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CALIFORNIA CORPORATE & SECURITIES LAW

Nevada Supreme Court Doubles Down On Joint Venture By Estoppel

Last March, I wrote about a decision of a panel of the Nevada Supreme Court in In re Cay Clubs, 130 Nev. Adv. 14 (2014).  The defendants thereafter sought reconsideration by the Supreme Court sitting en banc.  Yesterday, the Supreme Court issued its opinion.  For those familiar with the panel’s opinion, there are no surprises from the…

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The California Implications Of Perez v. Mortgage Bankers Association

On Monday, the U.S. Supreme Court heard oral arguments in Perez v. Mortgage Bankers Ass’n et al.  The case, if decided against the Department of Labor (Thomas E. Perez is the Secretary of Labor), will have a significant impact on all federal administrative agencies.  But what, if any, will be its impact on California state agencies?…

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Muzzling Directors Who Don’t Agree

In September, the California Public Employees’ Retirement System (CalPERS) selected Theodore “Ted” Eliopoulos as its Chief Investment Officer.  This appointment was unanimously approved by the members of the Board of Administration who voted.  One member, J.J. Jelincic, did not vote because he is on paid leave from the CIO post while serving on the CalPERS board.…

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Liability For Stolen Goods: A Four Thousand Year Old And Still Unsolved Problem

Suppose a businessman purchases inventory from a warehouse and then resells it.  Suddenly, the owner of the goods appears and seeks compensation for her goods on the basis that the warehouse had converted the goods.  The businessman protests that he acted in good faith, had no knowledge of the conversion and had paid full value…

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DBO Proposes Reversal Of Long-Standing CFLL Interpretation

The California Finance Lenders Law generally requires that a person engaged in the business of making consumer loans and/or commercial loans obtain a license from the Department of Business Oversight.  Cal. Fin. Code § 22100.  There are, of course, numerous exemptions from this requirement.  Section 22050(a) provides that the CFL does not apply to “any person…

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Judge Orders Stockholder To “Register” Correspondence With The SEC

Many boards operate with a high degree of collegiality, even when the directors disagree.  Some don’t.  When the board of directors of Gas Natural Inc., a publicly traded natural gas holding company, voted to remove its CEO and Chairman, he allegedly “assaulted” a fellow board member and the company’s outside lawyer.  I expect that readers…

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Buyer’s “I Have A Plan” Statement Found To Be Immaterial Puffery

A recent California Court of Appeal decision is a helpful reminder that buyers can also be targets of securities fraud suits.  In Goldsholle v. Brisco, 2014 Cal. App. Unpub. LEXIS 7997 (Cal. App. 2d Dist. Nov. 6, 2014), the seller of a company claimed that the buyer’s assurances that it had a plan to increase website…

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Judge Rules Against FTB In “Doing Business” Definition

Over a year ago, I wrote about an Iowa corporation, Swart Enterprises, Inc., which operates a 60 acre farm in Kansas. Swart has no physical presence in California. It owns no real or personal property in California.  However, Swart had invested $50,000 investment in a manager-managed California LLC.  Swart’s investment represented an ownership interest in the LLC…

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Do Some Companies Already Have Fee-Shifting Provisions (And Not Know It)?

A lot of folks these days are arguing and writing about fee-shifting bylaws as if they were some kind of novel and sudden irruption, like Athena bursting from Zeus’ skull.  This overlooks the existence of fee-shifting provisions in a myriad of existing contracts.  Arguably, some of these provisions may already applicable to derivative plaintiffs. When it comes to attorney’s…

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Will The Courts Stop Deferring To SEC Interpretations?

In 1984, the U.S. Supreme Court announced a foundational principle of administrative law.  When a court reviews an agency’s construction of a statute that it administers, the court should: Ascertain whether the statute is ambiguous.  If it is unambiguous, both the court and the agency are bound to apply the clear meaning of the statute.…

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