Tousley Brain Stephens was recently retained on a late Friday afternoon by a temporarily-inactive corporation and its officers, who had just learned of a corporate raider’s imminent attempt to seize ownership and control of the corporation. Unbeknownst to the officers, the raider, who had recently purchased a small number of shares in the company, had obtained a default judgment, had himself appointed as interim custodian, and issued to himself a controlling number of shares in the corporation. Early Monday morning, Tousley Brain Stephens petitioned for, and obtained, a Temporary Restraining Order against the shareholder, enjoining a scheduled proxy vote, in which the shareholder would have elected himself as permanent director. Less than two weeks later, the superior court set aside the default judgment, removed the shareholder as custodian, rescinded his self-issuance of shares, and enabled the corporation to litigate the action against the shareholder on the merits.
