INTERNAL AFFAIRS, INCORPORATION & ULTRA VIRES/WASTE Prof David K. Linnan LAWS #600 August 27, 2007
INTERNAL AFFAIRS I BASIS OF THE DOCTRINE Choice of law versus constitutional aspects Differing policies & tests? Difference between regulating corporation’s external business in state versus “internal affairs”? “Doing business” tests versus?
INTERNAL AFFAIRS II THREE CASES 1. McDermott v. Altman (Del) [subsidiary ownership & voting of parent shares 2. Wilson v Louisiana Pacific (CA) [pseudo or quasi-foreign corporation provisions, CA & NY particularly] [3. Vantagepoint Venture Ptrs v. Examen 871 A.2d 1108 (Del 2005)(on CA quasi- foreign corp)]
ULTRA VIRES COMMON LAW VS MODERN CORP STATUTES Traditionally, contracts were void for lack of capacity under common law What are the new statutory rules & why?
UV & WASTE WASTE ARGUMENTS TYPICALLY PERMITTED ACTIVITY BUT DISPROPORTIONATE, LIKE ULTRA VIRES 1. 711 Kings Highway (modern uv statute) 2. Sullivan v Hammer (Oxy & waste)
INCORPORATION To the forms vs statutes