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californiacorporate&securities 4/28/2016
Inspecting Foreign Corporation Shareholder Lists

Recently, I’ve written about the “absolute” right of shareholders to inspect the shareholders list pursuant to California Corporations Code Section 1600.  Readers at, or representing, foreign corporations may have skipped these posts as inapposite to their circumstances.  That could be a mistake. A foreign corporation may be subject to Section 1600 if it meets the conditions set

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californiacorporate&securities 4/27/2016
Federal Court Rules “Mere Affiliation” Is Insufficient To Establish Personal Jurisdiction

Nearly four years ago, I wrote about a Nevada Supreme Court decision holding that Nevada courts can exercise personal jurisdiction over nonresident officers and directors who directly harm the corporation.  Consipio Holding, BV v. Carlberg, 282 P.3d 751 (2012).  At the time, Nevada did not have an implied consent statute similar to Del. Code tit. 10,

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californiacorporate&securities 4/26/2016
More On Inspecting The Shareholder List And The Regulation Of Alien Implants

Yesterday’s post discussed California’s “absolute” right of shareholders to inspect the shareholder list established by Section 1600 of the California Corporations Code.  Some additional points are briefly worth noting: Neither the articles of incorporation or bylaws may limit this statutory inspection right.  Cal. Corp. Code § 1600(d). The right to inspect the shareholder list is

The post More On Inspecting The Shareholder List And The Regulation Of Alien Implants appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 4/25/2016
Inspecting The Shareholder List

Section 1600(a) of the California General Corporation Law establishes the “absolute right” of a shareholder or shareholders to inspect the shareholder list.  To be eligible to exercise this right, the shareholder or shareholders must hold at least: 5% in the aggregate of the outstanding voting shares of the corporation; or 1% of those voting shares and

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californiacorporate&securities 4/22/2016
Happy Birthday William Shakespeare!

Tomorrow will be the anniversary of William Shakespeare’s birth in 1564.  He died on the same date in 1616, making this the 400th anniversary of his death.  Actually, the exact date of his birth is unknown, but it is traditionally given as the same date of the month as his death. Below are just a

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californiacorporate&securities 4/21/2016
The Statue And Statute Of The Three Lies

The Statue of Three Lies In Harvard Yard, there is a prominent bronze statue of a man sitting on a chair.  The statue is the work of the prolific American sculptor Daniel Chester French.  The statue is vaguely reminiscent of French’s more famous depiction of a sitting President Abraham Lincoln in the Lincoln Memorial.  (Does it really make sense to call a

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californiacorporate&securities 4/20/2016
What Law Governs A Foreign General Partnership?

The California Uniform Partnership Act of 1994 defines a “partnership” to mean “an association of two or more persons to carry on as coowners a business for profit formed under [Cal. Corp. Code] Section 16202, predecessor law, or comparable law of another jurisdiction . . .”.  Cal. Corp. Code § 16101(9).  The California act does not define

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californiacorporate&securities 4/19/2016
Is a Trustee Ever Just A Trustee?

Trusts are confusing.  Fundamentally, a trust describes a relationship, not a person.  Thus, the California Supreme Court has described a trust as “a fiduciary relationship with respect to property in which the person holding legal title to the property — the trustee — has an equitable obligation to manage the property for the benefit of another — the

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californiacorporate&securities 4/18/2016
Court May Not Employ Alan Funt Tactics To Assess Attorney-Client Privilege

California, unlike other states, has codified the attorney-client (and other evidentiary) privileges.  Cal. Evid. Code §§ 900 et seq.  In an opinion issued last week, the California Court of Appeal provided a nice summary of how a court must assess attorney-client privilege claims: A court, however, may not review the contents of a communication to determine whether

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californiacorporate&securities 4/15/2016
Revoking An Irrevocable Proxy

Until 1931, California did not permit the creation of an irrevocable proxy.  With the 1931 revision of the General Corporation Law, it became possible to create an irrevocable proxy if that proxy was “coupled with an interest”.  Former Cal. Corp. Code § 2228.  The current law, which was partially based on New York’s statute , specifies

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californiacorporate&securities 4/14/2016
Just How Many Errors Can Be Found In The Securities Act?

I’ve recently completed my editing of the annual update to Marsh & Volk’s treatise, Practice Under the California Securities Laws.  One source of frustration has been to account for and explain the numerous technical errors in the securities laws.  When I refer to “errors”, I don’t mean policy decisions with which I disagree.  I mean the

The post Just How Many Errors Can Be Found In The Securities Act? appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 4/13/2016
How California Made Mergers Potentially More Difficult

The last two sentences of Section 1101 of the Corporations Code can be an unwonted surprise to some practitioners.  They are intended to ensure fair treatment of shareholders in a merger by imposing two requirements: Each share of the same class or series of any constituent corporation must be treated equally with respect to the distribution of

The post How California Made Mergers Potentially More Difficult appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 4/12/2016
Court Rules Dissolution of Cooperative Corporation Is A Process, Not A Flash

I don’t see that many cases involving California’s Cooperative Corporation Law and so I was interested in a recent ruling by Magistrate Judge Laurel Beeler in English & Sons, Inc. v. Straw Hat Rests., Inc., 2016 U.S. Dist. LEXIS 44803 (N.D. Cal. Apr. 1, 2016).  The case arose from the desire to transition the Straw Hat pizza restaurant

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californiacorporate&securities 4/11/2016
Plaintiffs Continue To Search For Private Cause Of Action Under Transparency In Supply Chains Act

Last January, I wrote about one plaintiff’s unsuccessful attempt to pursue claims against the maker of Fancy Feast cat food for failure to disclose the alleged use of forced labor.  Barber v. Nestlé USA, Inc., 2015 U.S. Dist. LEXIS 170608 (C.D. Cal. Dec. 9, 2015).  Readers may recall that the California Transparency in Supply Chains Act requires

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californiacorporate&securities 4/8/2016
Court Holds That Exempt Lender May Violate California Usury Statute

If you’re interested in California’s usury law, you have to look in several places: the Constitution, uncodified initiative measures, codes and case law.  When Woodrow Wilson was occupying the White House, the people of California approved a series of initiative measures with respect to interest rates.  Although technically uncodified, these provisions can be found in Section 1916-1 to

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californiacorporate&securities 4/7/2016
Why Some Delaware Corporations Will Want To Waive This California Statute

In yesterday’s post, I commented on a recent ruling by former Vice Chancellor John W. Noble to the effect that “Delaware disclosure law which generally does not require disclosures to shareholders unless shareholder action is sought”.  The Ravenswood Investment Company, L.P. v. Winmill & Co. Inc., C.A. No. 7048-VCN (Transcript) (Del. Ch. Feb. 25, 2016). 

The post Why Some Delaware Corporations Will Want To Waive This California Statute appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 4/6/2016
Why Some Delaware Corporations Should Be Careful About Relying On This Vice Chancellor’s Ruling

Francis Pileggi in his Delaware Corporate & Commercial Litigation Blog recently wrote that there is no per se duty on the part of a closely held company to disclose financial statements .  In The Ravenswood Investment Company, L.P. v. Winmill & Co. Inc., C.A. No. 7048-VCN (Transcript) (Del. Ch. Feb. 25, 2016), former Vice Chancellor John W. Noble wrote:

The post Why Some Delaware Corporations Should Be Careful About Relying On This Vice Chancellor’s Ruling appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 4/5/2016
Bill Aims To Put The Kibosh On Alleged Hedge Fund Stock Price Manipulation

The California Corporate Securities Law has long declared a number of manipulative devices to be unlawful.  See Cal. Corp. Code § 25400.  Now, a California legislator wants to add to the list.  As amended last week, SB 726 (Hueso) would insert a new Section 25401.2 to the Corporations Code declaring: It is unlawful for any person, directly or indirectly,

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californiacorporate&securities 4/4/2016
In California, Mayhem May Not Be What You See On Television

While watching the NCAA tournament, I sat through several replays of this Allstate commercial featuring an anthropomorphized mayhem. The advertisement is one of a series featuring actor Dean Winters as the cause of all manner of “mayhem”.  Although mayhem in common parlance has come to refer to all manner of chaotic violence or destruction, that

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californiacorporate&securities 4/1/2016
Bagley-Keene Act Roils State Bar Committees

Today, the California State Bar becomes subject to the Bagley-Keene Open Meeting Act (Cal. Gov’t Gov’t Code § 11120 et seq. ).  The Bagley-Keene Act generally requires multimember state bodies to provide public notice of their meetings, prepare agendas, accept public testimony and conduct their meetings in public unless specifically authorized by the Act to meet in

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californiacorporate&securities 3/31/2016
Is The Delaware General Corporation Law Really A Modern Corporate Law?

I often hear it said that Delaware has a modern corporate law.  In reading a recently filed proxy statement, for example, I came across the following assertion: Our Board of Directors believes Delaware has one of the most modern statutory corporation codes, which is revised regularly in response to changing legal and business needs of corporations.

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californiacorporate&securities 3/30/2016
Citizenship And The California Securities Laws

I often hear lawyers say something along the lines of “We need to find an exemption from the California Corporate Securities Law because one of the investors is a citizen of California”.  The citizenship or residency of a purchaser, however, doesn’t necessarily determine whether the CSL will apply to an offer or sale.  Qualification of an offer

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californiacorporate&securities 3/29/2016
SEC Alleges LLC Names Were “Deceptively Similar”, But What Would The California SOS Do?

Yesterday, the SEC announced that it had filed a complaint against a securities professional alleging that he had defrauded “two institutions he solicited to invest in a shell company he controlled whose name was deceptively similar to that of a legitimate private equity fund.”  (The SEC likes to say that it “charges” defendants, but it

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californiacorporate&securities 3/28/2016
Does Anyone Remember Y2K – California Does!

In the closing years of the last millennium, many were concerned about the “Year 2000 Problem” (aka Y2K).  According to this Securities and Exchange Commission interpretive release: The “Year 2000 problem” arose because many existing computer programs use only the last two digits to refer to a year. Therefore, these computer programs do not properly

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californiacorporate&securities 3/25/2016
Designated Lender’s Counsel

Doug Cornelius at Compliance Building writes today about borrowers paying the legal fees of lender’s counsel: Of course there is a conflict with the law firm. That too is a conflict that has been in place for decades. The bank’s lawyers know they represent the bank. They also know the borrower is paying their bill. Until

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Blogs 1 - 25 of 200