Howden-Goetzl

Petitioners seek a writ of mandate to compel respondent court to set aside its order expunging a notice of lis pendens or to increase the amount of the undertaking from $10,000 to $670,000.

Petitioners are plaintiffs in a shareholders’ derivative action on behalf of Educational Securities Corporation (ESC), attacking a refinancing transaction and foreclosure proceeding whereby the defendants (real parties herein) obtained title to ESC’s major asset, a proprietary hospital.

Under the refinancing transaction, real party Western Urban Redevelopment Corporation and High-Far Corporation purchased 416,000 shares of ESC’s $1 par value stock for one cent per share, taking control of ESC. Western and High-Far also loaned ESC $160,000, taking promissory notes secured by second deeds of trust. The plan was approved by the Corporations Commissioner.

Despite the refinancing transaction the hospital continued in financial difficulty. Additional sums were loaned to ESC by Western Urban and High-Far. A default occurred' under the first deed of trust; Western Urban cured the default and purchased the property at a trustee’s sale under the second deed of trust. The bid was $232,754.86,…