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Fund attorney can’t represent minority shareholders without consent

Fund attorney can’t represent minority shareholders without consent

Fund attorney can’t represent minority shareholders without consent

A Court of Appeal in California has affirmed the disqualification of a lawyer for a subsidiary of a nonprofit mutual benefit corporation who sought to represent minority shareholders in a dispute over control over the organization without getting the consent of the subsidiary. The Wong Family Benevolent Association in Los Angeles wholly controlled the Wong Family Investment Fund, which managed real estate owned by the Association. In 2010, a dispute arose over the selection of directors for the Fund. The Fund’s board retained attorney Albert Lum as corporate counsel on November 20, 2010. On December 27, Lum filed suit on behalf of five minority shareholders of the association for breach of...

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