposure to risk that its failures amount to a conscious disregard of its duty to stay informed.
Fiduciary duty of majority shareholders in close corporation
freeze out frustrates the minority’s reasonable expectations of benefit
Minority shareholder challenge to majority shareholder decision in close corporation
majority shows legitimate purposes, minority then shows less harmful alternatives.
Director deadlock in close corporation
irreparable injury to the corporation or prevent the business of the corporation from being conducted to the advantage of the shareholders
Shareholder deadlock
unable to agree upon whether to discontinue the business or dispose assets.
