Are Consultant’s Employees Functionally Equivalent To Client’s Employees?

As a general matter, the attorney-client privilege is waived by disclosing a communication to a third party.  When a corporation hires an investment banker, the corporation’s attorneys will frequently communicate with employees of the investment banker.  Are those communications protected by the attorney-client privilege or do those communications waive the privilege?  U.S. Magistrate Judge George

Where To Meet? The Answer May Have Surprising Consequences

In my experience, companies most often hold board and shareholder meetings at or near their principal executive offices.  As a result, many corporations hold their meetings in California even though they may be incorporated in Delaware, Nevada or some other jurisdiction.  Geographical convenience, however, can have unforeseen consequences.  Several provisions of the California General Corporation

You Might Be Surprised By These Words In Magna Carta

I’m continuing my desultory study of the Magna Carta, which marked its 800th birthday last June.  Although the original charter was written in Latin, my occasional efforts at translation has made me keenly aware that it uses many words that although still common no longer have the same meanings.  Below are three words whose meanings

Corporation Owes No Duty To Warn Former Director Of Impending Option Expiration

Does a corporation commit constructive fraud if it fails to warn a former director of the impending expiration of a stock option?  That was one question decided earlier this month by Judge Jennifer A. Dorsey in  Nelson v. FluoroPharma Med., Inc., 2016 U.S. Dist. LEXIS 1270 (D. Nev. Jan. 4, 2016).  In granting summary judgment for the

Resource Extraction Rule: SEC Puts More Time On The Clock

In July 2010, Congress ordered the Securities and Exchange Commission to adopt a resource extraction rule within 270 days (i.e., by April 17, 2011).  The SEC did not adopt rules until August 22, 2012, missing the Congress’ deadline by 1 year, 4 months and 2 days (or a total of 490 days).  In 2013, however, the U.S. District Court

A Not So Frequently Asked Question – When Is An Event Infrequent?

Last January, the Financial Accounting Standards Board, which is better known as the FASB, issued Accounting Standards Update 2015-01.  The update eliminates the concept (and definition) of “extraordinary item”.  According to the FASB, the update is part of its “initiative to reduce complexity in accounting standards”.  I wish the FASB the best of luck in that Sisyphean task. Although

Can A Corporation Be A Citizen Of California?

Notwithstanding the brouhaha engendered by Citizens United v. FEC, 558 U.S. 310, 394 (U.S. 2010) , the idea that corporations are “persons” can be found in numerous California statutes, including California Corporations Code Sections 18 (“‘Person’ includes a corporation as well as a natural person”); 15901.02(y) (“‘Person’ means an individual . . . corporation . . .”); and

Court Holds SEC Filing Is Not Public Disclosure

California has patterned its false claim law, Cal. Gov’t Code §§ 12650 et seq., after the federal False Claims Act.  As the names of these laws suggest, they are intended to protect the public fisc from false or fraudulent claims.  The CFCA empowers private parties to pursue actions for, and in the name of, the

Choosing Delaware, Instead Of California Law, May Prove Very Costly Indeed!

Last spring, I had the pleasure of meeting Delaware Supreme Court Justice Karen Valihura when we were speaking at the Los Angeles County Bar Association’s annual Delaware & California Law Update.  Given her visit to California, I was interested in her mention of California law in SIGA Techs., Inc. v. Pharmathene, Inc., 2015 Del. LEXIS 678 (Del. Dec. 23, 2015). 

Indemnity Agreements: Res Gestae Atque Gerendae

Can someone be indemnified against an unlawful act?  California Civil Code Section 1668 would seem to say “no”: All contracts which have for their object, directly or indirectly, to exempt any one from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or