Court Of Appeal Rejects Omnicare In Favor Of Jewel Companies
Yesterday, the California Court of Appeal issued a brief, yet interesting, opinion that addressed several questions of California corporate law, Monty v. Leis, Cal. Ct. of Appeal (Div. 6) 2d Civil No. B225646 (March 30, 2011). The Facts The case initially involved a suit by two shareholders of a bank to stop an infusion of additional capital required by the Read more...
True Or False? Golden Parachutes Benefit Shareholders
Golden parachute arrangements are often included in discussions of anti-takeover devices. For example, the late Harold Marsh, Jr. in his magnum opus, Marsh’s California Corporation Law, discusses golden parachutes in a section entitled “Defenses of Control”. Can it be that golden parachutes actually have the opposite effect? A recent study by Professor Eliezer Fich, Ahn Tran, and Ralph Walkling concludes “yes, but”: We show Read more...
The “Usury Permit” – Fact Or Fiction?
The California Constitution covers many things – everything from the right of privacy (Art. I, Sec. 1) to the rate of interest that may be imposed on a loan or forbearance (Art. XV). Occasionally, I’m asked about how to obtain a “usury permit” from the Department of Corporations. In fact, the legislature has inserted several exemptions from the constitutional usury limitations into the Corporate Securities Read more...
The Impact Of The Dodd-Frank Act On California Financial Institutions
Bill Haraf, Commissioner of Financial Institutions, was one of the many witnesses who testified last week at the California legislature’s joint informational hearing entitled “The Dodd-Frank Wall Street Reform and Consumer Protection Act: Initial Reactions, Initial Steps and Likely Impacts”. The California Department of Financial Institutions regulates state chartered banks and credit unions (When I served as Commissioner of Corporations, Read more...
Placement Agent Law Clean-Up Amendments Introduced
As I mentioned in this March 11 posting, Senator Ed Hernandez has introduced a bill, SB 398, that is intended to clean-up some of the many questions arising under legislation, AB 1743, that was enacted last session. In general, AB 1743 requires placement agents for investment funds and advisers seeking access to CalPERS or other California public retirement systems to register as lobbyists. Numerous Read more...
Broker-Dealer Safe Harbor Rule Nears Adoption
In 2007, the California Court of Appeal fired what I called at the time “a shot not heard” when it issued its opinion in People v. Cole, 156 Cal. App. 4th 452 (2007). Seemingly, a key holding of that case was that corporate officers and directors of issuers are required to be licensed as broker-dealers unless they receive a commission Read more...
A Leopard Loses His Spots – AB 361 Is Amended
AB 361 (Huffman) started out life as a spot bill (see discussion of “spot bills” in this post). Assembly Member Jared Huffman has now amended AB 361 to authorize the formation of so-called “benefit corporations”. One proponent of AB 361 has told me that AB 361 is not intended to compete with SB 201 (DeSaulnier) which provides for the organization Read more...
Tune In To Today’s Dodd-Frank Act Hearing
The California Assembly Committee on Banking and Finance will be holding a joint informational hearing with the Senate Committee on Banking and Financial Institutions on the Dodd-Frank Act today at 1:30 p.m. (California time). This hearing is likely to provide a preview on what California will or may be doing in reaction to the Dodd-Frank Act. The heads of Read more...
The DOC – Eppur Si Muove!
On April 11, 2011, the California Department of Corporations will be moving its San Francisco office to: One Sansome Street, Suite 600 San Francisco, CA 94104 In addition to the San Francisco office, Department of Corporations currently has offices in Los Angeles, Sacramento and San Diego. Applications and notices required by any of the laws administered by the Commissioner are Read more...
Bill Aims To Add Bite To Federal Conflict Minerals Disclosure Requirement
Section 1502 of the Dodd-Frank Act added a new Section 13(p) to the Securities Exchange Act of 1934. Section 13(p) requires the SEC to promulgate disclosure and reporting regulations regarding the use of conflict minerals from the Democratic Republic of the Congo and adjoining countries. In compliance with this Congressional mandate, the SEC issued these proposed regulations last December. In Read more...
