Bhakta

BACKGROUND

A. The Present Action

In September 2016, Ajesh, Savita, Arjun, and Parul Bhakta (collectively,

plaintiffs) filed a lawsuit against Jayashree Krishna, Inc. (JSK) and Dharmendra, Anjali,

2 Minesh, Mukundbhai, and Sudhaben Bhakta (collectively, defendants). The following

facts are taken from the complaint.

JSK was incorporated in 2005. Plaintiffs collectively invested one million dollars

in the company in exchange for a 50 percent shareholder interest. JSK’s remaining

percent shareholder interest belonged to defendants Mukundbhai and Sudhaben, who also

had invested one million dollars in the company.

JSK’s purpose was to purchase and operate a particular motel in San Bernardino,

California. JSK purchased the motel in 2006. Defendants handled the day-to-day

operations of the motel without any assistance from plaintiffs. In addition to operating

the motel, defendants controlled JSK. In 2012, defendants asked plaintiffs to invest

additional capital into JSK, but plaintiffs refused.

Plaintiffs were never given a shareholder agreement or provided notice of any

meetings of the shareholders or the board of directors. Plaintiffs never received…