derivative action claim in California

2020(Patrick v. Alacer Corp., supra, 167 Cal.App.4th at p. 1004 .) “ ‘The corporation has traditionally been aligned as a defendant because it is in conflict with its stockholder over the advisability of bringing suit....’ [Citation.] In a real sense, the only claim a shareholder plaintiff asserts against the nominal defendant corporation in a derivative action is the claim the corporation has failed to pursue the litigation.” (Ibid.) “[A] nominal defendant corporation generally may not defend a derivative action filed on its behalf.” (Id. at p. 1005.) While the corporation may assert defenses con

2015In a real sense, the only claim a shareholder plaintiff asserts against the nominal defendant 8 corporation in a derivative action is the claim the corporation has failed to pursue the litigation.” ( Patrick, supra, 167 Cal.App.4th at pp. 1003-1004, fn. omitted.) “‘[T]he general rule for corporate participation in a derivative action is that “[u]nless the derivative action threatens rather than advances corporate interests, [the corporation] cannot participate in the defense on the merits.”’ [Citation.] ‘Because the claims asserted and the relief sought in [the derivative] complaint would, if

2021However, the law demands certain prerequisites to bringing a derivative action which have not been alleged or proven in this case, such as alleging ‘in the complaint with particularity[, the] plaintiff’s efforts to secure from the board such action as plaintiff desires, or the reasons for not making such effort, and . . . further that plaintiff has either informed the corporation or the board in writing of the ultimate facts of each cause of action against each defendant or delivered to the corporation or the board a true copy of the complaint which plaintiff proposes to file.’” (Nelson, supra

2021(See Nelson, supra, 72 Cal.App.4th at p. 127 .) To allow Leonard to maintain his cause of action for breach of fiduciary duty as an individual action would essentially eliminate the derivative action rule in the context of close corporations and other closely held entities.

2024California law does not support that result.” (Ibid.) We therefore reject Appellants’ final argument. 4 Another policy justification for derivative actions is to prevent “the risk of double recovery—once to the shareholder and once to the corporation.” (Vinci v. Waste Management, Inc. (1995) 36 Cal.App.4th 1811, 1815 .) 14 IV.

2020(Rankin v. Frebank Co. (1975) 47 Cal.App.3d 75, 92 ; Friedman, Cal. Practice Guide: Corporations, supra, ¶¶ 6:599, 6:601 [an action to compel dissolution is a direct, not a derivative, shareholder action].) Thus, the corporation is a proper defendant who can defend itself against dissolution.

2015Proc., § 382.) So 'although the corporation is made a defendant in a derivative suit, the corporation nevertheless is the real plaintiff . . . .' " (Patrick v. Alacer Corp. (2008) 167 Cal.App.4th 995, 1004 , fn. omitted (Patrick).) 8 Because a derivative action is filed on behalf of a corporation and not against it, the corporation is only a "nominal defendant." (Patrick, supra, 167 Cal.App.4th at p. 1004 ; Grosset, supra, 42 Cal.4th at p. 1108 .) "The only reason the corporation is named a nominal defendant is its refusal to join the action as a plaintiff." (Patrick, at p. 1004.) "In a real s

2015Proc., § 382.) So 'although the corporation is made a defendant in a derivative suit, the corporation nevertheless is the real plaintiff . . . .' " (Patrick v. Alacer Corp. (2008) 167 Cal.App.4th 995, 1004 , fn. omitted (Patrick).) 8 Because a derivative action is filed on behalf of a corporation and not against it, the corporation is only a "nominal defendant." (Patrick, supra, 167 Cal.App.4th at p. 1004 ; Grosset, supra, 42 Cal.4th at p. 1108 .) "The only reason the corporation is named a nominal defendant is its refusal to join the action as a plaintiff." (Patrick, at p. 1004.) "In a real s