McBride Law Blog

BLOG

Tagged Posts: misappropriation’

New York Law Update: Shareholders’ Inspection Rights

April 5, 2016

In our previous blog series on Shareholders’ Right To Inspect Corporate Books and Records, we discussed under what circumstances shareholders may inspect corporate books and records and what constitutes proper purposes reasonably related to shareholder interests.  For New York law, we looked at Tatko v. Tatko Bros. Slate Co.,[1] which held that a shareholder’s quest to determine the value of his shares was a proper purpose for inspecting the corporation’s financial records, and Ret. Plan for Gen. Employees of the City of North Miami Beach v.Read the rest

Insider Trading on the Green (Part 2)

September 19, 2015

SEC v. McPhail.

According to the SEC, McPhail’s source of inside information was a member of AMSC’s senior management, who became close friends with McPhail as members of the same country club.[1]  The SEC complaint shows that the two developed a close bond over the years, communicating almost daily and playing golf together, and exchanged intimate and confidential details about their personal and professional lives, relying on each other for support and advice.[2]  Unbeknownst to the AMSC executive, however, McPhail was in for something else.  … Read the rest

Insider Trading on the Green (Part 1)

September 12, 2015

When it comes to securities law violations, people tend to think that the SEC only goes after big fish, but that is plainly not true.  We mentioned in our previous blog series on exempt offerings (available here) that there is no exception for small guys.  We also looked at the SEC’s broken windows enforcement policy (available here and here), under which the agency vows to pursue all types of violations, big and small.  Insider trading, in particular, seems to be an area where seemingly ordinary people get caught often, after mistakenly believing that their small-scale violations and private (sometimes coded) communications would go unnoticed. … Read the rest

Maryland Law Update: Minority Shareholder Rights

September 5, 2015

Bontempo v. Lare.

In February 2000, Bontempo joined a company founded by the Lares, his former colleague and his wife, as a minority shareholder and employee.[1]  The arrangement was later formalized to a certain extent in the form of an attachment to the stockholders agreement, which, as it turned out, inadequately memorialized the parties’ understanding as to the terms of Bontempo’s employment and ownership.[2]  Over the years, the company grew and the relationship between the parties soured.  The Lares, on one hand, became dissatisfied with Bontempo’s commitment to the business and cut his salary; Bontempo, on the other hand, was concerned that the Lares were taking distributions as shareholders without notifying or providing him with his proportionate shares.… Read the rest

Maryland Law Update: Minority Shareholder Rights

August 29, 2015

In our previous blog posts on Ritchie v. Rupe,[1] available here and here, we discussed the rights of minority shareholders in a closely held corporation under Texas law.  We explained that, post-Rupe, in Texas, minority owners would have to show abuse of authority with the intent to harm the interests of one or more of the shareholders that creates a serious risk of harm to the corporation in order to show shareholder oppression.[2]  Moreover, a Texas minority shareholder who successfully proves oppression would no longer be entitled to a court-ordered buyout; instead, the sole remedy for oppression would be the appointment of a receiver.… Read the rest

All postings are intended to be planning tools to familiarize readers with some of the high-level issues discussed therein. No posting is intended to be a comprehensive discussion and additional details should be discussed with your transaction planners including attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity.