trust fund doctrine in California

2015(See Katz v. Chevron Corp. (1994) 22 Cal.App.4th 1352, 1366 , quoting Aronson, supra, 473 A.2d at p. 812 [“under the business judgment rule[,] director liability is predicated upon concepts of gross negligence”].) To the extent the board’s resolution attached to the second amended complaint suggests the directors knew RAC “could not pay . . . its current corporate 18 lease,” it is unclear whether RAC already had defaulted on the lease.

2015(See Cadle Co. v. World Wide Hospitality Furniture, Inc., supra, 144 Cal.App.4th at p. 514, fn. 8 .) Alternatively, appellant argues that the resolution to assign all RAC assets to one creditor was not protected by the business judgment rule because it was a prohibited preferential treatment of that creditor, in violation of the trust-fund doctrine, which imposes on the directors of an insolvent corporation a duty not to “divert, dissipate, or unduly risk corporate assets that might otherwise be used to pay creditors claims.” (Berg, supra, 178 Cal.App.4th at p. 1041 .) Respondents contend that

2009N.D.Cal. 2003) 305 B.R. 529, 535-536 . 21 As Berg has not pleaded facts supporting fraud or concealment by the directors, we have no occasion to address that circumstance in our discussion.

2009Assuming a state of actual insolvency, which is not well pleaded here by facts, 23 and apart from the speculative and contingent nature of Berg’s or Pluris’s ability to actually carry forward and use Pluris’s net operating losses against future income, 24 the thrust of Berg’s claim, pleaded repeatedly, is as follows: The directors effected the assignment for the benefit of creditors, a recognized statutory alternative to liquidation through bankruptcy (Credit Managers Assn. v. National Independent Business Alliance (1984) 162 Cal.App.3d 1166 , *1043 1169-1170 [ 209 Cal.Rptr. 119 ]), rather tha

2009Assuming a state of actual insolvency, which is not well pleaded here by facts, 23 and apart from the speculative and contingent nature of Berg’s or Pluris’s ability to actually carry forward and use Pluris’s net operating losses against future income, 24 the thrust of Berg’s claim, pleaded repeatedly, is as follows: The directors effected the assignment for the benefit of creditors, a recognized statutory alternative to liquidation through bankruptcy (Credit Managers Assn. v. National Independent Business Alliance (1984) 162 Cal.App.3d 1166 , *1043 1169-1170 [ 209 Cal.Rptr. 119 ]), rather tha

2007(California Assn. for Safety Education v. Brown, supra, 30 Cal.App.4th at p. 1285 .) We thus conclude Collier’s claim under charter section 9.113, subdivision (a) fails.

1988Where the trust property has been used by the stockholder for his own purpose, or disposed of by him, he may be held personally liable for the full value thereof.” (Koch v. United States (10th Cir. 1943) 138 F.2d 850, 852 .) The existence of the trust fund doctrine was first acknowledged by this court more than 80 years ago.

1988(Crossman v. Vivienda Water Co., supra, 150 Cal. at p. 579 ; see also Dominguez Land Corp. v. Daugherty (1925) 196 Cal. 468, 480-481 [ 238 P. 703 ], and Trubowitch v. Riverbank Canning Co. (1947) 30 Cal.2d 335, 345 [ 182 P.2d 182 ].) *411 I.

1944It comes to the same conclusion as the Massachusetts case just cited, and arrives at that conclusion by the same process of reasoning." "See also Jones County v. Arnold, 134 Iowa 580 [ 111 N.W. 973 ], and County of Pocahontas v. Katz-Craig Contracting Co., 181 Iowa 1313, 1323 [ 165 N.W. 422 ]." "The trust fund rule was applied in this state in the case of City of Petaluma v. Hickey, 90 Cal.App. 616 [ 266 P. 613 ].

1944It comes to the same conclusion as the Massachusetts case just cited, and arrives at that conclusion by the same process of reasoning." "See also Jones County v. Arnold, 134 Iowa 580 [ 111 N.W. 973 ], and County of Pocahontas v. Katz-Craig Contracting Co., 181 Iowa 1313, 1323 [ 165 N.W. 422 ]." "The trust fund rule was applied in this state in the case of City of Petaluma v. Hickey, 90 Cal.App. 616 [ 266 P. 613 ].

1944It comes to the same conclusion as the Massachusetts case just cited, and arrives at that conclusion by the same process of reasoning." "See also Jones County v. Arnold, 134 Iowa 580 [ 111 N.W. 973 ], and County of Pocahontas v. Katz-Craig Contracting Co., 181 Iowa 1313, 1323 [ 165 N.W. 422 ]." "The trust fund rule was applied in this state in the case of City of Petaluma v. Hickey, 90 Cal.App. 616 [ 266 P. 613 ].

1944It comes to the same conclusion as the Massachusetts case just cited, and arrives at that conclusion by the same process of reasoning." "See also Jones County v. Arnold, 134 Iowa 580 [ 111 N.W. 973 ], and County of Pocahontas v. Katz-Craig Contracting Co., 181 Iowa 1313, 1323 [ 165 N.W. 422 ]." "The trust fund rule was applied in this state in the case of City of Petaluma v. Hickey, 90 Cal.App. 616 [ 266 P. 613 ].

1939Co. v. Salvation Army, supra; Love v. Nashville Agrl. & Normal Institute, 146 Tenn. 550 [ 243 S.W. 304 , 23 A.L.R. 887 ].) If one paying the rates charged by a hospital for care may not recover for negligence because the institution is organized for charitable purposes, the trust fund rule should logically bar a recovery by one who is not a patron of the institution, such as a person injured by an automobile driven by the organization's servant, or an employee injured during the course of his employment.

1939In Stonaker v. Big Sisters Hospital, 116 Cal. App. 375 [ 2 Pac. (2d) 520 ], a judgment based upon a verdict directed in favor of the defendant hospital was affirmed on the authority of the Burdell case.

1939In Stonaker v. Big Sisters Hospital, 116 Cal. App. 375 [ 2 Pac. (2d) 520 ], a judgment based upon a verdict directed in favor of the defendant hospital was affirmed on the authority of the Burdell case.

1935R. 437]; Fornaseri v. Cosmosart Realty etc. Corp., 96 Cal. App. 549 [ 274 Pac. 597 ]; Delaney Producing & Refining Co. v. Crystal Petroleum Products Co., 88 Cal. App. 784 [ 264 Pac. 521 ].) At page 479 [196 Cal.] in the case of Dominguez Land Corp. v. Daugherty, supra, the court says: “ . . . even those assets to which the so-called trust-fund doctrine is applicable arc not charged with any enforceable trust or with any equitable lien on behalf of any general creditor of the corporation, if it be a solvent, going concern; and that such creditors have no vested right of any nature whatever in o

1935R. 437]; Fornaseri v. Cosmosart Realty etc. Corp., 96 Cal. App. 549 [ 274 Pac. 597 ]; Delaney Producing & Refining Co. v. Crystal Petroleum Products Co., 88 Cal. App. 784 [ 264 Pac. 521 ].) At page 479 [196 Cal.] in the case of Dominguez Land Corp. v. Daugherty, supra, the court says: “ . . . even those assets to which the so-called trust-fund doctrine is applicable arc not charged with any enforceable trust or with any equitable lien on behalf of any general creditor of the corporation, if it be a solvent, going concern; and that such creditors have no vested right of any nature whatever in o

1935R. 437]; Fornaseri v. Cosmosart Realty etc. Corp., 96 Cal. App. 549 [ 274 Pac. 597 ]; Delaney Producing & Refining Co. v. Crystal Petroleum Products Co., 88 Cal. App. 784 [ 264 Pac. 521 ].) At page 479 [196 Cal.] in the case of Dominguez Land Corp. v. Daugherty, supra, the court says: “ . . . even those assets to which the so-called trust-fund doctrine is applicable arc not charged with any enforceable trust or with any equitable lien on behalf of any general creditor of the corporation, if it be a solvent, going concern; and that such creditors have no vested right of any nature whatever in o

1935R. 437]; Fornaseri v. Cosmosart Realty etc. Corp., 96 Cal. App. 549 [ 274 Pac. 597 ]; Delaney Producing & Refining Co. v. Crystal Petroleum Products Co., 88 Cal. App. 784 [ 264 Pac. 521 ].) At page 479 [196 Cal.] in the case of Dominguez Land Corp. v. Daugherty, supra, the court says: “ . . . even those assets to which the so-called trust-fund doctrine is applicable arc not charged with any enforceable trust or with any equitable lien on behalf of any general creditor of the corporation, if it be a solvent, going concern; and that such creditors have no vested right of any nature whatever in o

1925(McDonald v. Williams, *480 174 U. S. 397 [ 43 L.

1925(McDonald v. Williams, *480 174 U. S. 397 [ 43 L.

1925R. 437, 194 Pac. 11 ], where it is held that fraud, and not the idea of a ‘trust,’ in any proper sense of that word, is the true basis of the so-called trust-fund doctrine.

1920(See Vermont etc. Co. v. Declez etc. Co., 135 Cal. 579, 583 , [ 87 Am.

1920Thus it is said in Harrison *378 v. Armour, 169 Cal. 787, 790 , [ 147 Pac. 1166 ]: “In such cases the rule is that where the corporation and stockholder have agreed upon a given valuation for the property transferred, such valuation is binding and conclusive unless it is fraudulent in purpose or effect.

1920Thus it is said in Harrison *378 v. Armour, 169 Cal. 787, 790 , [ 147 Pac. 1166 ]: “In such cases the rule is that where the corporation and stockholder have agreed upon a given valuation for the property transferred, such valuation is binding and conclusive unless it is fraudulent in purpose or effect.