Corporations Code section 2010, provides in relevant part: “(a) A corporation which is dissolved nevertheless continues to exist for the purpose of winding up its affairs, prosecuting and defending actions by or against it and enabling it to collect and discharge obligations, dispose of and convey its property and collect and divide its assets, but not for […]
Sanctions Order Reversed After Grant Of Summary Judgment Affirmed.
Plaintiff, a corporation, propounded special interrogatories to defendant. Defendant did not provide answers because it contended plaintiff, as a suspended corporation, lacked the capacity to prosecute the action. The trial court agreed and awarded monetary sanctions to defendant. Subsequently, the trial court granted summary judgment in favor of defendant. The appellate court affirmed the grant […]
No Disqualification Of Counsel Because No Attorney-Client Relationship.
In one case, a lawyer represented a client who was one of two shareholders in a development corporation. That client sued the other shareholder for violation of fiduciary duties. The other shareholder filed a petition for court supervision of the winding up of the corporation. In the winding-up action, the same lawyer who represented the […]
Failure To Plead Alter Ego Theory Does Not Preclude Amendment Of Judgment If Alter Ego Was Virtually Represented In The Action.
After obtaining judgment against Sayrahan Group, LLC, plaintiff discovered that D’Arco had always had a 100% ownership of the company and made all of its business decisions. Plaintiff filed a motion to amend the judgment to add D’Arco as a judgment debtor. The trial court denied the motion, holding plaintiff had to file a new […]
Same Business, Different Name.
Investor provided $75,000 toward investment and was to receive 100 percent of the net cash receipts until his investment was recouped. Unbeknownst to him, the company formed another company doing the same kind of business under a different name. The court found the corporation could not escape liability by shifting assets and changing its name. […]
Alleged Expanded Fraud Exception To The Continuous Ownership Rule Rejected.
Plaintiff brought a shareholder derivative action on behalf of a financial institution, a Delaware corporation, after it was acquired by a bank and merged into another corporation. The trial court affirmed defendant’s demurrer without leave to amend. Delaware’s continuous ownership rule requires a plaintiff in a shareholder derivative action to retain stock ownership for the […]
Court Dismisses Appeal When Corporate Party Filed A Certificate Of Dissolution Of Corporation.
One week after being served with appellant’s opening brief, a corporation filed a certificate of dissolution with the California Secretary of State, indicating the corporation “has been completely wound up.” The appellate court noted a dissolved corporation continues to exist for the purpose of winding up its affairs, but that “the continued pursuit of this […]