For Your Data Sutherland V. Sutherland Example Brief
November 07, 2020
Edit
Sutherland v. Sutherland case brief summary
958 A.2d 235
SYNOPSIS:
-Plaintiff stockholder filed a derivative as well as double derivative activity against defendants, board of directors, a timber company, as well as a lumber company, alleging breach of fiduciary duty as well as waste. The directors as well as companies filed a motion to dismiss the complaint.
FACTS:
-The Sutherland menage unit of measurement owned all the stock of Dardanelle Timber Company, a Delaware enterprise which was itself the sole shareholder of Sutherland Lumber-Southwest, Inc. (Southwest).
-In improver to beingness the controlling shareholders of Dardanelle, Perry as well as Todd Sutherland (defendants) were directors as well as officers of both corporations.
-Mark Sutherland (defendant) held no equity involvement simply is the tertiary manager of both corporations. -Martha Sutherland (plaintiff) was a minority shareholder of Dardanelle as well as was a manager of Southwest earlier beingness ousted inward 2004.
-The certificates of incorporation for both Dardanelle as well as Southwest included an exculpatory provision: which purported to allow directors to engage inward self-interested transactions amongst the corporation, provided they discover their involvement to the other directors as well as the board equally a whole approves.
-The provision farther stated that the self-interested directors may vote inward favor of the transaction equally amongst whatever other matter.
-In 2006, Martha Sutherland filed a derivative electrical load on behalf of Dardanelle as well as Southwest against Perry, Todd, as well as Mark Sutherland for waste materials as well as breach of fiduciary duty.
-The electrical load alleged that Perry as well as Todd, amongst Mark’s acquiescence, caused the companies to render them amongst a bring out of personal benefits, including personal flights, revenue enhancement as well as accounting services, as well as excessive compensation.
-The directors of both companies appointed an investigator equally a fellow member of the board as well as formed a particular litigation commission (SLC), which consisted entirely of the investigator.
-After the SLC concluded that it was non inward the best interests of the companies to pursue the litigation, the companies moved to dismiss.
HOLDING:
The trial courtroom held that the SLC did non test the reasonableness of its investigation into the stockholder's claims that the companies paid the directors' personal expenses.
ANALYSIS:
-Significant errors existed inward the SLC's report, which undermined the trial court's confidence inward the entire investigation.
-The explanation equally to why the timber society paid for improvements made to the trouble solid of 1 of the directors was insufficient.
-The SLC's determination non to bear an analysis of the payments as well as to omit whatever advert of them gave rising to substantial questions concerning the reasonableness as well as practiced faith of the investigation. -Several of the most of import interview summaries failed to tape the witnesses' answers.
-The desultory investigation that was undertaken into the companies' full general ledgers likewise raised questions most the reasonableness as well as practiced faith of that investigation.
OUTCOME: The trial courtroom denied the motion to dismiss.
---
Interested inward learning how to croak the altitude grades inward your police schoolhouse classes? Want to acquire how to study smarter than your competition? Interested inward transferring to a high ranked school?
958 A.2d 235
SYNOPSIS:
-Plaintiff stockholder filed a derivative as well as double derivative activity against defendants, board of directors, a timber company, as well as a lumber company, alleging breach of fiduciary duty as well as waste. The directors as well as companies filed a motion to dismiss the complaint.
FACTS:
-The Sutherland menage unit of measurement owned all the stock of Dardanelle Timber Company, a Delaware enterprise which was itself the sole shareholder of Sutherland Lumber-Southwest, Inc. (Southwest).
-In improver to beingness the controlling shareholders of Dardanelle, Perry as well as Todd Sutherland (defendants) were directors as well as officers of both corporations.
-Mark Sutherland (defendant) held no equity involvement simply is the tertiary manager of both corporations. -Martha Sutherland (plaintiff) was a minority shareholder of Dardanelle as well as was a manager of Southwest earlier beingness ousted inward 2004.
-The certificates of incorporation for both Dardanelle as well as Southwest included an exculpatory provision: which purported to allow directors to engage inward self-interested transactions amongst the corporation, provided they discover their involvement to the other directors as well as the board equally a whole approves.
-The provision farther stated that the self-interested directors may vote inward favor of the transaction equally amongst whatever other matter.
-In 2006, Martha Sutherland filed a derivative electrical load on behalf of Dardanelle as well as Southwest against Perry, Todd, as well as Mark Sutherland for waste materials as well as breach of fiduciary duty.
-The electrical load alleged that Perry as well as Todd, amongst Mark’s acquiescence, caused the companies to render them amongst a bring out of personal benefits, including personal flights, revenue enhancement as well as accounting services, as well as excessive compensation.
-The directors of both companies appointed an investigator equally a fellow member of the board as well as formed a particular litigation commission (SLC), which consisted entirely of the investigator.
-After the SLC concluded that it was non inward the best interests of the companies to pursue the litigation, the companies moved to dismiss.
HOLDING:
The trial courtroom held that the SLC did non test the reasonableness of its investigation into the stockholder's claims that the companies paid the directors' personal expenses.
ANALYSIS:
-Significant errors existed inward the SLC's report, which undermined the trial court's confidence inward the entire investigation.
-The explanation equally to why the timber society paid for improvements made to the trouble solid of 1 of the directors was insufficient.
-The SLC's determination non to bear an analysis of the payments as well as to omit whatever advert of them gave rising to substantial questions concerning the reasonableness as well as practiced faith of the investigation. -Several of the most of import interview summaries failed to tape the witnesses' answers.
-The desultory investigation that was undertaken into the companies' full general ledgers likewise raised questions most the reasonableness as well as practiced faith of that investigation.
OUTCOME: The trial courtroom denied the motion to dismiss.
---
Interested inward learning how to croak the altitude grades inward your police schoolhouse classes? Want to acquire how to study smarter than your competition? Interested inward transferring to a high ranked school?