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Gardner Ex Rel. V. Eighth Judicial Dist. Court, 133 Nev. Adv. Op. 89 (Nov. 22, 2017), Will Carter
Gardner Ex Rel. V. Eighth Judicial Dist. Court, 133 Nev. Adv. Op. 89 (Nov. 22, 2017), Will Carter
Nevada Supreme Court Summaries
The alter ego doctrine applies to LLCs and corporations, such that creditors may reach manager’s assets. The Court held that an LLC does not protect a manager or member from their own individual acts of negligence. Therefore, the Court directed the district court to vacate because, “the varieties of fraud and injustice that the alter ego doctrine was designed to redress can be equally exploited through limited liability companies.”
In Re Dish Network Derivation Litig., 133 Nev. Adv. Op. 61 (Sept. 14, 2017), Joseph K. Fabbi
In Re Dish Network Derivation Litig., 133 Nev. Adv. Op. 61 (Sept. 14, 2017), Joseph K. Fabbi
Nevada Supreme Court Summaries
The Court determined that the Auerbach test should be applied when a Special Litigation Committee (SLC) files a motion to defer a derivative claim. A derivative claim is dismissible if the SLC was independent and conducted a good faith investigation when it concluded litigation would not be in the company’s best interest.
Parametric Sound Corp. V. Dist. Ct., 133 Nev. Adv. Op. 59 (Sep. 14, 2017), Lucy Crow
Parametric Sound Corp. V. Dist. Ct., 133 Nev. Adv. Op. 59 (Sep. 14, 2017), Lucy Crow
Nevada Supreme Court Summaries
The Court clarified its holding in Cohen v. Mirage Resorts, Inc. by adopting the Delaware direct harm test to determine whether a shareholder’s claim is direct or derivative. Under the direct harm test, the Court asks (1) who suffered alleged harm, and (2) who would receive benefit from recovery or another remedy? If the shareholder cannot establish a claim without showing injury to the corporation, the shareholder’s claim fails.
Gardner V. Henderson Water Park, L.L.C., 133 Nev. Ad. Op. 54 (Aug. 3, 2017), Scott Cardenas
Gardner V. Henderson Water Park, L.L.C., 133 Nev. Ad. Op. 54 (Aug. 3, 2017), Scott Cardenas
Nevada Supreme Court Summaries
Under NRS 86.371 and NRS 86.381, an LLC member is not responsible for the LLC’s liabilities solely because it is a member.