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californiacorporate&securities 1/12/2018
The CFLL Is Dead; Long Live The CFL!

In a change that escaped my notice, the legislature has seen fit to rename the venerable California Finance Lenders Law as the California Financing Law.  This legislation, Stats. 2017, ch. 475 (AB 1284 (Dababneh)), was enacted as urgency legislation that took effect on October 4, 2017.  The main purpose of the legislation was not renaming the law but providing for licensing and regulation by the Department of Business Oversight of Property Assessed Clean Energy (PACE) program administrators.  In general, the PACE program provides up-front financing to property owners for the installation of renewable energy sources or energy efficiency improvements that are permanently fixed to their properties.  These financings are repaid through the owners' property tax bills.

 
californiacorporate&securities 1/11/2018
Bill Would Restrain Online Disclosures By The Secretary Of State

California's legislature reconvened last week for the second year of its biennium.  Assemblyman Marc Steinorth began the session by introducing a bill requiring the Secretary of State to exclude certain personal information that is provided online.  

 
californiacorporate&securities 1/10/2018
Court Punishes Company For Statement Of Belief

Thomas Carlyle famously called economics, the "dismal science".  Sometimes, the law can be equally disheartening.  Imagine trying to explain to a client that a statement that the company is "on track" to meet its projections might be within the safe harbor for forward-looking statements under the Private Securities Litigation Reform Act while a statement that the company "believes that it is on track" might not.  That, unfortunately, is the result according to Bielousov v. Gopro, Inc., 2017 U.S. Dist. LEXIS 117223 (N.D. Cal. 2017). 

 
californiacorporate&securities 1/9/2018
Prevailing Plaintiff Found To Be Liable For Defendant's Legal Fees

The Fourth District Court of Appeal's decision in Burkhalter Kessler Clement & George LLP v. Hamilton (Cal. Ct. of Appeal Case No. G054337 (Jan. 8, 2018)) reminded me of the opening lines of Carole King's 1971 hit song Sweet Seasons:

 
californiacorporate&securities 1/8/2018
What California Lawyers May Learn From This Delaware Case

Shortly before leaving Delaware's Court of Chancery in 2015, Vice Chancellor Donald F. Parsons issued a decision that is widely known for the conclusion that Section 205 of the Delaware General Corporation Law does not authorize the Court of Chancery to invalidate a corporate act.  Genelux Corp. v. Roeder (In re Genelux Corp.), 126 A.3d 644.  If that were the only issue decided, the case would be of little interest to California lawyers because there is no analog to Section 205 in the California General Corporation Law.

 
californiacorporate&securities 1/5/2018
Plaintiffs File Amended Complaint Against Yahoo! But Is Something Missing?

Last spring, a derivative suit was filed in California Superior Court against certain of current and former directors and officers of Yahoo!, Inc. alleging breach of fiduciary duty in connection with the company's widely reported data breach.  The original complaint also included a cause of action for insider trading under California Corporations Code Sections 25402 and 25403.   Yahoo!, Inc., which is now known as Altababa Inc., is a Delaware corporation, but the complaint was filed in California Superior Court.  The day after New Years Day, the plaintiffs filed an amended complaint (Case No. 17CV307054).

 
californiacorporate&securities 1/4/2018
Come Now, Venue Is Not A Forum

At the end of last year, a plaintiff filed a verified class action in the Delaware Court of Chancery seeking a judgment declaring invalid provisions included in the certificates of incorporation of three different companies "purporting to require any claim under the Securities Act of 1933 to be brought in federal court".  Sciabacucchi v. Salzberg et al. Del. Ch. Case No. 2018-0931 (filed Dec. 29, 2017).  The three companies are Blue Apron Holdings, Inc.; Stitch Fix, Inc.; and Roku, Inc.  The plaintiff claims that these provisions "flaunt" the "careful compromises" effected by the General Assembly in Section 115 of the Delaware General Corporation Law.  Interestingly, the plaintiff blames former Securities and Exchange Commissioner Joseph Grundfust for proposing a bylaw or charter provision limiting Securities Act claims to the federal district courts.  Allegedly Professor Grundfest made this proposal in 2016 at a presentation at the Rock Center for Corporate Governance ("In the months that followed, a number of Delaware corporation leapt at the [Professor Grundfest's] suggestion . . .").  

 
californiacorporate&securities 1/3/2018
Court of Appeal Explains Parol Evidence Rule

Today, I am picking up on my discussion of Kanno v. Marwit Capital, No. G052348, 2017 Cal. App. LEXIS 1150 (Ct. App. Dec. 22, 2017) in this post from last week and last year.  Kanno involved the application of the parol evidence rule under both California and Delaware law.

 
californiacorporate&securities 1/2/2018
Tax Cuts And Jobs Act - My Disclosure List (So Far)

As I and many others start to consider the disclosure implications of the Tax Cuts and Jobs Act, I've begun a list of possible disclosure related topics:

 
californiacorporate&securities 12/29/2017
The Form 8-Ks That The SEC May Have Overlooked

As reported by Cydney Posner, Broc Romanek and undoubtedly many others, Corporation Finance staff issued a new Compliance and Disclosure Interpretation addressing whether a re-measurement of a deferred tax asset to incorporate the effects of newly enacted tax rates or other provisions of the Tax Cuts and Jobs Act triggers an obligation to file under Item 2.06…

The post The Form 8-Ks That The SEC May Have Overlooked appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 12/28/2017
Does Choice Of Law Include The Parol Evidence Rule?

On the antepenultimate day before Christmas, the California Court of Appeal issued an opinion that should be of interest and concern to lawyers documenting merger and acquisition agreements.  Kanno v. Marwit Capital, No. G052348, 2017 Cal. App. LEXIS 1150 (Ct. App. Dec. 22, 2017).  The opinion covers many important points that I plan to cover in…

The post Does Choice Of Law Include The Parol Evidence Rule? appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 12/22/2017
Nevada Supreme Court Won’t Allow Advisory Mandamus Escape Hatch

In Archon v. Eight Jud. Dist. Ct., 133 Nev. Adv. Op. 101 (2017), the Nevada Supreme Court provides a concise explanation of the uses of mandamus and administrative mandamus as escape hatches from the final judgment rule.  The background of the case is a bit weird, but it involved a suit by the preferred stockholders of…

The post Nevada Supreme Court Won’t Allow Advisory Mandamus Escape Hatch appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 12/21/2017
The General Corporation Law That Doesn’t Exist

Consider the following excerpts from recent filings made with the Securities and Exchange Commission: The following description summarizes important terms of our capital stock. For a complete description, you should refer to our certificate of incorporation and bylaws, as well as the relevant portions of the Nevada General Corporation Law chapter 78, or the NRS (Nevada Revised…

The post The General Corporation Law That Doesn’t Exist appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 12/20/2017
Delaware Supreme Court Defines “Collusion”

A couple of years ago, I taught Administrative Law at the University of California, Irvine School of Law.  One of the many theories that we covered was the idea of “regulatory capture”.  This is a “term coined by public choice economists to indicate when members of a regulated occupation also dominate the regulatory and law-making process…

The post Delaware Supreme Court Defines “Collusion” appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 12/19/2017
Pay Ratio Disclosure And The Sometimes Mythical Median Employee

Most, but not all, publicly traded companies are, or soon will be, drafting the disclosures required by Section 953(b) of the Dodd Frank Wall Street Reform and Consumer Protection Act.  That statute requires the Securities and Exchange Commission to amend Item 402 of Regulation S-K to require three disclosures: the median of the annual total compensation…

The post Pay Ratio Disclosure And The Sometimes Mythical Median Employee appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 12/18/2017
Does The Sheriff Need A Permit To Sell Shares?

Last week, I wrote about a recent Court of Appeal decision allowing for the possibility that a sale of shares at a sheriff’s sale could amount to conversion.  Duke v. Superior Court, 2017 Cal. App. LEXIS 1116.  A fundamental principle underlying the California Corporate Securities Law of 1968 is that offers and sales of securities…

The post Does The Sheriff Need A Permit To Sell Shares? appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 12/15/2017
Sale Of Shares At Sheriff’s Sale May Constitute Conversion

One might expect that a sheriff’s sale of stock pursuant to a writ of execution could not result in a viable claim for conversion by a judgment debtor.  A California Court of Appeal, however, has ruled that it could. In Duke v. Superior Court, Cal. Ct. Appeal Case No. F073712 (filed 11/21/2017; certified for publication 12/13/2017)…

The post Sale Of Shares At Sheriff’s Sale May Constitute Conversion appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 12/14/2017
Did The Legislature Grant A License To Lie To The Cannabis Industry?

An entire division of California’s Business & Professions Code is devoted to a single plant genus – Cannabis.  The official name of the division is the “Medicinal and Adult-Use Cannabis Regulation and Safety Act” aka the MAUCRSA.  Bus. & Prof. Code § 26000 et seq.  The MAUCRSA provides for, among other things, a new type of…

The post Did The Legislature Grant A License To Lie To The Cannabis Industry? appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 12/13/2017
Cannabizfile Comes To California

California Secretary of State Alex Padilla wants to help entrepreneurs in California by launching a new online business portal.  According to Secretary of State’s press release, the new portal, coined “Cannabizfile“, provides useful information about cannabis-related business filings with the Secretary of State’s office.  The Secretary of State has even published a public service announcement featuring…

The post Cannabizfile Comes To California appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 12/12/2017
Move Aside EPA, The SEC Is Now Regulating Ecosystems!

I don’t hear many securities lawyers talking about “ecosystems”.  Indeed, I think of the word as being more the province of environmental lawyers.  The word itself is an amalgamation of two Greek words – οἶκος, meaning house, and σύστημα, meaning a whole formed from many parts.  Most people think of the “ecosystem” as the interconnection existing in the…

The post Move Aside EPA, The SEC Is Now Regulating Ecosystems! appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 12/11/2017
Were The SEC’s Pay Ratio Rule Efforts Valiant?

James D.C. Barrall recently published a listing of ten consensuses on CEO pay ratio planning.  He begins with the following: “More than seven years after the enactment of the Dodd-Frank Act, the CEO pay ratio rule is finally set to require approximately 3,500 U.S. companies to disclose their 2017 ratios of their CEOs’ pay to…

The post Were The SEC’s Pay Ratio Rule Efforts Valiant? appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 12/8/2017
Another Foolish Inconsistency – This Time For Broker-Dealers

Yesterday’s post chided Glass, Lewis & Co., LLC for its inconsistent positions on majority rule.  Today’s post tackles a foolish inconsistency in the California Codes.  Section 25217(c) of the California Corporations Code provides: A broker-dealer licensed under this chapter making loans to its customers which are subject to the provisions of Division 9 (commencing with…

The post Another Foolish Inconsistency – This Time For Broker-Dealers appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 12/7/2017
Would Glass Lewis Have Anything To Do If It Were Consistent?

Ralph Waldo Emerson famously derided a foolish consistency, famously writing in his essay, Self-Reliance: “With consistency a great soul has simply nothing to do. He may as well concern himself with his shadow on the wall. Speak what you think now in hard words, and to-morrow speak what to-morrow thinks in hard words again, though it…

The post Would Glass Lewis Have Anything To Do If It Were Consistent? appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 12/6/2017
Court: Operating Agreement Did Not Grant Terminated Employees Lifetime Jobs

An employment agreement is one thing and an operating agreement quite another.  In ITV Gurney Holding Inc. v. Gurney, Cal. Ct. Appeal Case No. B281694, the board of a limited liability company fired two employees who were also managers.  The two employees did not challenge the LLC’s right to terminate their employment, but they contended…

The post Court: Operating Agreement Did Not Grant Terminated Employees Lifetime Jobs appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 12/5/2017
Of Touting, Tweets and Advertising

Last month, the Securities and Exchange Commission issued this public statement warning about touting of securities by celebrities: Celebrities and others are using social media networks to encourage the public to purchase stocks and other investments.  These endorsements may be unlawful if they do not disclose the nature, source, and amount of any compensation paid, directly…

The post Of Touting, Tweets and Advertising appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
Blogs 1 - 25 of 1000