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CALIFORNIA CORPORATE & SECURITIES LAW

Can The Board Remove A Director?

Can a board of directors remove one of its own?  In the case of a California corporation, the answer is no.  The power to remove directors is vested in the shareholders and the superior court pursuant to Corporations Code Section 303 and 304.  While technically not a removal, one option may be available to a…

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Hiring & Firing Officers In California

John Jenkins at The Mentor Blog addresses the question of who has authority to hire and fire officers?  He notes: The bottom line is that that the Board always has that authority. That’s because Delaware 141 says “the business and affairs of every corporation organized under this chapter shall be managed by or under the…

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Section 11 Class Actions And The Magna Carta

If you had a dispute in Medieval England, it would likely be heard in the court of the local baron.  Some disputes, however, caught the interest of the monarch and would be heard in a royal court.  In the twelfth century, King Henry II instituted royal justice throughout England.  As might be expected, controversies arose…

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When Directors Are Or Become Bad Actors . . .

I’ve devoted several blog posts to the multifarious problems engendered by the SEC’s new “bad actor” disqualification provisions.  I’ve done so because Rule 506(d) is so poorly drafted that, like the annals of Volusius, its fate should be to provide loose wrappings for fish (“laxas scombris saepe dabunt tunicas“).   Under Rule 506(d), an issuer will…

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