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CALIFORNIA CORPORATE & SECURITIES LAW

Officers And The Internal Affairs Doctrine

My guess is that most attorneys would say that the duty of an officer to the corporation are governed by the law of the state of incorporation under the “internal affairs doctrine”.  As explained by the U.S. Supreme Court, the “internal affairs doctrine” is a conflict of laws principle that “recognizes that only one State should…

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California Bar Committee Publishes Venture Capital Sample Opinion

The Opinions Committee of the Business Law Section of the California State Bar recently published a sample opinion for venture capital financing transactions.  In a sad testament to the lowly status of the California General Corporation Law, the committee chose the model of a Delaware, not California, corporation issuing preferred stock.   The sample opinion…

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Kalisman v. Friedman – A California Analysis

A few months ago, Vice Chancellor J. Travis Laster issued an interesting decision involving director inspection rights and the attorney-client privilege.  Kalisman v. Friedman, 2013 Del. Ch. LEXIS 100 (April 17, 2013).  Previously, I had posted on two California cases dealing with this issue.  See When is a Director’s Inspection Right Not Absolute? and Defining The…

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Choice Of Law And Derivative Suits

The California Corporations Code carefully defines the the terms “corporation” (Section 162), “domestic corporation” (Section 167), “foreign corporation” (Section 171); and “foreign association” (Section 170).  For example, when the legislature provided in Section 1500 that “[e]ach corporation shall keep adequate and correct books and records . . . “, the legislature imposed a mandatory obligation…

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Court Rules Choice Of Law Provision Takes Precedence Over Internal Affairs Doctrine

To say that the Delaware courts and bar are very fond of the internal affairs doctrine is about as controversial as wearing white before Labor Day.  If you have any doubts about the sacred status of the doctrine in Delaware, I refer you to the Delaware Supreme Court’s decision in Vantagepoint Venture Partners 1996 v. Examen,…

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Federal Judge Refuses To Find That California “Can Have No Real Interest” In Loans Closed Out Of State

The geographic reach of California’s statutes continues to be tested in the courts.  In a recent class action lawsuit challenging the defendants’ mortgage marketing and sales practices, the plaintiffs sued under, among other statutes, California’s unfair competition law, Business & Professions Code Section 17200.   Interestingly, the plaintiffs are residents of South Carolina and their loan was…

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