Justia Corporate Compliance Opinion Summaries

SES is a company that makes and supplies outer components or "skins" for grocery store refrigeration units. SES was formed in 2009 when its immediate predecessor, SER, was foreclosed by its bank. SES subsequently sued appellants, employees of SER, for injunctive relief under the Georgia Trade Secrets Act (GTSA), OCGA 10-1-760 et seq. Appellants then appealed, contending that the trial court erred when it found SES had standing to sue and when it granted equitable relief after finding that the preemption clause of the GTSA was inapplicable. The court held that, based upon the unique facts of the case, the trial court did not err when it declined to deny SES's action for lack of standing. The court found, however, that the trial court manifestly abused its discretion when it granted equitable relief to SES because the trial court's reliance on Owens v. Ink Wizard Tattoos was erroneous and the GTSA superseded all conflicting laws providing restitution or civil remedies for the misappropriation of trade secrets. Accordingly, the trial court's award of equitable relief pursuant to OCGA 9-5-1 was a manifest abuse of discretion and must be reversed.View "Robins, et al. v. Supermarket Equipment Sales, LLC; Smith v. Supermarket Equipment Sales" on Justia Law

This case involved the dispute between Gila Dweck, the CEO, director, and 30% stockholder in Kids International Corporation (Kids) and Albert Nasser, the Chairman and controlling stockholder of Kids. Dweck and Nasser accused each other of breaching their fiduciary duties and Nasser asserted third-party claims for breach of fiduciary duty against Dweck's colleagues Kevin Taxin, Kids' President, and Bruce Fine, Kids' CFO and corporate secretary. The court found that Dweck and Taxin breached their fiduciary duties to Kids by establishing competing companies that usurped Kids' corporate opportunities and converted Kids' resources; Dweck further breached her fiduciary duties by causing Kids to reimburse her for personal expenses; Fine breached his fiduciary duties by abdicating his responsibility to review Dweck's expenses and signing off on them wholesale; Dweck, Taxin, and Fine breached their duties by, inter alia, transferring Kids' customer relationships and business expectancies to their competing companies; and Dweck, Taxin, and Fine were liable to Kids for the damages they caused by their breaches of duty. The court largely rejected Dweck's breach of fiduciary duty claims against Nasser. Nevertheless, Nasser failed to carry his burden of proving that it was entirely fair for Kids to pay him a consulting fee that compensated him equally with Dweck when he performed no work for kids. Nasser was liable to Kids for those fees. Dweck also established her entitlement to an accounting from Nasser for some of the amount in cash that Kids had on hand at the time of the split.View "Dweck, et al. v. Nasser, et al." on Justia Law

Petitioners argued that defendants - who were the then-parent company and directors of Aristotle Corporation - breached their fiduciary duties by not disclosing all material facts in connection with a short-form merger under 8 Del. C. 253. At issue was whether petitioners, who already had the right to seek appraisal in connection with a section 253 merger, could add an additional claim alleging that the directors breached their fiduciary duty to disclose the material facts necessary for the stockholders to determine whether to seek appraisal when the only purpose of pressing the disclosure claim was to give petitioners the redundant right of a "quasi" version for something that they already possessed? Because petitioners have not alleged that they have suffered any cognizable injury that gave rise to standing, and because they were therefore asking in these unique circumstances for an improper advisory decision, the court granted defendants' motion to dismiss.View "In Re: Appraisal Of The Aristotle Corp." on Justia Law

Sterling, a limited liability corporation engaged in the business of importing and selling Iraqi currency, hired Grossi, a company that specialized in web-based marketing strategies, in an effort to create an internet-based sales platform. After the parties' dispute over the modification of a compensation scheme by which Grossi was paid, Sterling filed suit against Grossi seeking a temporary restraining order, interlocutory and permanent injunctions, and damages. Grossi subsequently appealed the grant of interlocutory injunction in favor of Sterling, contending that the trial court erred by entering an interlocutory injunction that failed to preserve the status quo. The court found that the trial court did not abuse its discretion by entering the injunction in light of Grossi's threats to do harm to the website. The court also rejected Grossi's contention that the interlocutory order was, in reality, a mandatory, permanent injunction affecting the rights of the parties. Accordingly, the judgment was affirmed.View "Grossi Consulting, LLC, et al. v. Sterling Currency Group, LLC" on Justia Law

In this original proceeding Allcat, a limited partnership, and one of its limited partners sought an order directing the Comptroller to refund franchise taxes Allcat paid that were attributable to partnership income allocated, but not distributed, to its natural-person partners. Allcat claimed it was entitled to a refund for two reasons. First, the tax facially violated Article VIII, Section 24 of the Texas Constitution because it was a tax on the net incomes of its natural-person partners that was not approved in a statewide referendum. Second, as applied by the Comptroller, to Allcat and its partners, the franchise tax violated Article VIII, Section 1(a) of the Constitution, which required taxation to be equal and uniform. The court held that: (1) the tax was not a tax imposed on the net incomes of the individual partners, thus it did not facially violated Article VIII, Section 24; and (2) the court did not have jurisdiction to consider the equal and uniform challenge.View "In re Allcat Claims Service, L.P. and John Weakly" on Justia Law

This was an action to inspect the books and records of a corporation under 8 Del. C. 220. A shareholder brought this action after a series of reports and events, including the resignation of the company's independent auditor, raised suspicions that the company had engaged in fraud and falsified its financial statements. The court found that the shareholder had established proper purposes to inspect the books and records of the company. Therefore, the court granted the shareholder's demand as to the documents at issue, but only to the extent the documents were necessary for one of his proper purposes. The court also denied the company's request to stay this action.View "Paul v. China MediaExpress Holdings, Inc." on Justia Law

Plaintiffs filed this lawsuit on behalf of a class of stockholders of Occam. Defendants moved for sanctions against all plaintiffs other than Derek Sheeler for trading on the basis of confidential information obtained in this litigation. With respect to Michael Steinhardt and the funds, the motion was granted. Consistent with prior rulings by this court when confronted with representative plaintiffs who have traded while serving in a fiduciary capacity, Steinhardt and the funds were dismissed from the case with prejudice, barred from receiving any recovery from the litigation, required to self-report to the SEC, directed to disclose their improper trading in any future application to serve as lead plaintiff, and ordered to disgorge profits. With respect to Herbert Chen, the motion was denied.View "Steinhardt, et al. v. Howard-Anderson, et al." on Justia Law

Plaintiff challenged two transactions in this purported class action brought on behalf of the former public holders of LP units of EPE. On behalf of the first of the two purported classes, plaintiff challenged EPE's sale of Teppco GP to Enterprise Products (the 2009 Sale). On behalf of the second purported class, plaintiff challenged the merger of EPE into a wholly-owned subsidiary of Enterprise Products (the Merger). Defendants moved to dismiss all claims, or in the alternative, to stay this action pending the resolution of a related case. The court held that plaintiff had standing to bring the claims asserted in Counts I, III, and V on behalf of the public holders of EPE LP units who continuously held their units from the date of the 2009 Sale through the effective date of the Merger. However, all six counts were dismissed for failure to state a claim. Accordingly, defendants' motion to dismiss was granted.View "Gerber v. Enterprise Products Holdings, LLC, et al." on Justia Law

Great-West asserted claims against defendants in an eight count complaint and the court granted defendant's motion to dismiss in part. At issue are the remaining counts of the complaint which revolve around Section 12.2(c) of the LP Agreement. The court held that Great-West's motion for partial summary judgment was denied, except as to Count I, which was granted. Great-West was entitled to a declaration that the Expense Assumption could not increase until TH Lee had negotiated in good faith. Defendants' motion for summary judgment was denied as to Counts II and VII, and granted as to Counts IV, V, and VI. Great-West's claims for mistake and fraud failed as a matter of law.View "Great-West Investors LP v. Thomas H. Lee Partners, L.P., et al." on Justia Law

The city of Winchester and its collector (Winchester) filed a class action lawsuit against Charter Communications on behalf of itself and other similarly situated Missouri municipal corporations and political subdivisions, seeking a declaratory judgment requiring Charter and other telephone service providers to comply with ordinances requiring them to pay a license tax on gross receipts derived from fees and services connected to their operations and an order requiring Charter to pay all license taxes owed to the class. The circuit court struck Winchester's claims on the basis of Mo. Rev. Stat. 71.675, which bars cities and towns from serving as class representatives in suits to enforce or collect business license taxes imposed on telecommunications companies. The Supreme Court quashed the court's preliminary writ of prohibition and granted Winchester's request for a permanent writ of mandamus directing the trial court to vacate its order, holding that the court exceeded its authority in striking Winchester's class action allegations pursuant to section 71.675, as the statute violated Mo. Const. art. V, 5 because it amended a procedural rule of the Court.View "State ex rel. Collector of Winchester v. Circuit Court (Jamison)" on Justia Law