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Case Citations [1] (Fall 2024)

handle is hein.ali/alicgv0102 and id is 1 raw text is: THE AMERICAN LAW INSTITUTE Fall 2024 Citations PRINCIPLES OF CORPORATE GOVERNANCE: ANALYSIS AND RECOMMENDATIONS PART VII. REMEDIES CHAPTER 1. THE DERIVATIVE ACTION Pa.Cmwlth. Cit. in case cit. in disc. §§ 7.02-7.10, which constitutes much of Part VII, Ch. 1. Member of a homeowners association that was under receivership filed a derivative action on behalf of association against another member, alleging that defendant intentionally interfered with association's business relationship with its insurer. After the receiver recommended that the action be dismissed on the ground that it was not in the association's best interest, the trial court dismissed the complaint. This court affirmed, holding that the trial court did not err in deferring to the receiver's recommendation under the business-judgment rule. The court relied in part on a Pennsylvania Supreme Court decision that outlined the factors to be considered when evaluating a board's decision to terminate a shareholder- derivative action and, in so doing, expressly adopted §§ 7.02-7.10 and 7.13 of the Principles of Corporate Governance, which set forth the requirements for shareholder-derivative actions. Serota on behalf of London Towne Homeowners Association v. Mager, 304 A.3d 828, 841. § 7.07 Dismissal of a Derivative Action Based on a Motion Requesting Dismissal by the Board or a Committee: General Statement Pa.Cmwlth. Subsec. (a)(1) quot. in sup. Member of a homeowners association that was under receivership filed a derivative action on behalf of association against another member, alleging that defendant intentionally interfered with association's business relationship with its insurer. After the receiver recommended that the action be dismissed on the ground that it was not in the association's best interest, the trial court dismissed the complaint. This court affirmed, holding that the trial court did not err in deferring to the receiver's recommendation under the business-judgment rule, because the receiver was an independent and disinterested party who performed an adequate investigation into the circumstances and rationally believed his decision was in the association's best interests. The court explained that, under Principles of Corporate Governance § 7.07, the business-judgment rule also applied to decisions made by the receiver, who was acting on behalf of the association's board. Serota on behalf of London Towne Homeowners Association v. Mager, 304 A.3d 828, 841. COPYRIGHT (02024 By THE AMERICAN LAW INSTITUTE All rights reserved Printed in the United States of America For earlier citations, see the Appendices, Supplements, or Pocket Parts, if any, that correspond to the subject matter under examination.