Ouch! Proxy Statement Argues That Resolving Dispute In California Court Was “Costly And Time Consuming”

As Ralph Waldo Emerson once famously told Oliver Wendell Holmes, Jr.: ““Holmes, when you strike at a king, you must kill him.”  For the full story, see The Corporations Code Can Make Suing Your Former Employees Costly.  I was reminded of this advice when reading the following in the proxy statement of a California-based company in favor

Which Code Applies When A Stock Certificate Has Been Lost, Destroyed Or Wrongfully Taken?

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Earlier this week, I wrote about Judge Edward M. Chen’s ruling in Sender v. Franklin Res., Inc., 2015 U.S. Dist. LEXIS 171453, 3-4 (N.D. Cal. Dec. 22, 2015).  Judge Chen applied California Corporations Code Section 419 to a Delaware corporation on the basis that the replacement of a lost or stolen stock certificate was not governed

Replacement Of Lost Stock Certificate Is Not An Internal Affair, But So What?

U.S. District Court Judge Edward M. Chen recently ruled that a stockholder could maintain an action under California Corporations Code Section 419 for replacement of a lost, stolen or destroyed certificate.  As just described, the ruling shouldn’t be a surprise.  Section 419 provides that if “a corporation refuses to issue a new share certificate or other certificate in

Which Comes First, Rescission Or Choice Of Forum?

A recent ruling by U.S. District Court Judge Arthur D. Spatt raises the interesting question of whether a choice of law provision can be vitiated by rescission.  The case, Hatteras Enterprises, Inc. v. Forsythe Cosmetic Group, Ltd., 2016 U.S. Dist. LEXIS 100352 (July 30, 2016), involved six separate agreements, each containing a New York choice of law

What Law Governs A Foreign General Partnership?

The California Uniform Partnership Act of 1994 defines a “partnership” to mean “an association of two or more persons to carry on as coowners a business for profit formed under [Cal. Corp. Code] Section 16202, predecessor law, or comparable law of another jurisdiction . . .”.  Cal. Corp. Code § 16101(9).  The California act does not define

Three Questions To Ask Before Incorporating In Delaware

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In the business world it was once commonly said that “no one ever was fired for buying IBM”.  Given Delaware’s preeminent market share, the same thinking may underlie a recommendation to incorporate there.  Before making that recommendation, I encourage you to consider the following three questions: Does the corporation want to pay a lot more money in

What Does Americold Realty Trust Have To Do With Rule 147?

Under Article III, Section 2 of the U.S. Constitution, the judicial power of the federal courts may extend to, among other things, controversies between citizens of different states.  When a party is a trust, in what state is the trust a citizen for purposes of the diversity jurisdiction of the federal courts?  There are several

What’s The Proper Interval Between Annual Meetings?

I enjoyed participating in the “Hot Issues For Your Annual Meeting” webcast yesterday.  My comments were largely focused on California and Nevada corporate law.  Roxanne Houtman of Potter Anderson Corroon LLP covered Delaware law.  Among other things, we discussed what happens when a corporation fails to hold an annual meeting of shareholders.  Although all three states provide

Section 11 Class Actions And The Magna Carta

If you had a dispute in Medieval England, it would likely be heard in the court of the local baron.  Some disputes, however, caught the interest of the monarch and would be heard in a royal court.  In the twelfth century, King Henry II instituted royal justice throughout England.  As might be expected, controversies arose

Advising Antigone – What Would You Do?

This weekend, I plan to see The Antigone Project, an adaptation of Sophocles’ fifth century B.C.E. play, Antigone.  The play is about Antigone who is the daughter and sister of Oedipus (a man, according to Tom Lehrer, with an “odd complex”) and his mother, Jocasta.  Antigone has two other brothers, Eteocles and Polynices, who go to