Senate Bill 1089, effective October 1, 2021, amends the business corporation law regarding shareholder liability. (See Sec. 39)
Senate Bill 1100, effective July 13, 2021, amends the LLC law regarding Annual Report filing fees. (See Section 5)
Senate Bill 986, effective June 14, 2021, amends (i) the business corporation law regarding remote shareholder meetings, shareholder lists and bylaws; and (ii) the nonprofit corporation law regarding remote member meetings, member action without a meeting, member lists and bylaws.
Executive Order No. 7NN, effective May 13, 2020, authorizes remote member meetings of nonprofit corporations during the coronavirus-related public health and civil preparedness emergency.
Executive Order No. 71, (see Item 11) effective March 21, 2020, modifies a section of the Business Corporation Act suspending in-person shareholder meeting requirements and authorizing the directors to determine that any shareholder meetings be held solely by means of remote communication and not at any place, under certain conditions.
In re Brainard, 2022 Bankr. LEXIS 2232, decided August 12, 2022. The U.S. Bankruptcy Court, District of Connecticut, held that the plaintiff law firm did not have a perfected security interest in the collateral described in its UCC-1 as a distribution from a pension plan to the alleged debtor, a former client. The court noted that when a creditor presents a UCC-1 to establish a valid and enforceable security interest, there must be some further documentation corroborative of the debtor's intent to pledge collateral. Here there was a lack of evidence that the former client authorized the filing of the UCC-1 identifying the pension funds as collateral. Therefore, no security agreement was created. Furthermore, even if the court had concluded a security interest attached, it was unperfected. At the time of the UCC-1 filing, the collateral as described no longer existed, the funds had already been distributed, transferred to two different financial institutions, and, in part, spent.
Notice of Meeting
Levco Tech, Inc. v. Kelly, 214 Conn. App. 257, decided August 2, 2022. The Connecticut Appeals Court upheld the trial court’s determination that a board of directors’ meeting was invalid due to insufficient notice of the meeting. The meeting was held on 25 minutes notice and apparently was intended to prevent several directors from attending. Given the circumstances, the notice was insufficient under the corporation’s bylaws.
Majority Shareholder’s Fiduciary Duty
Falcigno v. Falcigno, AC 42047, decided August 25, 2020. The Connecticut Appellate Court affirmed the trial court’s ruling that a majority stockholder did not breach his fiduciary duties by buying the minority stockholder’s shares before selling the company where his desire to sell the company was known, there were no pending offers, an alleged misrepresentation did not affect the minority stockholder’s decision to sell and the majority stockholder accurately explained the minority discount.
Statute of Limitations
Reclaimant Corp. v. Deutsch, 332 Conn. 590, decided August 6, 2019. The Connecticut Supreme Court ruled that an unjust enrichment claim arising out of the limited partnership agreement of a Delaware LP was subject to Connecticut’s statute of limitations and not the statute of limitations in Delaware’s limited partnership act.