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CALIFORNIA CORPORATE & SECURITIES LAW

Court Of Appeal Voids Jury Trial Waiver Notwithstanding New York Choice of Law

A New York state of mind, but California dreaming A sophisticated lender and borrower negotiate a loan agreement in New York, the lender disburses the loan proceeds in New York, and both parties agree that New York law governs.  This choice-of-law is memorialized in bold face type and capital letters in the loan agreement.  In…

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Class A Is Class A and Class B Is Class B And Shall Ever The Twain Meet?

In addition to directors and officers, Section 16 of the Securities Exchange Act of 1934 applies to every person who is “directly or indirectly the beneficial owner of more than 10 percent of any class of any equity security (other than an exempted security) which is registered pursuant to Section 12” of the Act.  This,…

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Forum Selection Bylaws – Why A California Court May Not Follow Delaware

Forum selection bylaws are likely to become even more popular after this week’s decision in Boilermakers Local 154 Retirement Fund v. Chevron Corporation, C.A. No. 7220-CS (Del. Ch. June 25, 2013).  In that case, Chancellor Leo E. Strine, Jr. found that forum selection bylaws are (i) statutorily valid under 8 Del. C. § 109(b); and…

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Supreme Court To Decide If It Will Decide Whether Section 16 Plaintiff Has Constitutional Standing

No Harm, No Foul The late Lakers broadcaster Chick Hearn was known for coining or popularizing numerous basketball expressions, including “air ball” and  “no harm, no foul”.   Now, the U.S. Supreme Court may soon decide whether the principle of “no harm, no foul” applies to Section 16, the other insider trading statute. Do Section 16 Plaintiffs Suffer…

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Forum Selection Bylaws And The California Constitution

Last December, I briefly discussed whether a forum selection bylaw with respect to officers and directors would pass muster as a contractual choice of law.  See A Forum Selection Clause Issue That You May Not Have Heard About Until Now.  It also occurs to me that forum selection bylaws might run afoul of the California…

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Can CalPERS Be Sued In Federal Court Or Perhaps Even New York State Court?

The California Public Employees’ Retirement System began lending securities in the early 1980s.  Since the early 1990s, CalPERS has used the Master Securities Loan Agreement (MSLA) originally developed by the former Bond Market Association (fka Public Securities Association and nka Securities Industry and Financial Markets Association).  I’m told by CalPERS that it currently uses the 2000 version…

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No Right To Jury Trial: Appellate Court Upholds Binding Mediation Agreement

The California Constitution (Art. I, § 16) guarantees an “inviolate” right to a “trial by jury”.  In a civil case, the right to a jury may be waived by “the consent of the parties expressed as prescribed by statute”.  Id.  The California legislature has prescribed five different ways in which a jury trial in a civil case may…

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Why The Word “Includes” Conflates The Separation Of Powers

There are many ways to define a term.  Many definitions are “intensional definitions”.   An intensional definition lays down all of the properties required to meet that definition.  For example, Corporations Code Section 185 provides that “Shareholder” means “one who is a holder of record of shares.”  That is, the necessary and sufficient condition for belonging…

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