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CALIFORNIA CORPORATE & SECURITIES LAW

What Good Can Come From Letting The Indifferent and Undecided Hold Sway?

I’ve written many posts on the subject of voting because it seems so straightforward and yet turns out to be complex.  In tackling any voting problem, it is important to know and understand the applicable voting rule.  An example of a voting rule can be found in Section 708(c) of the California Corporations Code which prescribes the…

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On Closer Inspection, This CII “Best Practice” May Be Neither Good Nor Legal

The Council of Institutional Investors has adopted what it describes as “a comprehensive body of corporate governance best practices”, including Policies on Corporate Governance.  I question, however, whether some of these policies really are “best practices” or even in conformity with applicable law. For example, the Section 3.7 of the CII’s Policies on Corporate Governance unequivocally, and without…

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An Unexpected Impasse Revisited

Last week, I wrote about how a shareholder who owns 60% of the voting power could find herself in a deadlock situation under cumulative voting.  A former colleague on the Corporations Committee of the Business Law Section of the California State Bar, David Marion, wrote with a suggestion: the shareholder could simply vote to amend…

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Jeremy Bentham – Present But Not Voting

In Monday’s post, I quoted Justice Antonin Scalia and Bryan Garner quoting Jeremy Bentham.  Although Bentham studied, wrote about and criticized the law, he did not practice it.  He is most famously known for his association with the doctrine of utilitarianism.  As it turns out, his mortal remains illustrate an important corporate governance principle –…

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Approval By The Outstanding Shares – When California’s Default Rule Doesn’t Apply

My posts this week have been dedicated to voting issues.  On Monday, I wrote about California’s default rule for shareholder action – California Corporations Code § 602(a).  This is a default rule because it is subject to a greater vote requirement imposed by the General Corporation Law or the Articles of Incorporation.  In numerous cases, the…

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