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CALIFORNIA CORPORATE & SECURITIES LAW

Want A Fairness Hearing But Paying In Cash – No Problem?

In yesterday’s post, I mentioned California Corporations Code Section 1001(d).  That statute imposes a super-majority shareholder approval requirement for sale of assets transactions covered by Section 1001(a) when the acquiring entity is in “control” of or under common control with the corporation disposing of the assets.  The vote required is 90% of the voting power of the disposing corporation.  “Control”…

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When a Sale of Assets is not a “Sale-of-Assets Reorganization”

The California General Corporation Law (CGCL) contemplates three different types of reorganizations – a merger reorganization, an exchange reorganization, and a sale-of-assets reorganization.  Cal. Corp. Code § 181.  Chapter 12 of the CGCL prescribes both board and shareholder approval requirements for reorganizations, including sale-of-asset reorganizations. Readers of the CGCL, however, will note that Corporations Code…

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The Internal Affairs Doctrine – California May Not Be Standing Alone

Delaware lawyers undoubtedly regard the Delaware Supreme Court’s decision in VantagePoint v. Examen, Inc., 871 A. 2d 1108 (Del. 2005) as the last word on the internal affairs doctrine.  In that case, the Delaware Supreme Court held that the internal affairs doctrine trumps a California statute, Corp. Code § 2115, imposing specified provisions of the California General Corporation Law…

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Will Delaware Exclusive Forum Bylaws Founder on the CGCL’s Rocks?

Many practitioners took note last spring when Vice Chancellor Laster wrote “if boards of directors and stockholders believe that a particular forum would provide an efficient and value-promoting locus for dispute resolution, then corporations are free to respond with charter provisions selecting an exclusive forum for intra-entity disputes.”  In Re Revlon, Inc. S’holders Litig.  Since then,…

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What Is, What Will Be & What’s Passed – The CCR, Z-Register & Register

The California Office of Administrative Law issues three different publications that are easily confused.  However, it is useful to know the differences. The California Code of Regulations (aka the “CCR”) is the compendium of regulations adopted by state agencies in compliance with the California Administrative Procedure Act.  Thus, the CCR is the place to check…

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SEC Relies On Questionable Legislative History In Proposed VC Definition

I’m still cogitating on the Securities and Exchange Commission’s definition of “venture capital fund” that it proposed last Friday in Release No. IA-3111.  Here are some first impressions. The SEC considered California’s definition of “venture capital companies” in 10 CCR § 260.204.9 but felt that California’s rule was inconsistent with Congressional intent because the California…

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Defining “Venture Capital Fund” Is “No Small Task”

Today, the Securities and Exchange Commission proposed a definition of “venture capital fund” for purposes of the new exemption from investment adviser registration under the Investment Advisers Act of 1940.  This new exemption was created by Section 407 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.  Congress gave the SEC one year to issue…

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In California, Francois Mitterrand’s Last Meal Would Not Have Been A Canary

Yesterday, I wrote about a California State Board of Equalization regulation, 18 CCR § 1587, which solemnly declares that canaries are not food animals.  I then recalled that Francois Mitterand’s last meal was a small bird, the Ortolan Bunting, that was drowned in Armagnac, cooked and eaten whole.  Here’s an NPR story about the late French President’s…

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Time To Reevaluate The Meaning Of Director Qualifications

In 2003, the Securities and Exchange Commission began requiring companies to disclose “any specific, minimum qualifications that the nominating committee believes must be met by a nominating committee-recommended nominee for a position on the company’s board of directors, and a description of any specific qualities or skills that the nominating committee believes are necessary for…

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It’s Official In CA – Don’t Even Think About Your Canary As Food!

I deal with regulations all day long.  Most of them are absolutely somniferous.  However, every once in a while I come across a regulation that is so unexpected that I can’t help but wake up, rub my eyes and stare in wonderment. A few months ago, I wrote this post about one such regulation.  That…

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