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Tag Archives: Corporate

Contract – Guaranty – Lack of Consideration – Future Language – Corporate – Affiliated Companies (access required)

Procar II, Inc. v. Dennis Even though plaintiff continued to extend credit to Southeastern Material, Inc. after defendants agreed to personally guarantee Southeastern’s $611,500 debt, since the guaranty makes no mention of any future obligations - it refers only to the debt “due to and owing” - the guaranty did not apply to future extensions of credit. The guaranty was not supported by adequate consideration and is therefore unenforceable between the parties.

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Corporate Derivative & Direct Claims – Officer & Director Removal – Accounting Demand — Share Buy-Back Plan (access required)

Technik v. WinWholesale Inc. Plaintiff alleges that defendant WinWholesale Inc. wanted a controlling interest in nominal defendant Charlotte Winnelson Co., obtained it through a voting agreement, fired plaintiff from his position as president of Charlotte Winnelson, and mismanaged the transition from plaintiff to his successor resulting in a loss in value to Charlotte Winnelson. While plaintiff says this was done in bad faith, except for the mismanagement assertion, what plaintiff describes is in fact routine conduct for directors engaged in fundamental business decision making.

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Labor & Employment – Termination — Breach of Contract Claim – Corporate – Share Issuance – Wage & Hour Act – Bonus (access required)

Mancinelli v. Momentum Research, Inc. Plaintiff abruptly left her job, taking an immediate leave of absence and notifying her supervisors of this leave through a letter which instructed the defendant-employer not to contact her; moreover, plaintiff failed to inform her supervisors of the status of the project on which she was working prior to her departure and refused to turn over information related to the project. The employer had cause to terminate plaintiff pursuant to § 5(a) of the parties’ employment contract (“Employee’s failure or refusal to perform his or her job duties or other breach of a material term of this Agreement”).

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Corporate – Tort/Negligence – Fraud — Investor – Individual Lawsuit – Derivative Shareholder Claim (access required)

Rivers v. Wachovia Corp. An investor who suffered losses in 2007 when his 100,000 shares of Wachovia stock plunged from $56.65 per share price to below $1 cannot bring an individual suit based on defendant corporate officers’ alleged fraud about Wachovia’s financial health; the 4th Circuit says the investor does not qualify for any exception to the general rule that plaintiff must use a derivative shareholder claim for injuries to the corporation.

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Corporate – Derivative Action – Civil Practice – Standing – Domestic Relations – Res Judicata – Attorney’s Fees (access required)

Sutton v. Sutton In the parties’ 2007 domestic proceeding, plaintiff surrendered to defendant any and all interest she had in the corporation that is the subject of this derivative action. Therefore, plaintiff lacks standing to bring this derivative action. Defendant’s motion to dismiss is granted. Defendant’s motion for costs pursuant to G.S. § 55-7-46 is also granted in the amount of 22,751.08.

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Civil Practice – Attorneys – Corporate – Failure to Retain Counsel – Scheduling Violations (access required)

Inspirational Network, Inc. v. TMH Telemedia Services Ltd. In federal court, corporations can only litigate through counsel. The corporate defendant dismissed defense counsel the month before trial, and the court allowed counsel to withdraw; at the same time, the court ordered defendant to retain replacement counsel by Nov. 1, 2011, so defendant would be ready for trial as scheduled on Nov. 14, 2011. Defendant failed to retain replacement counsel and failed to comply with the scheduling order.

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Corporate – Shareholder Derivative Suit – Individual Claims – 50-50 Ownership (access required)

LeCann v. Cobham Where each individual party owns 50 percent of the shares in the defendant-limited liability companies and dental practices, and each party alleges that the other owes her “a duty of care, good faith, loyalty, fair dealing, full disclosure, avoidance of self-dealing” with respect to these entities, there is a genuine issue of material fact as to whether plaintiff has valid individual claims against the individual defendant. The court denies defendant’s motion for summary judgment on plaintiff’s claims against defendant individually. The court also denies defendant’s motion for summary judgment based on her argument that plaintiff failed to make sufficient demand before filing shareholder’s derivative claims.

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Landlord/Tenant – Lease Termination – Affidavits – Ejectment – Corporate – De Facto Officer (access required)

Havelock Yacht Club, Inc. v. Crystal Lake Yacht Club, Inc. Where the plaintiff-landlord terminated a lease and sought to eject the defendant-tenant from the premises, summary judgment was properly granted to the landlord since the tenant’s affidavits did not create a genuine issue of material fact regarding the validity of the landlord’s termination of the lease.

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Corporate – Shareholder Derivative Suit – Tort/Negligence -Breach of Fiduciary Duty – Civil Practice – Statute of Limitations – Delaware Law (access required)

Curtis v. Barnet Since the corporation at issue in this shareholder derivative suit is a Delaware corporation, Delaware law controls. Delaware’s three-year statute of limitations on claims for breach of fiduciary duty begins to run at the moment of the wrongful act. In this case, at the very latest, the wrongful act occurred by the end of the second quarter of 2007; therefore, plaintiff’s Oct. 14, 2010 complaint was not timely filed. Defendants’ motion to dismiss is granted.

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Civil Practice – Subject Matter Jurisdiction – First Impression — Judgments – Execution – Supplemental Proceedings – Corporate – Piercing the Veil (access required)

Travelers Indemnity Co. of Connecticut v. Triple S Marketing Group North Carolina’s supplemental proceedings statutes do not afford a trial court jurisdiction over a motion to pierce the corporate veil of a judgment debtor. We reverse the trial court’s order allowing plaintiff to execute its judgment against individuals who were not party to the underlying lawsuit.

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