Justia Nevada Supreme Court Opinion Summaries

The case involves Capital Advisors, LLC, and Danzig, Ltd., minority shareholders of Cam Group, Inc. (CAMG), who filed a shareholder derivative action against nine CAMG officers and directors. The defendants included Wei Heng Cai (Ricky) and Wei Xuan Luo (Tracy), who were the only ones to proceed to trial. The plaintiffs alleged that Ricky arranged for a $1.85 million unsecured loan at zero-percent interest to a company called Parko Ltd., and Tracy, as CFO, failed to stop the loan. The loan allegedly drained approximately 80% of the cash reserves for the consolidated CAM companies. Ricky later resigned from CAMG to focus on developing business opportunities for another company, National Agricultural Holdings Limited (NAHL), and his own company, Precursor Management Inc. (PMI).The district court granted a motion for judgment as a matter of law in favor of Ricky and Tracy, dismissing all causes of action. The court found that officers and directors of a parent company cannot be held liable for actions taken by a wholly owned subsidiary without piercing the corporate veil. The court also awarded Ricky and Tracy over $2 million in attorney fees and costs.The Supreme Court of Nevada affirmed in part, reversed in part, vacated in part, and remanded the case for further proceedings. The court held that officers and directors of a parent company who allow a wholly owned subsidiary to take action adverse to the parent can be held liable without use of the alter ego doctrine. The court also held that shareholders may file derivative suits against officers and directors of a parent company based on wrongful actions that occurred at a wholly owned subsidiary of a wholly owned subsidiary without asserting alter ego. The court concluded that the district court erred by finding that officers and directors of a parent company cannot be held liable for actions taken by a wholly owned subsidiary without piercing the corporate veil. The court also found that the plaintiffs presented sufficient evidence to defeat a motion for judgment as a matter of law as to some of their causes of action. View "CAPITAL ADVISORS, LLC VS. CAI" on Justia Law

Appellants Consipio Holding, BV; Ilan Bunimovitz; Tisbury Services, Inc.; and Claudio Gianascio (collectively, Consipio) are shareholders of Private Media Group, Inc. (PRVT). In August 2010, Consipio filed a complaint in the Nevada district court, seeking injunctive relief and the appointment of a receiver for PRVT. Consipio also asserted derivative claims on behalf of PRVT against PRVT's former CEO and president, Berth H. Milton, Jr., and against officer and director respondents Johan Carlberg (PRVT director), Peter Dixinger (PRVT director), Bo Rodebrant (PRVT director), Johan Gillborg (former PRVT CFO), and Philip Christmas (PRVT subsidiary CFO). The claims focused on respondents' alleged conduct in assisting Milton, Jr., to financially harm PRVT for their personal gain. The complaint alleged that respondents assisted Milton, Jr., in obtaining significant loans for himself and entities he controls. It further stated that respondents failed to demand repayment on these loans and that they helped Milton, Jr. by removing funds from PRVT and concealing the wrongdoing. Given these allegations, Consipio contended that respondents collectively were guilty of misfeasance, malfeasance, and breach of their fiduciary duties. The issue before the Supreme Court was whether Nevada courts could properly exercise personal jurisdiction over nonresident officers and directors who directly harm a Nevada corporation. The Court concluded that they can. In this case, the district court failed to conduct adequate factual analysis to determine whether it could properly exercise personal jurisdiction over the respondents before dismissing the complaint against them. Accordingly, the Supreme Court vacated the dismissal order and remanded this case to the district court for further proceedings. View "Consipio Holding, BV v. Carlberg" on Justia Law

The Shoen family controls AMERCO. AMERCO engaged in numerous business transactions with SAC entities, which are real estate holding companies controlled by AMERCO shareholder and executive Mark Shoen. Based on several of those transactions, Appellants-Shareholders filed an underlying shareholder derivative lawsuit against AMERCOâs former and current directors and the SAC entities, primarily for breach of fiduciary duty. However, appellants failed to make a demand for corrective action on AMERCOâs board of directors. Subsequently, AMERCO moved to dismiss the lawsuit. Appellants appealed, and the Supreme Court reversed that decision and remanded the case for further proceedings. On remand, the district court again granted AMERCOâs motion to dismiss, this time because of a settlement agreement that dated back to 1995 in which shareholders agreed not to bring shareholder derivative lawsuits against AMERCO. Appellants sought the Supreme Courtâs review of the district courtâs second dismissal of their case. They asked whether the settlement bars their present lawsuit against AMERCO. The Supreme Court found that the settlement does not bar Appellantsâ case. The Court again reversed the district courtâs decision, and remanded the case for further proceedings.