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CALIFORNIA CORPORATE & SECURITIES LAW

A Modern Council Of Nicaea – Supreme Court Hears Oral Arguments In Janus Today

In this September post, I compared the petitioner’s arguments in Janus Capital Group, Inc.v. First Derivative Traders to the Arian controversy debated at the Council of Nicaea.  Today, the Supreme Court will hear oral arguments on the case.  If you are interested in reading up on the arguments, you can find links to the briefs…

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What Do It [§ 25501.5] Mean?

I’ve received several responses to my post last week concerning the meaning of California Corporations Code Section 25501.5.  Alan Parness, Chairman of the ABA Business Law Section’s Committee on State Regulation of Securities, observes that the remedies of rescission or damages can be “legislative overkill”.  He notes that investors will typically pursue these remedies only…

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Department of Corporations Invites Comment on Adviser Rules

This morning, the California Department of Corporations issued this Invitation For Comments with respect to its investment adviser rules.  The Department had proposed an “omnibus” revision to its investment adviser regulations way back in 2007.  Unfortunately, events, including changes to the Securities and Exchange Commission’s investment adviser rules, have overtaken that proposal.  The Department is seeking comment on the…

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Section 25501.5 – What Do It Mean?

In 2004, the California Legislature added Section 25501.5 to the Corporate Securities Law of 1968.  Ever since then, I’ve been asked “What do it mean?” Corporations Code Section 25501.5 generally authorizes an action for rescission (or damages, if the security is no longer owned) by any person “who purchases a security from or sells a security to a broker-dealer…

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Fairness Hearings: Not Just For Reorganizations

California attorneys are fortunate to have a wealth of resources at their disposal.  One of these treasures is the Continuing Education of the Bar – California (CEB).  The University of California and the State Bar of California founded CEB more than 60 years ago.  CEB is, however, self-supporting.  Among numerous other publications, the CEB publishes…

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Want A Fairness Hearing But Paying In Cash – No Problem?

In yesterday’s post, I mentioned California Corporations Code Section 1001(d).  That statute imposes a super-majority shareholder approval requirement for sale of assets transactions covered by Section 1001(a) when the acquiring entity is in “control” of or under common control with the corporation disposing of the assets.  The vote required is 90% of the voting power of the disposing corporation.  “Control”…

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When a Sale of Assets is not a “Sale-of-Assets Reorganization”

The California General Corporation Law (CGCL) contemplates three different types of reorganizations – a merger reorganization, an exchange reorganization, and a sale-of-assets reorganization.  Cal. Corp. Code § 181.  Chapter 12 of the CGCL prescribes both board and shareholder approval requirements for reorganizations, including sale-of-asset reorganizations. Readers of the CGCL, however, will note that Corporations Code…

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The Internal Affairs Doctrine – California May Not Be Standing Alone

Delaware lawyers undoubtedly regard the Delaware Supreme Court’s decision in VantagePoint v. Examen, Inc., 871 A. 2d 1108 (Del. 2005) as the last word on the internal affairs doctrine.  In that case, the Delaware Supreme Court held that the internal affairs doctrine trumps a California statute, Corp. Code § 2115, imposing specified provisions of the California General Corporation Law…

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Will Delaware Exclusive Forum Bylaws Founder on the CGCL’s Rocks?

Many practitioners took note last spring when Vice Chancellor Laster wrote “if boards of directors and stockholders believe that a particular forum would provide an efficient and value-promoting locus for dispute resolution, then corporations are free to respond with charter provisions selecting an exclusive forum for intra-entity disputes.”  In Re Revlon, Inc. S’holders Litig.  Since then,…

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What Is, What Will Be & What’s Passed – The CCR, Z-Register & Register

The California Office of Administrative Law issues three different publications that are easily confused.  However, it is useful to know the differences. The California Code of Regulations (aka the “CCR”) is the compendium of regulations adopted by state agencies in compliance with the California Administrative Procedure Act.  Thus, the CCR is the place to check…

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