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CALIFORNIA CORPORATE & SECURITIES LAW

Why Lincoln Was Wrong About A House Divided (At Least In The UK)

On Wednesday, June 16, 1858, delegates of the Republican State Convention of Illinois gathered in Representatives’ Hall in Springfield.  At about 5:00 p.m., delegate Charles L. Wilson submitted the following resolution: Resolved, that Abraham Lincoln is the first and only choice of the Republicans of Illinois for the United States Senate, as the successor of Stephen A.…

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Officers: Got Business Judgment Rule? Nevada Says Yes, Delaware Maybe Not

Francis Pileggi writes about a recent ruling by U.S. District Judge Sue L. Robinson in which she refused to consider whether the business judgment rule applied to officers of a Delaware corporation: Defendants have cited to no cases where a Delaware court has held that the business judgment rule applies to corporate officers; therefore, the court…

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How This Scotus Became A Byword For Dunce

The Supreme Court of the United States is sometimes referred to by the initialization – SCOTUS – as in the well regarded SCOTUSblog.  Scotus is also a name attached to one of the most famous scholars of the High Middle Ages – John Duns Scotus.   Humanist philosophers, however, later derided Scotus’ scholasticism and made his name a byword for someone who…

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NASAA Releases 2015 Enforcement Report

State securities regulators serve an important local enforcement function.  In fact, state securities regulation precedes federal regulation by more than two decades.  The North American Securities Administrators Association is an association of state, provincial and territorial securities regulators from the 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico, Canada, and Mexico.…

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Which Do You Use: Decisionmaking, Decision Making, or Decision-Making?

Recently, UCLA Law School Professor Stephen Bainbridge wrote about his allegiance to writing “decision making” as two words.  In support, he cites the Chicago Manual of Style.  I think that the Manual actually makes a distinction based on usage.  When the compound is used as a noun, the two words are separate (e.g., “future decision making by lenders and homeowners”…

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Inspecting The Shareholder List

Section 1600(a) of the California General Corporation Law establishes the “absolute right” of a shareholder or shareholders to inspect the shareholder list.  To be eligible to exercise this right, the shareholder or shareholders must hold at least: 5% in the aggregate of the outstanding voting shares of the corporation; or 1% of those voting shares and…

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Designated Lender’s Counsel

Doug Cornelius at Compliance Building writes today about borrowers paying the legal fees of lender’s counsel: Of course there is a conflict with the law firm. That too is a conflict that has been in place for decades. The bank’s lawyers know they represent the bank. They also know the borrower is paying their bill. Until…

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What, If Anything, Is Wrong With The Contractual Obligations Table?

Many readers will recognize the table above as being required by Item 303(a)(5) of Regulation S-K.  The Securities and Exchange Commission added this disclosure requirement in 2003, explaining in the adopting release: Aggregated information about a registrant’s contractual obligations in a single location will provide useful context for investors to assess a registrant’s short- and…

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Are California Statutes Authorizing Desist And Refrain Orders Facially Unconstitutional?

In December 2008, the Commissioner of Corporations issued a desist and refrain order based on alleged violations of the Corporate Securities Law and the Finance Lenders’ Law.  Nearly seven years later, the respondents challenged the order by filing a complaint in the U.S. District Court.  The complaint included four causes of action: (1) violation of…

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Court Holds Extrinsic Evidence Was Inadmissible

As generally understood, the parol evidence rule prohibits the introduction of extrinsic evidence to alter, vary or add to the terms of an integrated agreement.  “Parol” is derived from the French word, “parole” meaning speech.  The parol evidence rule came into being as society became increasingly literate.  It was then that the written word began…

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