California’s Bizarre Voting Records Disclosure Requirement

Some statutes are so poorly drafted that one hardly knows where to begin.  One such statute is Section 711 of the California Corporations Code.  According to the legislature, the purpose of the statute is “to serve the public interest by ensuring that voting records are maintained and disclosed as provided in this section [Section 711]”. 

Before Rapunzel There Was Rudabeh

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In Koehler v. NetSpend Holdings, Inc., 2013 Del. Ch. LEXIS 131 (Del. Ch. May 21, 2013), Vice Chancellor Sam Glasscock III wrote “In fact, NetSpend appears more Rapunzel than Penelope; she must, it seems, let down her hair or go unrequited.”  In a footnote, he attributes the story of Rapunzel to the brothers Grimm (Jacob and Wilhelm).  This

Is The SEC Confused About Who Solicits Proxies?

In reviewing some recent proxy bylaw provisions, I noted that some refer specifically to solicitations “by the Board of Directors”.  See, for example, this bylaw provision recently adopted by Monsanto Company.  This reference to solicitations by the Board of Directors makes some sense in light of the instruction in SEC Rule 14a-4(a) that the form of

Failure To Disclose Finder’s Fee Found Not To Be Actionable

This interesting, but atypical case, involves one of the many possible issues that can arise from the use of unlicensed finders to raise securities. Five years ago, Daniel Azouri met Marvin Lipschultz at the Cannes Film Festival.  Mr. Azouri suggested that Mr. Lipschultz invest in a movie venture.  Mr. Lipschultz invested a total of $220,000

Nevada To Allow Corporations To Stiff Charon

Unsuccessful corporations often fall into an eternal desuetude.  Having nothing, no one wants to pay the Secretary of State to complete their dissolution.  Because they don’t file the required annual lists and pay the annual fees, their charters are revoked.   They then become like those poor souls with no coin for Charon, they cannot complete the journey to complete

June 30 Deadline Looms For Foreign Lending Institutions

California Corporations Code Section 191(d) provides that a “foreign lending institution” will not be considered to be “doing, transacting or engaging in business” in California solely by reason of engaging in specified categories of activities.  Those activities include, for example, the ownership of loans and the enforcement of loans.  Based on this statute, some foreign lending

Should Directors Be Required To Have Valid Passports?

Lately, I’ve had occasion to think about director qualifications.  Section 212(b)(4) of the California Corporations Code permits the bylaws to to specify the qualifications of directors.  In Section 141(b),the Delaware General Corporation Law similarly authorizes the certificate of incorporation or bylaws to prescribe director qualifications.  Qualifications should be appropriate to the corporation’s business and purpose.

Nevada Set To Boost Business Fees For Domestic And Foreign Corporations By 150%

Last week, the Nevada legislature passed what the Reno Gazette-Journal has branded as the state’s “largest-ever tax increase”.  Although the state’s legislative website does not yet list the bill as having been approved by Governor Brian Sandoval, the Governor’s office released this laudatory statement concerning the legislation. Nevada corporations and foreign corporations transacting business in Nevada will encounter

Could This Really Be The Origin Of Due Process?

On Monday, I wrote about the upcoming 800th anniversary of the Magna Carta.  The California Assembly recently took note of the upcoming octocentennial and is considering adoption of a commemorative concurrent resolution.  The resolution, ACR 76, provides a fairly accurate description of the historical events and key clauses of the Magna Carta.  However, I do

Why The WSJ Is Wrong About SEC Rulemaking On Claw backs

As noted by Broc Romanek, The Wall Street Journal yesterday announced: The Securities and Exchange Commission will soon propose long-awaited rules forcing companies to claw back, or revoke, some of their top officials’ incentive pay if they have to restate the financial results that led to it, according to people familiar with the agency’s internal