The California Corporations Code is a misnomer. While the Corporations Code does in fact govern corporations, it also governs a wide variety of unincorporated entities, including general partnerships, limited partnerships,...more
Last week, Chromocell Therapeutics Corporation filed preliminary proxy materials that included a proposal to reincorporate in Nevada. Rather than convert, the company is proposing to effect the reincorporation by means of a...more
Many corporations pay significant amounts for directors and officers liability policies. Commonly referred to as D&O policies, these policies usually involve three sides. Directors and officers are likely to have the most...more
Last year, Vice Chancellor J. Travis Laster famously held that officers could be subject to liability under the Caremark doctrine. In re McDonald’s Corp., 289 A.3d 343 (Del. Ch. Jan. 26, 2023). The Caremark doctrine...more
Yesterday's post again discussed whether the Securities and Exchange Commission exceeded its authority in adopting Rule 21F-17(a), which provides...more
In a blog post this morning, Liz Dunshee notes that the Securities and Exchange Commission has recently announced the settlement seven more cases involving Rule 21F-17(a), which provides...more
A year ago, Governor Gavin Newsom signed two bills, Assembly Bill 39 and Senate Bill 401, that created the California Digital Financial Assets Law. SB 401 added Section 3902 to the Financial Code to prohibit an operator of...more
9/10/2024
/ ATMs ,
Banking Sector ,
Banks ,
Bitcoin ,
California ,
Cryptocurrency ,
Department of Financial Protection and Innovation (DFPI) ,
Digital Currency ,
Financial Institutions ,
Governor Newsom ,
State Legislatures
Last week, the Securities and Exchange Commission announced that it had settled charges against a broker-dealer and two investment advisers for impeding their clients from reporting securities law violations to the SEC. ...more
California law provides that any licensee of the Department of Alcoholic Beverage Control or agent or employee of the licensee, who sells, gives or delivers to any person any alcoholic beverage between the hours of 2 a.m. and...more
Under Section 1030 of the California Code of Civil Procedure, a defendant may at any time apply to the court by noticed motion for an order requiring the plaintiff to file an undertaking to secure an award of costs and...more
The "usual suspects" when looking for director and officer indemnification requirements are...more
Last month, I commented on the "weird" definition of "hedge fund" in AB 3129 (Wood). On the last day of the current session, the legislature passed the bill. It is now on Governor Newsom's desk....more
9/3/2024
/ Acquisitions ,
Attorney General ,
California ,
Governor Newsom ,
Healthcare Facilities ,
Hedge Funds ,
Hospitals ,
Mergers ,
New Legislation ,
Private Equity ,
State and Local Government
In a new article, professor of law Wendy Gerwick Couture aims for "a fuller understanding of Nevada corporate law, both substantively and theoretically, as compared with Delaware corporate law". For the title and them of her...more
The validity of a board meeting hinges on three things - a quorum, notice and call. Many lawyers focus on the first two and may overlook the third. For California and Nevada corporations, the question of who may call a...more
Yesterday's post concerned the exemption from the qualification requirement of the California Corporate Securities Law for most changes in the rights, preferences, privileges, or restrictions of outstanding securities found...more
A recent post discussed whether amending a shareholders agreement is subject to qualification under the California Corporate Securities Law of 1968. For the purpose of that discussion, it is important to recognize that not...more
I continue to be on the lookout for Delaware corporations that have made the decision to reincorporate in Nevada. Last Friday, Elevai Labs Inc. filed a preliminary information statement with the Securities and Exchange...more
Yesterday, the Fourth District Court of Appeal issued a noteworthy opinion addressing at least two significant questions. Samuelian v. Life Generations Healthcare, LLC, 2024 WL 3878448....more
A significant amount of background is required to answer the question of whether amending a shareholders agreement is subject to qualification under the California Corporate Securities Law. As an initial matter, the CSL...more
As the California legislature approaches its final recess of the current session, it is continuing to move AB 3129 (Wood), a bill that would according to the bill's digest "require a private equity group or a hedge fund, as...more
In May, I took note of this Form 8-K filed by P.A.M. Transporation Services, Inc. announcing board approval of a plan to convert the company's state of incorporation from Delaware to Nevada. The company has now filed...more
8/19/2024
/ Board of Directors ,
Conversion ,
Corporate Governance ,
Corporate Taxes ,
Delaware ,
Delaware General Corporation Law ,
Form 8-K ,
Franchise Taxes ,
Incorporation ,
Nevada ,
Proxy Statements
In 1989, the California legislature added Section 14200 to the California Corporations Code...more
In S.E.C. v. Jarkesy, 2024 WL 3187811 (June 27, 2024), the United States Supreme Court held that when the Securities and Exchange Commission seeks civil penalties against a defendant for securities fraud, the Seventh...more
In a recent post, Professor Stephen Bainbridge expounds on the question of whether the President may fire Chairman Gary Gensler. He concludes...more
I began writing about Nevada Corporate Law more than three decades ago with an article entitled "The Nevada Corporation: Is It A Good Bet?". 14 CEB California Business Law Reporter 259 (1992). In the ensuing decades, I have...more
8/13/2024
/ Board of Directors ,
Corporate Governance ,
Corporate Officers ,
Corporations Code ,
Delaware ,
Delaware General Corporation Law ,
Incorporation ,
Nevada ,
Publicly-Traded Companies ,
Shareholders ,
TripAdvisor