In Norman v. Strateman, No. A170356, 2025 WL 1802786 (Cal. App., 1st Dist., June 20, 2025), the California Court of Appeal held that a settlement of derivative claims reached among all shareholders of a close corporation was not enforceable because the settlement was not vetted by the trial court through a formal settlement approval process. This ruling confirms that the procedural requirements for derivative litigation must followed even for closely held companies where all shareholders are also individual parties to the litigation.Continue Reading California Court of Appeal Holds That Derivative Litigation Settlement Procedural Rules Apply Even In Intra-Shareholder Suits in Closely Held Companies
