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DRAFT FOR ATTORNEY REVIEW — NOT FINAL

Findley v. Garrett, 109 Cal. App. 2d 166 (1952)

Citation
Findley v. Garrett, 109 Cal. App. 2d 166 (1952)
Parent Document
Findley v. Garrett, 109 Cal. App. 2d 166 (1952)
Jurisdiction
California (state)
Effective Date
1952-02-08

Other Sections in This Document (69)

Full Text

1,176 chars
Appellants (plaintiffs) contend, however, that the directors of Douglas in refusing to sue did not act in good faith, that the transactions complained of involved divided loyalty, breach of trust, fraud, and fraudulent concealment by corporation fiduciaries; that such matters are not within the discretionary powers of the board of directors; and that the board may not ratify a fraud. The allegations of the amended complaint, with respect to the directors or officers of Douglas who did not own stock in Garrett, are that each person who became a director or officer of Douglas after 1936 did so with full knowledge of the conspiracy and thereafter participated in the acts committed pursuant thereto; that continuously from 1936 to date all the directors of Douglas “became active participants” in said alleged acts of conspiracy of said organizers of Garrett and “knowingly shielded” and “actively concealed” said acts from the stockholders of Douglas by “affirmative representations” which were “fraudulent concealments” of material facts accomplished by omissions and by statements of partial truths; and that the present directors refused in bad faith to seek redress.