Loan Forgiveness Can't Satisfy Judgment, Calif. Court Says

Law360, New York (September 3, 2013, 7:11 PM EDT) -- A California appeals court ruled Friday that forgiving a “probably worthless” loan cannot satisfy a judgment in a shareholder derivative suit, ordering a laundry service director to find another way to compensate a co-owner for a breach of fiduciary duty.

The California Court of Appeal ordered Royal Airline Linen Inc. director Norman Magidow, who owns a 50 percent share of the laundry service, to pay $226,000 in compensatory damages and an additional $226,000 in punitive damages to Kathleen Cunningham, who owns the other half of the...
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