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CALIFORNIA CORPORATE & SECURITIES LAW

Calling All Stock Certificates

Last week, Broc Romanek’s Mentor Blog addressed the question of what to do about outstanding stock certificates following a reverse stock split.  Today, I’ll weigh in with a California perspective. Section 422 of the California Corporations Code invests a corporation’s board of directors the authority to order any holders of outstanding share certificates to surrender and exchange them for…

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Stock Repurchases: “We Can’t Think Of Anything Better To Do With Your Money”

The Wall Street Journal took aim yesterday at stock repurchases and dividend payments, citing a commissioned study that concluded: “companies in the S&P 500 index sharply increased their spending on dividends and buybacks to a median 36% of operating cash flow in 2013, from 18% in 2003.  Over that same decade, those companies cut spending on plants…

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Dividends: Sale or No Sale?

When a corporation distributes its own securities to its existing shareholders, there is no sale – correct?  Well, maybe not. Corporations Code 25017(f) does exclude from the definition of “sale” any “stock dividend payable with respect to common stock of a corporation solely (except for cash or script paid for fractional shares) in shares of common stock,…

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