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CALIFORNIA CORPORATE & SECURITIES LAW

Can Shareholders Sue CEOs For Corporate Social Activism?

In an August 17, 2017 opinion piece published in The Wall Street Journal, Jon L. Pritchett and Ed Tiryakian had the following message for shareholders: Our message to small shareholders of companies like Starbucks, Merck and Target: You can sue when a CEO decides to institute a corporate social-responsibility program that has no benefit to the business.…

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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 this blog is concerned primarily with California corporate and securities laws, I would be remiss in not adding a…

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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 Code § 6250.  The legislature was serious, granting “any person may institute proceedings for injunctive or declarative [sic] relief or writ of…

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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).  See California Supreme Court Affirms Novel M&A Tax. Readers may recall that the Supreme Court applied the concept of a change in ownership for purposes of triggering property tax reassessments…

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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 company is possible in light of Postal Instant Press, Inc. v. Kaswa Corp., 162 Cal.App.4th 1510 (2008).  The Court distinguished Postal…

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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 ego liability to members of California limited liability companies: A member of a limited liability company shall be subject to…

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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 insulate the equity in his condominium from creditor claims by executing a promissory note and…

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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 its 2012 annual meeting, the aggregate grant date fair value of the award was $21.6 million.  There was just one problem, the plan…

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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 telling his story, the film details Wilson’s  work on Wall Street during the 1920s.  According to the film, Wilson decides…

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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 legal issues, these reports raised two questions.  First, why do we talk of em/impaneling a jury?  Second, which…

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