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A Subsidiary Post

Not too long ago, I wrote about the Securities and Exchange Commission’s confusing classification of subsidiaries. See The Case Of The Wholly Owned, But Not Totally Held, Subsidiary That May Or May Not Be 100% Owned. Since...more

Under The Public Records Act, A Losing Party May Be The Prevailing Party

When the California legislature enacted the Public Records Act, it declared “access to information concerning the conduct of the people’s business is a fundamental and necessary right of every person in this state”. Gov’t...more

California Supreme Court Declines To Rehear Documentary Transfer Tax Appeal

In June, I wrote about the California Supreme Court’s disappointing decision in 926 N. Ardmore Ave. v. County of L.A., 2017 Cal. LEXIS 4768 (Cal. 2017). Readers may recall that the Supreme Court applied the concept of a...more

Inside And Outside Reverse Veil Piercing

UCLA Professor Stephen Bainbridge has published several posts commenting on my post discussing Curci Invs. v. Baldwin, 2017 Cal. App. LEXIS 698. The issue in Curci was whether reverse veil piercing of a limited liability...more

California Court Green Lights Reverse Veil Piercing Of Delaware LLC

Courts historically have applied the alter ego doctrine to “pierce the corporate veil” so that a shareholder may be held liable for the debts or conduct of the corporation. California has extended the possibility of alter...more

Transfer To Non-Existent Corporation Held To Be A Transfer Nonetheless

Sometimes, the law is just weird. The case of PGA West Residential Ass’n, Inc. v. Hulven Int’l, Inc., Cal. Ct. App. Case No. E064270 (Aug. 9, 2017) is weirder than most. The lawsuit alleged that the defendant had tried to...more

How To Confer A $6.9 Million Benefit For Less Than A Half Dollar

In March 2011, the three-member compensation committee of EchoStar Corporation awarded options to purchase 1.5 million shares of company stock to its Chairman, Charles W. Ergen. According to EchoStar’s proxy statement for...more

Did The Co-Founder Of Alcoholics Anonymous Violate Rule 10b-5?

Recently, I enjoyed watching My Name is Bill W., a 1989 movie that starred James Woods, JoBeth Williams and James Garner. The film tells the story of Alcoholics Anonymous co-founder William Griffith Wilson (aka Bill W.). In...more

Was The Jury Empaneled Or Impaneled?

Last week’s news was filled with reports that Special Counsel Robert Mueller had impaneled a grand jury (The Wall Street Journal). Or did Mr. Meuller empanel a grand jury (The Washington Post). Aside from the political and...more

Nevada Supreme Court Holds That Member-Managers Were Not Proper Parties To Negligence Claim Against An LLC

In an opinion issued yesterday, the Nevada Supreme Court addressed the extent to which a member of a limited liability company is protected in a negligence based tort action against the LLC. Gardner v. Henderson Water Park,...more

Another “Best Practices” May Not Be Best After All

For years, I’ve been critical of governance experts who promote “best practices” without any basis that these practices are actually effective, much less the best. For example, the Harvard Law School’s Shareholder Rights...more

Court Of Appeal Holds LLC’s Former Counsel May Represent Insider Defendants In Derivative Suit

Derivative actions can be somewhat confusing. Although the entity is essentially the plaintiff, it is named as a defendant. Initially, one might question why must the corporation be named as a party? I can think of at...more

Materiality – “Shoulda, Coulda, Woulda?”

John Jenkins recently took note of this letter from the SEC’s Office of Investor Advocate commenting on a proposal by the Financial Accounting Standards Board to amend the definition of “materiality” in Concepts Statement No....more

8/1/2017  /  FASB , Financial Reporting , Materiality , SEC

Does Disclosure Of Results Of Internal Investigation Constitute Subject Matter Waiver?

Last Friday, I wrote about one of the docketed appeals in Wynn Resorts, Limited v. Eight Jud. Dist. Ct., 41 Nev. Adv. Op. 52 (2017). Today’s post concerns the other docketed appeal in that case. This appeal addressed...more

Negotiating Permits?

The title of yesterday’s post may have been a bit recondite for some readers as I never directly mentioned negotiating permits in the post. Therefore, today’s post will back up a bit and fill in some of the missing pieces....more

A Permit To Negotiate – Really?

It is sometimes forgotten that the California Corporate Securities Law of 1968 makes it unlawful to either offer or sell a security in California in an issuer transaction unless that the sale has been qualified or exempt from...more

Why Not All Purchasers Are Buyers

Modern English is partially the product of an unnatural grafting of French onto Old English. It is for this reason that we often find two words for nearly the same thing. Thus, we call the animal a cow but the food beef. ...more

Must A Broker-Dealer Be Licensed As A Personal Property Broker?

Is your California securities broker-dealer a licensed personal property broker? Does it need to have such a license to make loans to its customers? Anyone reading California Corporations Code Section 25217(c) would...more

Shares of Foreign Subsidiaries

I expect that little or no thought is given to the possible application of California’s Corporate Securities Law of 1968 when a corporation incorporates a subsidiary under the laws of a foreign country. However, the issuance...more

The Case Of The Wholly Owned, But Not Totally Held, Subsidiary That May Or May Not Be 100% Owned

When someone says that a subsidiary is “wholly owned”, I believe that the common understanding is that the parent company owns all of the issued and outstanding equity of the subsidiary. What if the statement is that the...more

Court Declines To Impose Alter Ego Liability On LLC’s President

In general, the debts, obligations, or other liabilities of a California limited liability company do not become the debts, obligations, or other liabilities of a member or manager solely by reason of the member acting as a...more

When “The Check Is In The Mail” Extinguishes A Debtor’s Obligation

Most creditors likely assume that they have not been paid unless and until they receive checks from their debtors. In many cases that assumption may be correct, but in some cases it won’t be. Section 1476 of the California...more

California Finders Exemption Regulations Are Now Effective

The Commissioner of Business Oversight’s final regulations implementing a new exemption for finders from the broker-dealer provisions of the Corporate Securities Law took effect on June 21, 2017. See 10 CCR §§ 260.211.4,...more

CalPERS And Securities Lending – Waiting For Godot?

California Government Code Section 7603 is short and unambiguous - All loans of securities shall be made pursuant to one of the standardized security loan agreement forms, as developed by the administrators of the State...more

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