An attorney may competently testify as an expert witness on a seemingly pure legal question if the testimony involves the intersection of corporate articles or by-laws, on the one hand, and the Corporations Code on the other hand. I recently testified in a bifurcated trial, where the judge decided the first half and then the second half was reserved for a jury decision. The bifurcated issue required the trial judge to form a complex understanding of a corporation’s by-laws as compared to the Corporations Code. Luckily, I brought my Corporations Code book with me to the witness stand.
Was the board of directors meeting properly noticed? The by-laws and the Code supported my opinion—yes, the meeting (which plaintiff skipped) was correctly noticed and could properly be conducted with the remaining directors present and voting. I concluded that the director who called the meeting was permitted to delegate responsibility for sending meeting notification by email to her assistant who was not a corporate director.
Electronic notice of a directors or shareholder meeting is proper under some by-laws. If not specified in the by-laws, the Corporations Code permits notice by electronic transmission by the corporation. [Corp. C. §§ 307(a)(2); 601(b)]
Was the meeting properly suspended and reconvened the next day? The by-laws can limit the body’s ability to suspend and reconvene. If the by-laws do not set any limit, the Corporations Code permits it.
Was the vote count correct? The absent director claimed he actually held a double vote, so his absence cancelled the remaining directors’ power to take action. My opinion— no, the director did not have a double vote and no, the absent director did not destroy the quorum at the meeting he skipped.
The court was appreciative of my two-hour seminar on corporations law, and I was even nice enough to loan my code book to opposing counsel during my testimony. After forty (40) years teaching and practicing corporations and business association law—counseling many LLCs on whether to incorporate or form as an LLC—I have seen just about every type of partnership, LLC and corporation dispute there is. The Code is like a bible when it comes to meeting compliance.
By: Roy Schneider, Esq.
Roy Schneider recently testified as an expert witness in a shareholder dispute trial on issues of shareholder and director voting, meeting notices, and the process for removal of a director. Roy has almost 40 years of experience as a corporate attorney and is available to serve as an expert witness in corporate disputes and to assist litigators preparing for trial. Roy regularly speaks before business and community groups about corporate compliance. Roy is also an Adjunct Professor of Business Law at California Lutheran University in Thousand Oaks.
Please contact our office at 805-764-6370 regarding Roy’s availability.