Where To Meet? The Answer May Have Surprising Consequences

In my experience, companies most often hold board and shareholder meetings at or near their principal executive offices.  As a result, many corporations hold their meetings in California even though they may be incorporated in Delaware, Nevada or some other jurisdiction.  Geographical convenience, however, can have unforeseen consequences.  Several provisions of the California General Corporation

Can A Corporation Be A Citizen Of California?

Notwithstanding the brouhaha engendered by Citizens United v. FEC, 558 U.S. 310, 394 (U.S. 2010) , the idea that corporations are “persons” can be found in numerous California statutes, including California Corporations Code Sections 18 (“‘Person’ includes a corporation as well as a natural person”); 15901.02(y) (“‘Person’ means an individual . . . corporation . . .”); and

Choosing Delaware, Instead Of California Law, May Prove Very Costly Indeed!

Last spring, I had the pleasure of meeting Delaware Supreme Court Justice Karen Valihura when we were speaking at the Los Angeles County Bar Association’s annual Delaware & California Law Update.  Given her visit to California, I was interested in her mention of California law in SIGA Techs., Inc. v. Pharmathene, Inc., 2015 Del. LEXIS 678 (Del. Dec. 23, 2015). 

CA Court Holds No Fiduciary Duty To Warrant Holders

Judges must perforce pick and choose from the record what facts to include in their written opinions.  As a result, opinions don’t necessarily tell the whole story and may omit important details.  Recently, for example, I read a blog post by Kevin M. LaCroix entitled “Blog Post Statements Held Actionable Under the Federal Securities Laws“.  When I read

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

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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