Business Law Power Point Presentation about ultra vires and derivative action. Daggett Industries wanted to go into a new line of business but would some of the stockholders object?

2. Cosmetic Skin Care Industry
2011 = $100,000,000,000 in
profits
1% = $1,000,000,000 of
profits

3. Objection by some shareholders
Derivative action
Ultra Vires

5. Ultra vires is Latin for “beyond the powers of.”

7. Derivative action
Ultra Vires
NCGS § 55-2-02(b)(2)(2001)

8. Deviation: a change from a customary
or agreed upon course of action.

9. NOMINAL
“In name only.”

10. …unless where a stockholder alleges
demand upon and refusal by the
corporation to institute the action to
redress the wrong.
Baker v. Data Dynamics Inc.,
561 F. Supp. 1161 (1983)

11. Norman v. Nash Johnson and Sons’ Farms, Inc.,
537 S.E. 248, (2000)

12. WHO SUFFERED THE ALLEGED HARM?
The corporation The stockholder
Cabaniss v. Deutsche Bank Securities,
611 S.E. 2d 878 (2005)

13. Aubin v. Susi, 560 S.E. 2d 875 (2002);
Outen v. Mical, 454 S.E. 2d 883 (1995)

14. …discontinuance, compromise, or
settlement of action.
Alford v. Shaw, 358 S.E. 2d 323 (1987)

15. Brinson v. Mills Supply Co., 14 S.E. 2d 505 (1941)

16. Lee v. Wake County, 598 S.E. 2d 427 (2004)
Victor v. Chadwick Mfg. Co., 61 S.E. 653 (1908)

18. Snow Hill Banking & Trust Co. v. D.J. Odom Drug Co.,
125 S.E. 394 (1924)
Kerr v. Hicks, 70 S.E. 486 (1911)

19. NO!

20. North Carolina Attorney General Roy A. Cooper
NCGS § 55-14-30

21. In conclusion…
Inform the stockholder to get the majority to
amend the articles of incorporation to broaden
Daggett Industries’ purpose.
NCGS 55-10-03