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CALIFORNIA CORPORATE & SECURITIES LAW

Bill Aims To Vary Corporation Tax Rate Based On Pay Ratio

If Senator DeSaulnier gets his way, the SEC’s Summary Compensation Table could cost some corporations a lot of money.  His bill, SB 1372, would if enacted change the corporation tax rate for publicly traded corporations, including wholly owned subsidiaries, according to the following ratio of (i) the greater of the chief operating officer or highest paid…

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CalPERS Declares Wall Street Journal Wrong

Earlier this month, The Wall Street Journal published an opinion piece challenging a recent study by the California Public Employees’ Retirement System: The California Public Employees’ Retirement System has a well-deserved rap as a taxpayer drain.  So to rehabilitate its image, the pension fund has produced a “study” purporting that public-worker pensions are California’s biggest jobs generator.…

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Is It Necessary To Check With The Shareholders Before Hocking The Corporate Crown Jewels?

Corporations Code Section 1001(a) authorizes a corporation to “sell, lease, convey, exchange, transfer, or otherwise dispose of all or substantially all of its assets” if the principal terms are approved by the board, and, unless the transaction is in the usual and regular course of its business, approved by the outstanding shares.  While this suggests…

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DBO Issues Guidance Regarding Virtual Currencies And Asks For Comments On Proposed Money Transmission Rules

Yesterday, the Department of Business Oversight issued this cautionary guidance for consumers regarding virtual currencies.  However, amidst the warnings, the Department disclosed that “California has been working with virtual currency industry leaders and other state and federal regulators to evaluate businesses engaging in virtual currency transactions for possible licensing.” A few weeks back, the Department also…

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Why October 1, 2014 Is An Important Date For Management Persons Of Nevada Entities

Two years ago, the Nevada Supreme Court in an en banc decision held that a state district court may exercise jurisdiction over the nonresident officers and directors of a Nevada corporation with its principal place of business in Spain.  Consipio Holding, BV v. Carlberg, 282 P.3d 751 (Nev. 2012).  The Supreme Court reasoned When officers…

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Is This Proposed Amendment To Delaware’s Stockholder Consent Statute Really Needed?

Recently, I wrote about a proposal to amend Section 141(f) of the Delaware General Corporation Law to permit inchoate directors to take action by written consent.  The Corporation Law Section of the Delaware State Bar is proposing a parallel amendment to Section 228(c) of the DGCL to allow for springing stockholder consents.  The proposed amendment…

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Directors’ Alleged Breach Of Fiduciary Duty Not Subject To Anti-SLAPP Statute

A SLAPP is a strategic lawsuit against public participation.  California enacted Code of Civil Procedure Section 425.16 as an antidote to SLAPP suits.  In general, a SLAPP is subject to a special motion to strike unless the court finds that the plaintiff has established that there is a probability that the plaintiff will prevail on the…

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This Proposed Amendment To DGCL Section 141(f) Is A Curate’s Egg

In AGR Halifax Fund, Inc. v. Fiscina, 743 A.2d 1188 (1999), the Delaware Court of Chancery was asked to decide whether a consent given by persons before they became directors could become effective if delivered to the corporation after they became directors.  The court said “no”.  See “Tis Well Consented” Vel Non.  Now, the Corporation…

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Name And Shame No More?

The last few years has seen the rise of so-called “name and shame” laws. The aims of many these laws may be laudable, but yesterday’s decision by the Court of Appeals for the District of Columbia Circuit calls their methodology into constitutional question. Nat’l Ass’n of Mfrs. v. SEC, 2014 U.S. App. LEXIS 6840 (D.C.…

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An American Icon Amends Stock Plan To Make It Section 25102(o) Eligible – Why?

Section 102 the National Securities Markets Improvement Act (which amended Section 18 of the Securities Act of 1933) deems securities listed (or authorized for listing) on the NYSE, the American Stock Exchange or the National Market System of NASDAQ to be “covered securities”.   A security is also a “covered security” under the NSMIA if it is listed…

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