Is a derivative action against a closely held corporation enforceable?
MultiRegion, United States of America
The following excerpt is from Hammett v. Sherman, Case No.: 19-CV-605 JLS (AHG) (S.D. Cal. 2020):
Plaintiff responds that the policy considerations favoring derivative actions "do[] not apply to cases involving closely-held corporations." ECF No. 73-1 at 9 (citing Jara v. Suprema Meats, Inc., 121 Cal. App. 4th 1238, 1259 (2004)). Plaintiff also contends that her failure "to receive the distributions she was entitled to makes her a creditor under Corporations Code 17250." See id. at 11 (emphasis in original).
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