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CALIFORNIA CORPORATE & SECURITIES LAW

SB 75 May Prove To Be Delaware’s Seven Sisters

A century ago, New Jersey was the state in which to incorporate.  Long before former Iraqi President popularized the expression “Mother of Battles” (“Um El-Ma’arek“), the famed legal scholar Adolph A. Berle, Jr. bestowed the title of “mother of all corporations” on the State of New Jersey.  Berle, Historical Inheritance of American Corporations, Lecture given before The…

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Senator Blumenthal Urges SEC To Investigate Fee-Shifting Charter Provisions

Recently, Senator Richard Blumenthal wrote a letter to the Securities and Exchange Commission asking that the “Commission protect investors and America’s capital markets from a serious and imminent threat.”  According to the Senator, this isn’t an ordinary threat, this threat is “leaves shareholders unable to protect their interests; it undermines the integrity of our capital…

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Why The SEC Should Stay Out Of The Fee-Shifting Charter Debate

In a recent post, Columbia Law School Professor John C. Coffee Jr. argues that the Securities and Exchange Commission should take a number of steps to challenge and discourage the adoption of fee-shifting charter provisions.  I disagree. Professor Coffee does not identify any market failures that prevent investors from adequately assessing any risks associated with…

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Public Company Adopts Fee Shifting Bylaw

The Delaware Supreme Court caused quite a stir when it concluded that a fee shifting bylaw adopted by a non-stock corporation did not run afoul of the Delaware General Corporation Law.  ATP Tour, Inc. v. Deutscher Tennis Bund, 2014 Del. LEXIS 209 (Del. May 8, 2014).  The Delaware legislature threatened to put the kye-bosk on this type of bylaw but it…

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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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