Has Your Promissory Note Been Outlawed?

The modern understanding of the term “outlaw” is someone who has broken the law and has not been captured and brought to justice.  There is, however, another sense of the term.  A note is said to be “outlawed” when the statute of limitations no longer permits its enforcement.  Fleury v. Ramacciotti, 8 Cal. 2d 660,

Is Forced Speech In Responding To Staff Comment Letters Inaccurate Speech?

In 2014, the Securities and Exchange Commission announced that all comment letters would request that the issuer include the so-called “Tandy Letter”.  Thus, all staff comment letters include a request for a written statement in haec verba: The company is responsible for the adequacy and accuracy of the disclosure in the filing; Staff comments or

Simple Majority Voting And The Magna Carta

Some activists are continuing to submit stockholder proposals seeking the implementation of “simple majority voting”.  For example,  Morgan Stanley’s 2016 proxy statement includes the following proposal from Newground Social Investment, SPC: RESOLVED: Shareholders of Morgan Stanley hereby request the Board to take or initiate the steps necessary to amend the Company’s governing documents to provide that all non-binding matters presented

Why Delaware Corporations Should Worry About California Law When Making Dividends

When paying a dividend to shareholders, California corporations are subject to Chapter 5 of the California Corporations Code.  Corporations incorporated in Delaware and other states may also be subject to Chapter 5 if they meet the conditions of Corporations Code Section 2115, California’s pseudo-foreign corporation statute.  Section 2115 excepts companies with outstanding companies listed on

Plaintiffs Find California Courts Congenial To Section 11 Actions

Muttering About Mottoes The official motto of the State of California is “Eureka”.  Cal. Gov’t Code § 420.5.  The word is a transliteration of the Greek word εὕρηκα which is first person, singular, indicative active form of verb “find”.  Thus, it translates into “I have found it”.  The motto, which appears on the state’s seal,

Inspecting Foreign Corporation Shareholder Lists

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Recently, I’ve written about the “absolute” right of shareholders to inspect the shareholders list pursuant to California Corporations Code Section 1600.  Readers at, or representing, foreign corporations may have skipped these posts as inapposite to their circumstances.  That could be a mistake. A foreign corporation may be subject to Section 1600 if it meets the conditions set

Federal Court Rules “Mere Affiliation” Is Insufficient To Establish Personal Jurisdiction

Nearly four years ago, I wrote about a Nevada Supreme Court decision holding that Nevada courts can exercise personal jurisdiction over nonresident officers and directors who directly harm the corporation.  Consipio Holding, BV v. Carlberg, 282 P.3d 751 (2012).  At the time, Nevada did not have an implied consent statute similar to Del. Code tit. 10,

More On Inspecting The Shareholder List And The Regulation Of Alien Implants

Yesterday’s post discussed California’s “absolute” right of shareholders to inspect the shareholder list established by Section 1600 of the California Corporations Code.  Some additional points are briefly worth noting: Neither the articles of incorporation or bylaws may limit this statutory inspection right.  Cal. Corp. Code § 1600(d). The right to inspect the shareholder list is