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CALIFORNIA CORPORATE & SECURITIES LAW

Is Someone Else’s Purpose An Improper Purpose?

This post on the Harvard Law School Forum on Corporate Governance and Financial Regulation discusses Vice Chancellor J. Travis Laster’s recent decision in Wilkinson v. A. Schulman, Inc., 2017 Del. Ch. LEXIS 798.  The case involved a stockholder’s demand for inspection under Section 220 of the Delaware General Corporation Law.  Vice Chancellor Laster denied inspection…

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A Shareholder Consent In Its Dotage May Or May Not Be Valid

California Corporations Code Section 603(a) broadly authorizes shareholder action by written consent: Unless otherwise provided in the articles, any action that may be taken at any annual or special meeting of shareholders may be taken without a meeting and without prior notice, if a consent in writing, as specified in [Corporations Code] Section 195, setting…

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How The Proposed Fix To Delaware’s Stockholder Consent Statute Can Be Fixed

Earlier this week, I wrote about a proposed amendment to Section 228 of the Delaware General Corporation Law.  The amendment, which is proposed by The Corporate Council of the Corporation Law Section of the Delaware State Bar, would essentially condition the effectiveness of a stockholder consent upon the delivery of a sufficient number of consents with 60…

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Who Votes As Proxy For Shares Standing In The Name Of Another Corporation?

The Proxy Season blog yesterday discussed the following question from the Q&A Forum of TheCorporateCounsel.net: Under Delaware law, can a Board of Directors authorize a person who is not an officer of the company to act as agent and vote shares of stock for the Company that it holds in another entity? John Jenkins responded…

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Are Alternate Committee Members “Then Serving”?

A number of amendments to Delaware’s General Corporation Law took effect at the beginning of this month.  One of these changes was to establish a default quorum requirement for meetings of committees of corporate boards of directors.  New Section 141(c)(4) provides: A majority of the directors then serving on a committee of the board of…

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Replacement Of Lost Stock Certificate Is Not An Internal Affair, But So What?

U.S. District Court Judge Edward M. Chen recently ruled that a stockholder could maintain an action under California Corporations Code Section 419 for replacement of a lost, stolen or destroyed certificate.  As just described, the ruling shouldn’t be a surprise.  Section 419 provides that if “a corporation refuses to issue a new share certificate or other certificate in…

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Fee Shifting Bylaw Provisions May Face Constitutional Limitation

The corporate governance world has been disquieted by Delaware Supreme Court Justice Carolyn Berger’s recent opinion that upheld the validity of a fee-shifting bylaw provision in the bylaws of a Delaware non-stock corporation.  ATP Tours, Inc. v. Deutscher Tennis Bund (No. 534, 2013, May 8, 2014).  Even though the ink has barely dried on the opinion,…

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Some Things That The Corporations Code Doesn’t Tell You About Annual Meetings

Annual meetings of shareholders are important.  If a corporation fails to hold one for a period of 60 days after the designated date or, if no date is designated, for 15 months, then the superior court may summarily order a meeting.  Cal. Corp. Code § 600(c) (compare Section 211(c) of the Delaware General Corporation Law in…

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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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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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