Ever Wonder Who’s In Charge At The Department Of Business Oversight?

I’m still adjusting to the fact that the Departments of Corporations and Financial Institutions have merged or morphed into the totalitarian sounding Department of Business Oversight.  See DOC and DFI – RIP.  Like each of its predecessors, the new Department is headed by a single Commissioner.  In July, Governor Brown appointed Jan Lynn Owen as the Department’s

Your Condo May Be Secure, But Not A Security

Two years ago, I wrote about U.S. District Court Judge Dana Sabraw’s opinion in Salameh v. Tarsadia Hotels, 2011 U.S. Dist. LEXIS 30375.  The case involved the question of whether ownership interests in individual units of the Hard Rock Hotel San Diego constitute securities under either the investment contract test enunciated by the U.S. Supreme Court in S.E.C. v.

SEC’s Investor Advisory Committee Pushes For Oddly Named “Universal Proxy Ballots”

In late July, the SEC’s Investor Advisory Committee issued a recommendation that the SEC “explore relaxing the ‘bona fide nominee’ rule embodied in Rule 14a-4(d)(1) . . . to provide proxy contestants with the option (but not the obligation) to use Universal Ballots in connection with short slate director nominations (in other words, where the candidates nominated

County Assessors Assume A Conversion Involves A Transfer, But Are They Correct?

When an entity converts into another business form, does a transfer occur?  Many California Assessor’s offices seem to think so.  Therefore, don’t be surprised if following a conversion you receive a notice threatening a possible reappraisal of your real property.  The notice may seek additional information regarding the transaction or may provide a form for claiming an exclusion

Lost Writings And The Statute Of Frauds

In 1677, the English Parliament enacted a law establishing a legal principle that was eventually adopted by all of the future states of its nascent colonies – the Statute of Frauds. Nevada has adopted this same principle in NRS 111.205(1): No estate or interest in lands, other than for leases for a term not exceeding

Contractual Provisions Disclaiming Attorney-Client Relationship Fail To Let Lawyer Off The Hook

Suppose a contract includes the following provisions: “Founder is relying solely on her legal counsel and not on any statements or representations of the Company’s legal counsel for legal advice with respect to this investment . . . .” “[name of counsel] has served as outside general counsel to the Company and has negotiated the

Supreme Court Decision Underscores The Importance Of Administrative Law

Administrative law is one of the most useful subjects that someone can take in law school.  I say that as someone who has taught the subject.  Earlier this week, the California Supreme Court issued an opinion that illustrates exactly why it can be very helpful to know about Administrative Law. Western States Petroleum Ass’n v. State Bd. of

Don’t Bank On Being Able To Use “Bank” In Your Corporate Name

“Bank” is a good example of a homonym (same spelling and pronunciation but different meaning), a homograph (same spelling but different meaning) and a homophone (same pronunciation).  I can think of at least three different meanings of the word in its noun form – a place where financial transactions are made, a mound or heap,

I Don’t Want To Express A Preference, But I Want My Vote To Count

I’ve always considered majority voting to be a profoundly illogical concept that evidences a fundamental misunderstanding of the mechanics of shareholder voting. As an initial matter, there is the problem of terminology.  For example, Section 7.2 of CalPERS’ Global Principles of Accountable Corporate Governance states: “Therefore, CalPERS recommends that corporations adopt the following corporate governance principles

Ninth Circuit Says Say-On-Pay Suit Should Stay In California Court

In enacting the Dodd-Frank Act, Congress made it clear to everyone, other than the plaintiffs’ bar, that say-on-pay votes were advisory only, did not create or imply any change in fiduciary duties of directors, or create or imply any additional fiduciary duties of directors.  15 USCS § 78n-1. In the eyes of the plaintiffs’ bar,