February 16, 2020

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What To Do When A Director Goes Missing

I haven't actually encountered a case in which a corporation simply can't find a member of its board of directors.  If such a situation should arise, however, the California General Corporation Law has an answer in Section 2003.  That statute authorizes "any interested person" to petition the Superior Court of the "proper county".  

The statute is also available when:

  • The directors' identity is in doubt;
  • The directors' right to hold office is in doubt;
  • When the directors' are dead;
  • When the directors are unable to act,:
  • When the directors fail to act; or
  • When the directors refuse to act.

Problematically, the remedies expressed in the statute do not cover all of these situations.  Rather, the statute only expressly authorizes a court to determine the identity of the directors, or, if there are not directors to appoint directors to wind up the affairs of the corporation.  When a director is lost, the statute provides no clue as to what the court may do to remedy the situation.

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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm

Keith Paul Bishop is a partner in Allen Matkins' Corporate and Securities practice group, and works out of the Orange County office. He represents clients in a wide range of corporate transactions, including public and private securities offerings of debt and equity, mergers and acquisitions, proxy contests and tender offers, corporate governance matters and federal and state securities laws (including the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act), investment adviser, financial services regulation, and California administrative law. He regularly advises clients...