In This Church Versus State Battle, The State Prevailed

Borrowing a bon mot from the riding arena, there are two kinds of California corporate lawyers, those who have had a filing rejected by the Secretary of State’s office and those that will.  As almost every corporate lawyer in California knows, it is frustrating and discomfiting to have a filing bounced.  But as Chernyshevsky, Tolstoy, and

Court Decides Employer Had No Obligation To Pay Employee’s Attorney

Mention indemnification to a corporate lawyer, and you’re like to hear about Section 317 of the Corporations Code, the articles of incorporation and bylaws.  But a corporate agent’s indemnification rights are not necessarily cabined by the Corporations Code.  If the agent is an employee, she may have a right to indemnification by her employer pursuant to Labor Code Section 2802, which provides

Proxy Advisory Firms – What About State Registration?

Yesterday’s post discussed why proxy advisory firms are likely to meet the definition of “investment adviser” under the Investment Advisers Act of 1940.  I noted that some proxy advisory firms, such as ISS and Marco Consulting Group, Inc., have, in fact, registered with the Securities and Exchange Commission as investment advisers.  Other proxy firms are not registered

Proxy Advisory Firms And Investment Adviser Registration

Recently, I wrote about a shareholder proposal seeking to hold a proxy advisor popularity contest.  I commented that this could raise some interesting compliance challenges for proxy advisory firms that are registered as investment advisers.  I waited, it turns out in vain, for someone to point out that not all proxy advisors are registered as

Does Majority Voting Improve Performance?

I’ve railed against the lack of analytical clarity with respect to so-called “majority vote” regimes. See Jeremy Bentham – Present But Not Voting. Professor Stephen Bainbridge recently called attention to dueling academic studies that reach opposite conclusions regarding the value of implementing majority voting:  Majority voting for directors and the problem with empirical legal “scholarship”.

CalPERS’ Warning Of Chill Goes Unheeded

Last November, Judge James P. Kleinberg of the Santa Clara Superior Court in San Jose, California ruled on motions for summary judgment in a case brought by former employees of a management company that had been retained by the general partner of multiple investment funds.  These former employees sued the funds for more than $2 million in

Commodities And The CSL

A recent unpublished opinion by Justice William W. Bedsworth set me to cogitating on the status of commodities under the Corporate Securities Law of 1968.  In Kelly v. Monex Co., 2013 Cal. App. Unpub. LEXIS 5903 (Aug. 21, 2013), the plaintiff had lost substantial amounts in trading gold and silver through the defendant.  She sued and the

When The RULLCA Is Spun, California’s Done?

I’ve prophesized at some length about the looming catastrophe that is the California Revised Uniform Limited Liability Company Act, Cal. Corp. Code § 17701.01 et seq.  My problem isn’t with the RULLCA itself, but with the transition being forced on LLCs formed under the current Beverly-Killea Limited Liability Company Act, Cal. Corp. Code § 17000

Why Your LLC May Be Doing More Than You Think In California Even When It’s Doing Nothing

Until two years ago, determining whether a company was “doing business” in California depended upon whether it was “actively engaging in any transaction for the purpose of financial or pecuniary gain or profit”.  Cal. Rev. & Tax. Code § 23101.  While this is a very open-ended definition, the statute at least required that a taxpayer be actively engage in a transaction.  Requiring

When Incorporating, Stay Off The “Highway of Sorrow” For There May Be No Turning Back

As an erstwhile player of the five-string banjo, I’m a big fan of Bluegrass music.  One of my favorite songs is the rueful “Highway of Sorrow” as performed by the great flat pick guitar player Doc Watson.  The song includes these mournful lines: I’m heading for destruction, I’m on the wrong track Down the highway of sorrow, there’s no