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Case Citations [1] (July 2018 through April 2019)

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      PRINCIPLES OF THE LAW OF CORPORATE

                                   GOVERNANCE


                                      PART I. DEFINITIONS

  § 1.23 Interested

  Pa.2018. Cit. in sup. and in fin.; subsec. (c)(2) cit. and quot. in case cit. in sup. Corporation's
  shareholder filed a derivative action for breach of fiduciary duties against, inter alia, board members
  comprising corporation's special litigation committee that had determined that plaintiff s demand for
  litigation over internal audit control deficiencies and accounting errors was unwarranted and not in
  corporation's best interests. The trial court sustained defendants' preliminary objections. This court
  affirmed, holding that the business-judgment rule protected defendants' decision to reject plaintiff s
  litigation demand. In applying the business-judgment rule, the court explained that defendants were not
  interested as defined by Principles of Corporate Governance § 1.23 simply because they declined to
  pursue derivative litigation over corporate accounting errors. Braun on Behalf of USA Technologies,
  Inc. v. Herbert, 180 A.3d 482, 487, 488.



                                      PART VII. REMEDIES

                            CHAPTER 1. THE DERIVATIVE ACTION

  Pa.2018. Cit. in ftn., adopted in case cit. and quot. in sup. and in ftn. §§ 7.02-7.10, which constitutes
  much of Ch. 1. Corporation's shareholder filed a derivative action for breach of fiduciary duties against,
  inter alia, board members comprising corporation's special litigation committee that had determined that
  plaintiff s demand for litigation over internal audit control deficiencies and accounting errors was
  unwarranted and not in corporation's best interests. The trial court sustained defendants' preliminary
  objections. This court affirmed, holding that the business-judgment rule protected defendants' decision
  to reject plaintiff s litigation demand. In applying the business-judgment rule, the court referred to its
  prior adoption of Principles of Corporate Governance § § 7.02-7.10 and § 7.13. Braun on Behalf of USA
  Technologies, Inc. v. Herbert, 180 A.3d 482, 486.

  § 7.01 Direct and Derivative Actions Distinguished

  Ind.App.2018. Subsec. (d) cit. and quot. in case quot. in sup.; Rptr's Note 4 cit. in case quot. in sup.
  Minority member of a closely-held limited-liability company sued company and its majority member,
  alleging, among other things, that majority member breached her fiduciary duties by willfully
  mismanaging company. The trial court entered judgment on a jury verdict for defendants, but denied
  defendants' request for attorney's fees. Affirming, this court held, among other things, that the trial court
  did not abuse its discretion by declining to find that plaintiff s claims were frivolous on the sole basis
  that they should have been brought in a derivative action rather than in a direct action. The court noted
  that, according to the Principles of the Law of Corporate Governance § 7.01, courts in many cases

                              COPYRIGHT 02019 By THE AMERICAN LAW INSTITUTE
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            For earlier citations, see the Appendices, Supplements, or Pocket Parts, if any, that correspond to the subject matter under examination.

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