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californiacorporate&securities 5/5/2016
Has Your Promissory Note Been Outlawed?

The modern understanding of the term “outlaw” is someone who has broken the law and has not been captured and brought to justice.  There is, however, another sense of the term.  A note is said to be “outlawed” when the statute of limitations no longer permits its enforcement.  Fleury v. Ramacciotti, 8 Cal. 2d 660,

The post Has Your Promissory Note Been Outlawed? appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 5/4/2016
Is Forced Speech In Responding To Staff Comment Letters Inaccurate Speech?

In 2014, the Securities and Exchange Commission announced that all comment letters would request that the issuer include the so-called “Tandy Letter”.  Thus, all staff comment letters include a request for a written statement in haec verba: The company is responsible for the adequacy and accuracy of the disclosure in the filing; Staff comments or

The post Is Forced Speech In Responding To Staff Comment Letters Inaccurate Speech? appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 5/3/2016
Simple Majority Voting And The Magna Carta

Some activists are continuing to submit stockholder proposals seeking the implementation of “simple majority voting”.  For example,  Morgan Stanley’s 2016 proxy statement includes the following proposal from Newground Social Investment, SPC: RESOLVED: Shareholders of Morgan Stanley hereby request the Board to take or initiate the steps necessary to amend the Company’s governing documents to provide that all non-binding matters presented

The post Simple Majority Voting And The Magna Carta appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 5/2/2016
Why Delaware Corporations Should Worry About California Law When Making Dividends

When paying a dividend to shareholders, California corporations are subject to Chapter 5 of the California Corporations Code.  Corporations incorporated in Delaware and other states may also be subject to Chapter 5 if they meet the conditions of Corporations Code Section 2115, California’s pseudo-foreign corporation statute.  Section 2115 excepts companies with outstanding companies listed on

The post Why Delaware Corporations Should Worry About California Law When Making Dividends appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
californiacorporate&securities 4/29/2016
Plaintiffs Find California Courts Congenial To Section 11 Actions

Muttering About Mottoes The official motto of the State of California is “Eureka”.  Cal. Gov’t Code § 420.5.  The word is a transliteration of the Greek word εὕρηκα which is first person, singular, indicative active form of verb “find”.  Thus, it translates into “I have found it”.  The motto, which appears on the state’s seal,

The post Plaintiffs Find California Courts Congenial To Section 11 Actions appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
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

The post Inspecting Foreign Corporation Shareholder Lists appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
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,

The post Federal Court Rules “Mere Affiliation” Is Insufficient To Establish Personal Jurisdiction appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
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

The post Inspecting The Shareholder List appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
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

The post Happy Birthday William Shakespeare! appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
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

The post The Statue And Statute Of The Three Lies appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
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

The post What Law Governs A Foreign General Partnership? appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
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

The post Is a Trustee Ever Just A Trustee? appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
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

The post Court May Not Employ Alan Funt Tactics To Assess Attorney-Client Privilege appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
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

The post Revoking An Irrevocable Proxy appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
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

The post Court Rules Dissolution of Cooperative Corporation Is A Process, Not A Flash appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
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

The post Plaintiffs Continue To Search For Private Cause Of Action Under Transparency In Supply Chains Act appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
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

The post Court Holds That Exempt Lender May Violate California Usury Statute appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
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,

The post Bill Aims To Put The Kibosh On Alleged Hedge Fund Stock Price Manipulation appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
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

The post In California, Mayhem May Not Be What You See On Television appeared first on CALIFORNIA CORPORATE & SECURITIES LAW.

 
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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Blogs 1 - 25 of 200