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CALIFORNIA CORPORATE & SECURITIES LAW

Oracular Utterances From California’s Civil Code

In prior posts, I’ve mentioned the Etruscans who were the northern neighbors of the Latins and the erstwhile kings of Rome.  The last of these kings was Tarquinius Superbus, also known as Tarquin the Proud.  According to the ancient sources, Tarquinius Superbus was induced, or tricked, into buying a set of books (actually scrolls) from the Sybil…

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Federal Court Applies California Privilege Law To Delaware Corporation

Lawyers often speak of the attorney-client privilege in the singular as if there is only one privilege.  Given the multiplicity of fora in which actions may be brought, it is best to think in the plural.  There are many versions of the attorney-client privilege and the one that is applied to your case may not be the one that…

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Fee Shifting Bylaw Provisions May Face Constitutional Limitation

The corporate governance world has been disquieted by Delaware Supreme Court Justice Carolyn Berger’s recent opinion that upheld the validity of a fee-shifting bylaw provision in the bylaws of a Delaware non-stock corporation.  ATP Tours, Inc. v. Deutscher Tennis Bund (No. 534, 2013, May 8, 2014).  Even though the ink has barely dried on the opinion,…

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This International Shoe Doesn’t Fit: Subsidiary May Not Be Parent’s Agent

Is a wholly-owned subsidiary per se an agent of the parent?  In an opinion issued yesterday, the Nevada Supreme Court answered “not necessarily”.  The legal issue was whether the German parent of a Delaware corporation doing business in Nevada was subject to the jurisdiction of the Nevada courts.  Viega GMBH v. Eighth Judicial Dist. Court, 130…

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DBO Filing Procedures Set To Change Big Time

When I joined the Department of Corporations, it had no website and filings were made only in hard copy.  In the ensuing years, the Department (now known as the Department of Business Oversight) created a website, established system for filing notices of exemption under Section 25102(f) online, and provided online access to securities and franchise filings.  See California’s Big…

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CalPERS Allowed To Continue Rating Agency Suit

In 2009, the California Public Employees’ Retirement System filed a lawsuit alleging negligent misrepresentation and negligent interference with prospective economic advantage against Moody’s Investors Services, Inc., Moody’s Corporation and The McGraw-Hill Companies, Inc.  The defendants filed a special motion to strike the complaint under California’s anti-SLAPP statute, Cal. Code Civ. Proc. § 425.16.  The trial…

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An Epic Question: Is This Pay Ratio Too Large, Too Small or Just Right?

California’s corporate tax rate is currently 8.84%.  According to the California Taxpayer’s Association, only nine states (Alaska, Connecticut, Illinois, Iowa, Maine, Minnesota, New Jersey, Pennsylvania and Rhode Island) have a higher top rate.  Nonetheless, a bill that could increase the corporate tax rate for some publicly traded corporations by over 47% continues to move through the…

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Delaware Court Rules Nevada Law Governs But Applies Delaware Law

Although there are many significant differences between the corporate laws of Nevada and Delaware, the Nevada Supreme Court has often looked across the country to Delaware.  Thus, the Nevada high court has adopted Delaware’s test for demand futility articulated in Aronson v. Lewis, 473 A.2d 805 (Del. 1984) (overruled in part on other grounds by Brehm v. Eisner,…

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Looking For The List Of OTC Margin Stocks? You’ll Find It In California’s New LLC Act

When originally enacted, the Securities Exchange Act of 1934 banned brokers and dealers from extending margin credit on over-the-counter (OTC) securities.  This changed in 1969 when the Exchange Act was amended.  The Federal Reserve determined which stocks could be margined and it began publishing in the Federal Register the Official List of OTC Margin Stocks.  However, if you…

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Are Proper Names In A Language?

My last name is Bishop.  In Spanish, it would be Obispo.  If I included Obispo in a corporate name, would that be acceptable to the Secretary of State? Nevada has a statute, NRS 78.028 that provides “No record which is written in a language other than English may be filed or  submitted for filing in the…

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