Corporate directors may be the overlords of the companies whose boards they sit on, but they don’t have the power to control the venue for derivative suits against them, according to a decision Monday in a San Francisco federal court shareholder suit against Oracle Corp.’s directors.
Judge Richard Seeborg’s ruling, which addresses a question of first impression, is a big blow for Oracle, which had invoked a forum-selection provision in its bylaws in moving to dismiss two derivative suits involving allegations that Oracle fraudulently bilked the government out of millions of dollars by overcharging for software and licenses.
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