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CALIFORNIA CORPORATE & SECURITIES LAW

Did The SEC Really Have Good Cause To Grant Accelerated Approval Of Amendments To NYSE Rule 452?

On September 9, 2010, the Securities and Exchange Commission granted accelerated approval of the New York Stock Exchange’s proposed amendments to Rule 452.   Echoing the Queen of Hearts (“Sentence first – verdict afterwards”), the SEC at the same time announced that it was soliciting comments on the “proposed” rule change.  The NYSE proposed the rule to meet…

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Massey Energy Loses Bid To Eliminate Cumulative Voting

I’ve recently commented CalPERS’ announcement that it would abstain on a proposal by Massey Energy Company to eliminate cumulative voting.  Yesterday, Massey Energy reported in this Form 8-K that its stockholders did not approve the proposal.  The company reported that there were 75,341,383 votes cast for the proposal, 3,967,341 votes cast against the proposal, 564,215…

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“It’s Dark as a Dungeon Way Down in the Mines” – CalPERS Declines to Vote Against Massey Energy Co. Proposal

Last week, I expressed surprise in this post about the California Public Employees Retirement System’s recent announcement that it plans to abstain on a proposal by Massey Energy Company to jettison cumulative voting.  My surprise was based on the fact that Government Code Section 6900 specifically and unequivocally requires CalPERS and other state agencies to vote in favor of cumulative voting. …

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CalPERS and Cumulative Voting

California has a strong historical bias in favor of cumulative voting in the election of directors.  In fact, California’s 1879 Constitution enshrined cumulative voting as a constitutional right.  Cal. Const. of 1879, Art. XII, § 12 (repealed).  The 1931 California General Corporation Law continued mandatory cumulative voting.  When the current California General Corporation Law was introduced,…

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Don’t Be a Dummy – Measuring Shareholder Voting Power

John F. Banzhaf III is a law professor who in the 1960s became interested in voting and voting power.  See Weighted Voting Doesn’t Work: A Mathematical Analysis, 19 Rutgers Law Review 317 (1965).  In ensuing years, Professor Banzhaf has attracted controversy for his anti-smoking and anti-obesity activism. Determining voting power is key to knowing where…

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There Is No Alter Ego Liability When The Creditor Knows There Is No Corn In the Husk

Ok, I admit Fusion Capital Fund II, LLC v. Ham, 2010 U.S. App. LEXIS 15962 (Aug. 2, 2010) does not deal with California law.  The case caught my eye because it isn’t all that often that you see an opinion interpreting Nevada corporate law written by Chief Judge Frank Easterbrook and joined by Judges Richard A. Posner and Michael…

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Proxy Access and Majority Voting

According to TheCorporateCounsel.net yesterday, the Security and Exchange Commission’s proxy access rules were published yesterday in the Federal Register – thereby starting the clock on the effectiveness of the rules. In complying with proxy access, California companies should think about the interplay between Corporations Code § 708.5  and proxy access.   Section 708.5 was added to the Code a few…

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Will the “Real” Directors Please Take Your Seats?

As discussed in this earlier post, the Securities and Exchange Commission’s new proxy access requirements will likely bring attention to director qualification requirements.   The California General Corporation Law does not require that a person satisfy any particular qualification requirements to hold office as a director.  The bylaws may, however, impose qualification requirements.  Cal. Corp. Code § 212(b)(4).   These qualifications…

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Want to Nominate a Director Today? Here’s How

The Securities and Exchange Commission’s new proxy access requirements are garnering a great deal of attention even though those rules have yet to take effect.  In the meantime, you can still nominate a candidate for election as a director by sending an email to: DiverseDirectorDatabase@calpers.ca.gov. No, this won’t necessarily get your candidate in any company’s…

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Director Qualification Requirements, Nominations & Proxy Access

As discussed in this earlier post, the SEC’s proxy access rule amendments will soon require many publicly traded companies to include shareholder nominees in their proxy statement and proxy cards.  This rule may reignite old questions about how to handle director qualification requirements. Some 131 pages into the 451 page adopting release, the SEC makes…

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