Nevada likes to market itself as a low tax jurisdiction, touting the fact that “Nevada does not impose income tax on domestic or foreign corporations.” It may not impose a tax on income, but it does impose a tax on...more
Plaintiffs sue corporations and they sue individual members of the boards of directors, but can a plaintiff sue a board of directors as a body? That was the question in Theta Chi Fraternity, Inc. v. Leland Stanford Junior...more
Last week, the Securities and Exchange Commission trumpeted that whistleblower awards have now exceeded $100 million, or a million Benjamins!...more
California law does not permit limited liability companies to render a variety of professional services. See, Contractors Do It, PIs Do It; Why Not Real Estate Brokers? To add insult to injury, the California General...more
A legal proceeding brought in a representative capacity is sometimes referred to as a “shareholder’s derivative action” and sometimes as a “shareholder’s derivative suit”. Which is correct?...more
In this recent post, I suggested that absolute guarantees of confidentiality to whistleblowers may be counterproductive. In today’s post, I will elaborate on why....more
Companies typically cite cost savings and ease of access as the motivation for holding virtual stockholder meetings. Andy D. Bryant, Chairman of the Board of Intel Corporation, for example, provided the following rationale...more
Corn v. Superior Court, 2016 Cal. App. Unpub. LEXIS 6182 (Cal. App. 2d Dist. Aug. 22, 2016) is a case about the meaning of one sentence in a settlement agreement consisting of just seven words – “The Parties agree to...more
Although the Securities and Exchange Commission does not require that a company adopt a code of business conduct and ethics, I would be very surprised to hear of an SEC reporting company that has not adopted such a code. ...more
A number of amendments to Delaware’s General Corporation Law took effect at the beginning of this month. One of these changes was to establish a default quorum requirement for meetings of committees of corporate boards of...more
In mid July, the House of Representatives passed the Separation of Powers Restoration Act of 2016, H.R. 4768 (SOPRA). If enacted, the SOPRA would amend the federal Administrative Procedure Act to require a reviewing court to...more
As I suspected, law firms are churning out memoranda on the SEC’s recent enforcement actions involving alleged impediments to whistleblowers. While accurately, summarizing these actions, I’m not sure that some of the authors...more
I am occasionally asked who should sign the bylaws. The question presumes that bylaws must be signed. Although the California General Corporation Law requires that the original or a copy of the bylaws be available to...more
As Ralph Waldo Emerson once famously told Oliver Wendell Holmes, Jr.: ““Holmes, when you strike at a king, you must kill him.” For the full story, see The Corporations Code Can Make Suing Your Former Employees Costly. I was...more
8/19/2016
/ Bylaws ,
Clawbacks ,
Delaware General Corporation Law ,
Deutsche Bank ,
Forum Selection ,
General Corporation Law ,
Proxy Statements ,
Rule 21F ,
Securities and Exchange Commission (SEC) ,
Shareholder Approval ,
Whistleblower Awards
The Securities and Exchange Commission is aggressively interpreting and enforcing its rule against impeding whistleblowers. Rule 21F-17(a) provides...more
Earlier this week, I wrote about Judge Edward M. Chen’s ruling in Sender v. Franklin Res., Inc., 2015 U.S. Dist. LEXIS 171453, 3-4 (N.D. Cal. Dec. 22, 2015). Judge Chen applied California Corporations Code Section 419 to a...more
Quite some time ago, I fabulated that airline delays might constitute a violation of Securities and Exchange Commission Rule 21F-17. That rule provides that no person “may take any action to impede an individual from...more
U.S. District Court Judge Edward M. Chen recently ruled that a stockholder could maintain an action under California Corporations Code Section 419 for replacement of a lost, stolen or destroyed certificate. As just...more
The story is straightforward; the legal ramifications are not:
The plaintiff sued a corporation. Before the lawsuit was filed, the Secretary of State had suspended the corporation and then the corporation was...more
Late last month, the California State Treasurer’s Office announced a “move to stop ‘Pay-to-Play’ school bond campaigns”. According to the announcement...more
Yesterday, I wrote about an attempt, albeit unsuccessful, to avoid a forum selection clause by a claim of rescission. The plaintiffs’ in that case, Hatteras Enterprises, Inc. v. Forsythe Cosmetic Group, Ltd., 2016 U.S. Dist....more
A recent ruling by U.S. District Court Judge Arthur D. Spatt raises the interesting question of whether a choice of law provision can be vitiated by rescission. The case, Hatteras Enterprises, Inc. v. Forsythe Cosmetic...more
I recently came across Fukuda v. Nethercott, 2016 U.S. Dist. LEXIS 92462 (D. Utah, July 15, 2016). The case involved claims by the plaintiff that the defendants had sold him securities in violation of the registration...more
A signature block in a contract seems like a small thing, but sometimes it can lead to litigation. When an officer signs a contract, is he signing solely as agent for the corporation or might he also be signing in his...more
In a prior post, I compared the differing limitations on committee authority under California and Delaware law. Today’s post focuses on differences in committee composition among California, Delaware and Nevada. These are...more