179 F.3d 767 (9th Cir. 1999), 98-16197, Kona Enters., Inc. v. Estate of Bishop
|Citation:||179 F.3d 767|
|Opinion Judge:||FARRIS, Circuit Judge:|
|Party Name:||KONA ENTERPRISES, INC., individually and derivatively on behalf of Hanford's, Inc., Nationwide Industries, Inc., Plaintiff-Appellant, and BALANCED VALUE FUND; TACH ONE, on behalf of MONTROSE NATIONWIDE LIMITED PARTNERSHIP; WAYNE M. ROGERS; JACK M. GERTINO, Plaintiffs, v. ESTATE OF BERNICE PAUAHI BISHOP, by and through its trustees, Henry H. Peters,|
|Attorney:||Russell S. Walker, Woodbury & Kesler, Salt Lake City, Utah, for the plaintiff-appellant. David Schulmeister, C. Michael Hare, Cades Schutte Fleming & Wright, Honolulu, Hawaii, for the defendants-appellees.|
|Judge Panel:||Before: Jerome Farris, John T. Noonan and Susan P. Graber, Circuit Judges.|
|Case Date:||June 04, 1999|
|Court:||United States Courts of Appeals, Court of Appeals for the Ninth Circuit|
Argued and Submitted April 27, 1999, Honolulu, Hawaii
On Appeal from the United States District Court for the District of Hawaii. D.C. No. CV-94-00858-DAE. David A. Ezra, District Judge, Presiding.
Kona Enterprises was used as a vehicle for several investors, including Defendants, to gain control of Hanford's, Inc., a seasonal decorations company, and Nationwide, an automobile products manufacturer. We refer to Hanford's and Nationwide collectively as the " Companies." The Bishop Estate provided several letters of credit to avoid foreclosure by the Companies' creditor. After allegedly rejecting alternative financing arrangements, the Bishop Estate bought the Companies' loans. It eventually foreclosed when the loans went unpaid, taking all of the stock and assets of the Companies under the stock pledge agreement.
Kona and its other shareholders 1 sued Defendants, alleging breaches of fiduciary duties as well as breaches of the covenant of good faith and fair dealing. Kona also alleged interference with corporate opportunity and corporate governance. 2 The district court held that Kona had not asserted any direct claims against Defendants and that it lacked standing to pursue any derivative claims.
Kona asserts two arguments in this appeal: (1) that the district court erroneously held that it had not asserted a direct
claim for damages against Defendants, and (2) that to the extent it is required to pursue...
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