There’s Something About Section 800 And ISS Adds Panelist
What’s So Different About Section 800? California Corporations Code Section 800 governs derivative lawsuits. Yesterday, I wrote about the fact that the California legislature has made Section 800 expressly applicable to foreign corporations (as defined in Section 171). Is this an academic point or can it matter? One key difference may be that Section 800(c) allows the corporation or any Read more...
Choice Of Law And Derivative Suits
The California Corporations Code carefully defines the the terms “corporation” (Section 162), “domestic corporation” (Section 167), “foreign corporation” (Section 171); and “foreign association” (Section 170). For example, when the legislature provided in Section 1500 that “[e]ach corporation shall keep adequate and correct books and records . . . “, the legislature imposed a mandatory obligation (See Section 15 as to Read more...
Court Rules Choice Of Law Provision Takes Precedence Over Internal Affairs Doctrine
To say that the Delaware courts and bar are very fond of the internal affairs doctrine is about as controversial as wearing white before Labor Day. If you have any doubts about the sacred status of the doctrine in Delaware, I refer you to the Delaware Supreme Court’s decision in Vantagepoint Venture Partners 1996 v. Examen, Inc., 871 A.2d 1108 (2005). Read more...
Common Shares Are Commonplace And, In California, Well Defined
Corporate lawyers are very familiar with the terms “common” and “preferred” in describing classes of corporate stock. The use of these terms is so habitual that many lawyers may be unaware that the California legislature has taken the time to define them. ”Common shares” are shares that “have no preference over any other shares with respect to distribution of assets Read more...
Federal Judge Refuses To Find That California “Can Have No Real Interest” In Loans Closed Out Of State
The geographic reach of California’s statutes continues to be tested in the courts. In a recent class action lawsuit challenging the defendants’ mortgage marketing and sales practices, the plaintiffs sued under, among other statutes, California’s unfair competition law, Business & Professions Code Section 17200. Interestingly, the plaintiffs are residents of South Carolina and their loan was secured by property in that Read more...
California’s 50/90 Rule – When Being In Control May Mean That You’re Not
Many out-of-state practitioners are surprised to learn that California has special statutory provisions governing a merger when a constituent corporation (Section 161) or its parent (Section 175) owns, directly or indirectly, more than 50% of the voting power (Section 194.5) of the other constituent corporation prior to the merger. This is the so-called “50/90 Rule”. It can be found in the last sentence of Section 1101. Under Read more...
California Comments On Crescent City Corporate Conference
Last week, I attended the 23rd Annual Corporate Law Institute sponsored by Tulane University Law School. Here are some notes. Who Came The Institute drew a crowd of nearly 400 people, including about two dozen reporters. Reportedly, Bloomberg, Reuters, The Wall Street Journal and others had representatives attending the Institute. Who Spoke The panels were excellent, featuring Delaware Supreme Court Read more...
Foreign Corporations Are Subject To California’s Statutes Requiring Disclosure of Voting Results
In 2009, the Securities and Exchange Commission amended Form 8-K to require reporting companies to report shareholder voting results within four business days. How do shareholders in private companies get access to this information? While it seems likely to me that most states would allow shareholders to obtain this information pursuant to general common law or statutory inspection rights, California Read more...
Another Fissure In The Internal Affairs Doctrine?
In this post from last November, I mentioned two New Jersey decisions applying New Jersey law rather than the law of the state of incorporation. Krzastek v. Global Resource Industrial & Power, Inc., No. A-1815-06T2 (N.J. Super. Ct. App. Div. Sept. 11, 2008) and Conway v. DialAmerica Marketing, Inc., No. BER-C-116-08 (N.J. Super. Ct. Ch. Div. Sept. 30, 2008). Last Read more...
