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Looking For A Deceased Celebrity’s Successor-In-Interest? The Secretary Of State Has An Answer

The California Secretary of State’s office is the repository for a vast a disparate number of filings. Few people, for example, may be aware that they may register with the Secretary of State’s office as a...more

Alter Ego and the Nevada LLC

California’s version of the Revised Uniform Limited Liability Company Act expressly subjects members to potential alter ego liability...more

California And The “Entitled To Vote” Standard

Recently, I came across a proxy statement for a California corporation that stated the vote required for shareholder action on several proposals was “the affirmative vote of the majority of the shares represented at the...more

Failure To Return Shares Subject To Repurchase Right Supports Conversion Claim

Closely held issuers often include a repurchase right in their equity award agreements. I expect that in most cases, shareholders will comply with these provisions. When a shareholder doesn’t, the company’s most obvious...more

Continuing Confusion About Shareholder Approval Requirements

I continue to read confused statements in proxy statements about the vote required for shareholder action. The default voting rule in Delaware is found in Section 216(2) of the Delaware General Corporation Law...more

The SEC’s Flawed Changes To Exchange Act Forms

Title I of the Jumpstart Our Business Startups (aka JOBS) Act amended the Securities Act and the Exchange Act to provide some regulatory relief to issuers that qualify as an “emerging growth company”. Recently, the...more

Did Joseph P. Kennedy Make Insider Trading Illegal?

The Patriarch: The Remarkable Life and Turbulent Times of Joseph P. Kennedy. (Penguin Press, 2012) by Professor David Nasaw is one of several books that I am currently reading. As a securities lawyer, the following sentence...more

4/12/2017  /  Insider Information , SEC

False Statements By Money Managers Support California Commodity Law Convictions

In 1990, California enacted the California Commodity Law, Stats. 1990, Ch. 969, Corp. Code § 29500 et seq. Although this law hasn’t attracted the attention of legal writers, it has some very sharp teeth, as illustrated by...more

Criminal Conviction Of De Facto Officer Does Not Preclude D&O Coverage

After a two week trial in 2013, a jury convicted Mitchell J. Stein, a lawyer, of mail, wire, and securities fraud based on evidence that he fabricated press releases and purchase orders to inflate the stock price of his...more

Dismissal Based On Forum Non Conveniens Does Not Trigger Fee Shifting

California generally follows the “American Rule” with respect to attorney’s fees. Trope v. Katz, 11 Cal.4th 274, 278 (1995). Under the American Rule each party to a lawsuit must ordinarily pay his own attorney’s fees. A...more

California’s Corporations Code And Securities Rules Are Rife With Errors

Spring is the traditional season for cleaning and California’s Corporations Code and securities rules are desperately in need of some tidying up. In a very quick and incomplete review of the Code and the Commissioner’s...more

This Foreign Corporation’s Status May Be Forfeited, But The Resident Agent Remains

A recent ruling by U.S. District Court Judge Otis D. Wright II illustrates how it may be easier to enter California than to leave it. Real v. St. Jude Med., Inc., 2017 U.S. Dist. LEXIS 47081 (C.D. Cal. Mar. 29, 2017)...more

Removing Elected Officials For Libelous Or Slanderous Statements

Although the above quotation sounds as if it could have been written today, it was in fact penned more than three decades ago as part of the successful ballot argument in favor of Proposition 20. As a result of the...more

California Considers Following New England Colonists In Outlawing Fake News

California Assemblyman Ed Chau introduced a bill (AB 1104) that according to its author “attacks the problem of ‘fake news’ by creating a new state law designed to make it illegal for someone to make false or deceptive...more

Best Efforts – A California Perspective

UCLA Law School Professor Stephen Bainbridge posted some thoughts yesterday on the meaning of contractual “best efforts” requirements. See What do “best efforts” and variants mean? A proposed set of definitions. The...more

What, Pray Tell, Is A “Foreign Corporation”?

Earlier this week, I wrote about Wellisch v. Pa. Higher Educ. Assistance Agency, 2017 U.S. Dist. LEXIS 40831 (N.D. Cal. Mar. 21, 2017). The issue was whether the defendant, Pennsylvania Higher Education Assistance Agency,...more

Department Of Business Oversight Proposes Changes To Proposed Finders Rule

Last July, the California Department of Business Oversight proposed regulations to implement the provisions of AB 667 (Wagner). The bill, which was enacted in 2015 and took effect last year, created a new exemption from the...more

Interstate Versus Intrastate Business – What’s The Difference?

Some words are easily confused such as hyperthermia and hypothermia. In the case of the former, one is overheated and in the case of the latter, one is not warm enough. The difference becomes more understandable when one...more

Improper Purpose Frustrates Member’s Assertion Of A Proper Purpose

The inspection rights of members of California nonprofit mutual benefit corporations mirror those of shareholders of California corporations. Section 8333 of the Corporations Code provides that the accounting books and...more

Want To File A Derivative Suit? You May Soon Be Required To Read Statutes

I have been writing recently about SB 203, a bill that is now pending in the Nevada legislature. As introduced, the bill would, among other things, require the following...more

Nevada Legislature Ponders Rejection Of Unocal And Revlon Standards

Thirty years ago, the Delaware Supreme Court issued two seminal opinions concerning how courts ought to review director decisionmaking in merger and acquisition transactions. In the first case, Unocal Corporation v. Mesa...more

Even In Nevada, “Get It Writing” May Not Be Far From The Mark

A recent ruling by U.S. District Court Magistrate George Foley, Jr. serves as a reminder the “get it in writing” tends to be good advice. The case involves a casino’s attempt to enforce a $3 million gaming debt incurred by...more

Court Finds Lawsuit By Corporation Against Minority Shareholder Is “Protected Activity”

SLAPP is the initialization of the phrase “strategic lawsuit against public participation”. A more informative description of SLAPP suits is found in Simpson Strong-Tie Co., Inc. v. Gore, 49 Cal.4th 12, 21 (2010)...more

Nevada Legislature Mulls Codification Of The Internal Affairs Doctrine

Delaware and Nevada are each in the business of marketing their corporate laws to businesses in other states. Thus, it should surprise no one that these states don’t appreciate it when their legal offerings are undermined by...more

How The Proposed Fix To Delaware’s Stockholder Consent Statute Can Be Fixed

Earlier this week, I wrote about a proposed amendment to Section 228 of the Delaware General Corporation Law. The amendment, which is proposed by The Corporate Council of the Corporation Law Section of the Delaware State...more

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