Can someone please help me with a business law question? just people w/ law background?

Question

John Reese has brought suit against the board of directors of Ace Inc., a company in which he owns a stock. John has information that the directors voted on issues affecting the company when they stood to benefit from the positive votes. How could John find out how the directors voted and what contracts were entered into as a result? What steps in the litigation process will allow him to find out this information?

Answer 1

One of the early steps in the litigation process is something called discovery. During discovery, Reese will be entitled to demand documents from the company, including minutes of the meetings of the board of directors, and to take depositions, which are oral testimony under oath, from the directors. In some states, the discovery process can be extended to cover the other parties with which Ace contracted.

The documents will show the decisions that were taken by the board and the contracts issued. By questioning the directors and the third parties about their relationships, Reese should be able to determine who voted for what and why.

Answer 2

The first part of your question has to do with how JR could get info on the votes and contracts entered into. As a shareholder JR has a legal right to review all corporate records. The laws of whatever state a corporation is incorporated in generally require Boards of Directors to take and keep on file, records of their votes and their actions (Minutes). This is how JR had access to and found out about the votes/contracts. This process took place before litigation actually began as this is his claim in the suit filed.

As to how will he continue to gather info during litigation, the "discovery" process involves requests for documents, interviews, requests for e-mails, and just about anything the parties can argue they have a right to see in order to prove their case.

Answer 3

Several things going on.

First, directors have a duty of disclosure, and must record their votes in the corporate board minutes. As a shareholder, he should have access to those minutes if he has a legitimate reason.

He can either file a request with the board directly for disclosure, or sue the company and demand the records during the discovery process.

Answer 4

It is called the discovery phase of the litigation.

Once the preliminary stages are completed, (i.e. the company is properly served with the lawsuit, and the issue is joined), then the plaintiff and defendant both have a right to engage in discovery. Discovery includes (but isn't limited to) deposition, interrogatories, requests for production of documents, etc. It is in this stage of the proceedings that this information can be requested.

NOTE: I am NOT saying that it will be, or even that a court will order it to be produced, but that is the stage of the litigation.

Answer 5

i dont know