Director Retains Standing to Sue Even After Removal from Board
California Court refuses to find plaintiff has requirement for “continuous directorship” to sue for breach of fiduciary duty
A California appellate court has reversed a trial court decision that a director of a public benefit nonprofit lost her standing to sue the organization and another director for self-dealing and breach of fiduciary duty when she was removed from the board following initiation of her suit. In what is apparently a case of first impression in the state, the Court said that a close reading of the Corporations Code and the needs of public policy justified its ruling that the plaintiff could continue to lead the case. Margaret Summers sued Wildlife Waystation and Martine Colette, alleging self-dealing and other misconduct by Colette. The defendants moved to dismiss the complaint on be ground that...
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