Wednesday, June 14, 2017 1:38:19 PM
Under federal law at least, the federal diversity jurisdiction statute provides that a corporation is a citizen of both (1) the state where it is incorporated, and (2) “the State where it has its principal place of business.”
A number of years ago, the Supreme Court held in Hertz Corp. v. Friend that the phrase “principal place of business” means the corporation’s “nerve center,” or “the place where the corporation’s high level officers direct, control, and coordinate the corporation’s activities,” thereby taking the state-by-state analysis of a corporation’s business activities out of the equation. The Court added that a corporation’s “nerve center” typically will be the corporation’s headquarters.
Now here's an interesting blurb about D.C. Circuit case from last year:
Now reverse that fact pattern and replace "Maryland" with "Nevada" -- i.e., a NV corporation whose sole officer with all the authority lives in Texas and runs the business from there.
Another blurb about a case last year:
I don't think you would have a problem showing that DKTS is "at home" in Texas, rather than Nevada.
So basically, a Texas court would probably have the same level of jurisdiction over the corporation and its assets as a Nevada court. Again I don't think that means the court itself could force a sale of the shell "residing" in another state, but it could probably appoint a receiver that could then agree to a sale of the shell regardless of what state it's incorporated in.
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