Keith Bishop at Allen Matkins

Issuer Retreats From Racial Share Allocation Scheme

In February, I wrote about a proposed offering that involved a racially based share allocation scheme. Last month, it appeared that the offering was stalled at the Securities and Exchange Commission. Recently, the company,...more

5/7/2025 / Affirmative Action , Constitutional Challenges , Diversity and Inclusion Standards (D&I) , Preliminary Injunctions , Publicly-Traded Companies , Securities and Exchange Commission (SEC) , Securities Litigation , Securities Regulation , Shareholders

Is A Stake An Unincorporated Association?

I have devoted several posts over the years to California's Unincorporated Association Law. Although many houses of worship are incorporated, some are not. Even amongst incorporated religious groups, there can be sub-groups...more

5/6/2025 / Business Entities , California , Corporations Code , Diversity Jurisdiction , Jurisdiction , Unincorporated Associations

Is Delaware Forum Selection Bylaw Binding On Shareholder Who Filed Suit When The Corporation Was Incorporated In California?

In Drulias v. 1st Century Bancshares, Inc. 30 Cal. App. 5th 696 (2018), the plaintiff was a shareholder in a Delaware corporation whose board of directors approved a merger agreement and at the same time adopted a forum...more

5/5/2025 / Appeals , Appellate Courts , Board of Directors , California , Corporate Governance , Delaware , Forum Selection , Jurisdiction , Mergers , Shareholder Litigation

In More Bad News For Delaware, Nevada Legislature Proposes To Allow Jettisoning Jury Trials For "Internal Actions"

I have previously noted certain provisions of a bill amending Nevada's business entity statutes, AB239. See Nevada Bill Would Impose A Duty That Directors Be Informed and Nevada Bill Would Expressly Allow Directors To...more

5/2/2025 / Board of Directors , Business Entities , Business Litigation , Corporate Governance , Fiduciary Duty , Jury Trial , Litigation Strategies , Nevada , New Legislation , Shareholders

Broker-Dealers, Investment Advisers And Others May Soon Face Enforcement Under the California Consumer Financial Protection Law

In 2020, the legislature enacted the California Consumer Financial Protection Law. The CCFPL significantly expanded the regulatory authority of the the Department of Financial Protection & Innovation by granting it the...more

5/1/2025 / Broker-Dealer , California Consumer Financial Protection Law (CCFPL) , Consumer Protection Laws , Department of Financial Protection and Innovation (DFPI) , Enforcement Actions , Financial Institutions , Investment Adviser , Proposed Legislation , Regulatory Reform , Securities Regulation

California May Soon Require Owners To Register And Report Commercial Property

In California, it seems that everything must be registered and reported to the state. A spot bill, SB 789 (Menjivar) was recently amended to require that individuals and entities owning commercial property in the state to...more

4/29/2025 / California , Commercial Property Owners , Filing Requirements , Government Agencies , New Legislation , Property Owners , Proposed Legislation , Real Estate Transactions , Reporting Requirements , State Taxes

For Delaware, Are The Times A-changin'?

Last Friday, California headquartered Affirm Holdings, Inc. filed preliminary proxy materials for a special meeting of stockholders to consider a proposal to reincorporate from Delaware to Nevada. Affirm is joining several...more

4/28/2025 / Business Litigation , Corporate Governance , Delaware , Incorporation , Nevada , Publicly-Traded Companies , Regulatory Reform , Securities Litigation , Shareholder Litigation , Shareholders

Nevada Supreme Court: Judge, Not Jury, Decides Unambiguous Contract

In 2011, a local water district in Nevada entered into a lease agreement with Paradise Canyon, LLC to provide shares of water for irrigating the Wolf Creek Golf Club. The lease agreement granted Paradise Canyon a right of...more

4/25/2025 / Appellate Courts , Breach of Contract , Commercial Litigation , Contract Disputes , Contract Interpretation , Damages , Declaratory Judgments , Jury Trial , Nevada , State and Local Government

If You Agree That Stock Issuance Was Not "Compensation, Salary, Or Income", You May Want To Think Carefully Before Issuing A Form...

Ten years ago, Hovik Nazaryan sued Femtometrix, Inc. claiming that the company had issued shares to him than it had promised. The parties settled the lawsuit. The settlement agreement provided that the stock issued to Mr....more

4/24/2025 / Appeals , Breach of Contract , Business Litigation , California , Corporate Governance , Corporate Officers , Enforcement Actions , Internal Revenue Code (IRC) , Settlement Agreements , Shareholders

Ninth Circuit Upholds DFPI's Commercial Financing Disclosure Rules

On September 30, 2018, California enacted SB 1235, codified at California Financial Codes sections 22800–22805. SB 1235 requires that an offer of commercial financing for $500,000 or less be accompanied by disclosures of: (1)...more

4/23/2025 / Appeals , California , Constitutional Challenges , Disclosure Requirements , Financial Institutions , Financial Services Industry , First Amendment , Government Agencies , Regulatory Authority , Rulemaking Process

If The Shares Of A Chinese Company Are Delisted, What Happens To Trading In California?

Yesterday's Wall Street Journal includes a story about the possible delisting of shares of Chinese companies. Shares of companies that are listed, or authorized for listing, on a national securities exchange (or tier or...more

4/22/2025 / Broker-Dealer , California , China , Corporations Code , Delisting , Exemptions , Publicly-Traded Companies , Securities Act of 1933 , Securities Exchange Act of 1934 , Securities Regulation

Digital Financial Assets - Out Of The Frying Pan And Into The Fire?

The application of the securities laws to digital financial assets has been fraught for lawyers and their clients. After taking a hard line that many of these assets were securities under the federal securities laws, the...more

4/21/2025 / California , Cryptocurrency , Digital Assets , Financial Regulatory Reform , New Regulations , Regulatory Reform , Regulatory Requirements , Securities and Exchange Commission (SEC) , Securities Regulation

Nevada Supreme Court: Chapter 7 Filing Defeats Shareholder Breach Of Fiduciary Claim

Globe Photos, Inc. owned a portfolio of millions of images of celebrities and musicians, including Marilyn Monroe, the Beatles, and Jimi Hendrix, some taken by famous photographers such as Frank Worth. Despite these assets,...more

4/18/2025 / Appeals , Bankruptcy Court , Board of Directors , Breach of Duty , Chapter 7 , Commercial Bankruptcy , Delaware General Corporation Law , Derivative Suit , Fiduciary Duty , Shareholder Litigation

Fidelity National Financial, Inc. Takes Another Run On Nevada Move

Last year, I reported that the stockholders of Fidelity National Financial, Inc. had failed to approve a proposal to convert the corporation from a Delaware to a Nevada corporation. The company has not given up on the...more

4/17/2025 / Business Entities , Corporate Charters , Corporate Governance , Delaware , Incorporation , Nevada , Proposed Amendments , Proxy Statements , Shareholder Proposals , Shareholders

The Possible Securities Act Implications Of Harvard's "Nyet" To Government Civil Rights Reform Demands

Last week, the United States General Services Administration, Department of Education, and Department of Health and Human Services sent a letter to Alan M. Garber, the President of Harvard University, and Penny Pritzker, Lead...more

4/16/2025 / Bonds , Disclosure Requirements , Educational Institutions , Harvard University , Internal Revenue Code (IRC) , Securities Act of 1933 , Securities and Exchange Commission (SEC) , Securities Regulation , Tax Exemptions , Tax Liability

When Do Blue Sky Laws Apply?

In my experience, many securities lawyers are well versed in the federal securities laws, but have little experience with state securities laws. This is understandable because federal law in many cases preempts state...more

4/15/2025 / Blue Sky Laws , California , Exemptions , Investment , Regulatory Requirements , Securities , Securities Act of 1933 , Securities and Exchange Commission (SEC) , Securities Fraud , Securities Regulation

Are Many Nasdaq Global Select Corporations Subject To The California General Corporation Law?

Only a few publicly traded corporations are incorporated in California. Most either started life in Delaware or later decamped to that state (and more recently other states). Nonetheless, many of these corporations have...more

4/14/2025 / California , Constitutional Challenges , Foreign Corporations , General Corporation Law , Nasdaq

The UCC, Passover And Another Public Company Plans Delaware Exit

In recognition of the beginning of Passover at sunset tomorrow, today's post reprises this post from 2015...more

4/11/2025 / Acquisitions , Business Entities , China , Corporate Governance , Delaware General Corporation Law , Jurisdiction , Mergers , Nevada , Publicly-Traded Companies , Uniform Commercial Code (UCC)

For Delaware, The Garden Party May Soon Be Ending Despite SB21

In speaking with a reporter earlier this year, I observed that this proxy season will tell whether DExit has legs. While not exactly, a flood, several well-known and lesser-known corporations have recently filed proxy...more

4/10/2025 / Business Judgment Rule , Delaware , Incorporation , Nevada , Proxy Statements , Publicly-Traded Companies , Regulatory Reform , Shareholder Litigation

Delaware LLCs - "I See Trouble On the Way"

Delaware had barely birthed changes to Section 144 of its General Corporation Law when the Plumbers & Fitters Local 295 Pension Fund filed a complaint challenging those changes. The plaintiff seeks a declaration that the...more

4/9/2025 / Board of Directors , Business Entities , Constitutional Challenges , Delaware General Corporation Law , Fiduciary Duty , Limited Liability Company (LLC) , New Legislation , Operating Agreements , Publicly-Traded Companies , Shareholder Litigation

Unreasonableness Or Carelessness Is Insufficient To Prove Liability In Nevada

Nevada's exculpatory statute, NRS 78.138(7), requires a plaintiff to both rebut a statutory presumption of good faith and prove a breach of fiduciary duty involving intentional misconduct, fraud, or a knowing violation of the...more

4/8/2025 / Breach of Duty , Business Litigation , Corporate Governance , Corporate Misconduct , Corporate Officers , Directors , Fiduciary Duty , Nevada , Securities Litigation , Shareholder Litigation

Intentionally Discriminatory Public Offering Stalled At The SEC

In this February post, I pondered the question of whether an issuer could allocate shares on the basis of race, gender or ethnicity. That post was inspired by the case of Glennon v. Johnson, U.S. Dist. Ct. Case No....more

4/7/2025 / Affirmative Action , Constitutional Challenges , Discrimination , Diversity , Fourteenth Amendment , Gender Discrimination , Initial Public Offering (IPO) , Race Discrimination , Securities and Exchange Commission (SEC) , Securities Regulation

Keith Bishop

Allen Matkins

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