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CALIFORNIA CORPORATE & SECURITIES LAW

Failure To Return Shares Subject To Repurchase Right Supports Conversion Claim

Closely held issuers often include a repurchase right in their equity award agreements.  I expect that in most cases, shareholders will comply with these provisions.  When a shareholder doesn’t, the company’s most obvious cause of action will be for breach of contract.  Conversion is a less obvious cause, but according to the California Court of Appeal, a viable claim nonetheless. …

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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…

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Converting Rice May Be Easier Than Converting To A Flexible Purpose Corporation

The process for converting rice sounds like some medieval torture.  Rice is soaked, steamed under pressure, and then dried.  While not pleasant, conversion can, and does, occur.  The same may not be true for converting a corporation into a flexible purpose corporation. Flexible purpose corporations are corporations formed under Title I, Division 1.5 of the California…

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