Right to Appeal Judgment Against Corporation Lies with Corporation, Not Individual Shareholders
In The Matter of: J-Bar Corp. v. Parrish, the Court of Appeals recently underscored the general rule that shareholders may not personally appeal a judgment against the corporation by which they are only indirectly affected. The case involved two sets of business partners who came together to form “J-Bar Corporation,” but who later moved for its dissolution after finding themselves at odds over a number of routine business decisions. Upon motion by the parties, the trial court ordered a sale of the company’s assets. On appeal, one of the parties disuputed the trial court’s decision to grant the other party pre-judgment interest on a debt owed to that party by J-Bar. The Court of Appeals held that this issue could not be challenged by the individual shareholder since the judgment to pay the debt, including pre-judgment interest, was against J-Bar. The Court stated that the responsibility of determining whether a corporation should pursue legal action lies with the corporation itself and not with the individual shareholder.
Read the entire opinion here.