The Delaware Court Of Chancery’s Not So Exclusive Jurisdiction

Section 145(k) of the Delaware General Corporation Law is quite clear and emphatic about which court may hear actions for indemnification or advancement of expenses: The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw,

Officers And The Internal Affairs Doctrine

My guess is that most attorneys would say that the duty of an officer to the corporation are governed by the law of the state of incorporation under the “internal affairs doctrine”.  As explained by the U.S. Supreme Court, the “internal affairs doctrine” is a conflict of laws principle that “recognizes that only one State should

Unwaivable Statutes May Doom Forum Selection Provision

Nearly four years ago, I wrote this post asking whether California’s anti-waiver statute voids choice of forum agreements.  The statute in question was California Corporations Code Section 25701 which provides: Any condition, stipulation or provision purporting to bind any person acquiring any security to waive compliance with any provision of this law or any rule

Court Of Appeals Holds No ERISA Preemption Of Section 419(b)

The Ninth Circuit Court of Appeals’ recent holding in Sender v. Franklin Res., Inc., 2015 U.S. App. LEXIS 10113 (9th Cir. Cal. June 16, 2015) is reasonably clear and yet there is much about the case that puzzles me. The case involved the seemingly quixotic quest of Mr. Sender to obtain stock certificates that he allegedly

Study Concludes That California’s Lending Laws Are Number One


In a recently published paper, Colleen Honigsberg, Sharon P. Katz, and Gil Sadka examine the relationship between debt contracts and state law.  Perhaps only Captain Renault will be shocked by their finding that “California represents the most pro-debtor state and New York the most pro-lender.”  They also note that “the states with the most pro-lender law

Welcome To California: No Foreign Corporations Need Apply

California continues to hemorrhage corporate charters to Delaware and Nevada.  The most recent potential emigrant is SJW Corp. which filed this proxy statement last week seeking shareholder approval of a reincorporation from California to Delaware.  Can California and other states stanch the flow by offering licenses only to domestic corporations? Surely, there must be some

Court Of Chancery Rejects Delaware Choice Of Law

The public policies of California and Delaware both espouse freedom.  Ironically, the freedoms that they espouse are antithetical to each other.  California embraces the freedom of people to pursue any lawful and employment of his or her choice.  Hence, Section 16600 of the California Business & Professions Code declares, with narrow exceptions, covenants not to

Court Of Appeal Decides Against Arbitration Bylaw Amendment

Much has been written of late about the enforceability of exclusive forum bylaws.  What happens when the forum isn’t a court, but an arbitration?  Does it make any difference if the arbitration bylaw is adopted after a dispute has arisen?  The Fourth District Court of Appeal tackled these questions in an opinion issued yesterday.  Cobb

Do Some Companies Already Have Fee-Shifting Provisions (And Not Know It)?

A lot of folks these days are arguing and writing about fee-shifting bylaws as if they were some kind of novel and sudden irruption, like Athena bursting from Zeus’ skull.  This overlooks the existence of fee-shifting provisions in a myriad of existing contracts.  Arguably, some of these provisions may already applicable to derivative plaintiffs. When it comes to attorney’s

Forum Selection Clauses Were Here Before They Were In Bylaws

Recent rulings by judges in Delaware and other states have given impetus to the adoption of exclusive forum bylaws.  To the casual observer, the idea might seem entirely novel.  But as Koheleth (the Gatherer) wrote “What has been is what will be, and what has been done is what will be done, and there is