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

The “Long Arm” Of Section 2115 May Be Shorter Than Some Believe

Recently, I came across a prospectus that included a description of California Corporations Code Section 2115 under the caption “Description of Capital Stock”.  The description began: We are a Delaware corporation, governed by the Delaware General Corporation Law; however, our headquarters, property and officers are located in California.  Section 2115 of the California Corporations Code

Stockholder Inspections Of Delaware Corporations In California

In United Techs. Corp. v. Treppel, 2014 Del. LEXIS 608 (Del. Dec. 23, 2014), the Delaware Supreme Court held that the Court of Chancery had authority to condition a stockholder’s inspection under Section 220 of the Delaware General Corporation Law upon the stockholder’s agreement  that “any claim, dispute, controversy or causes of action . . .

Facebook/Oculus VR Acquisition Raises Pseudo-Foreign Corporation Question

Yesterday, The Guardian reported that Facebook had acquired Oculus VR using a combination of cash and stock.  Facebook avoided SEC registration by availing itself of a fairness hearing before the Department of Business Oversight.  Readers may recall, that Facebook used the fairness hearing process in 2011 to acquire Instagram. In reviewing the notice of hearing,

And You Thought Dissenters’ Rights Didn’t Apply To Delaware LLCs

Delaware’s Limited Liability Company Act provides that a limited liability company agreement or an agreement of merger or consolidation or plan of merger may provide for appraisal rights.  6 Del. Code § 18-210.  Does this mean that a Delaware LLC with no such provision need not worry about dissenters’ rights?  Not necessarily.  Article 11 of

But Wait, California May Require Even More In Annual Reports To Shareholders

Yesterday’s blog discussed California’s requirement that many domestic and foreign corporations send financial statements to their shareholders.  If a corporation has 100 or more holders of record (determined in accordance with Section 605), then the annual report must also provide a brief description of the following: Any transaction during the previous fiscal year involving an amount in excess

How Many Ways Can The SEC Describe A “Year”?

It’s not easy to write regulations and lawyers can be a hypercritical group.  Nonetheless, the Securities and Exchange Commission’s rules can be maddingly inconsistent.  As one small example, I offer Item 405 of Regulation S-K and its many references to “year”. In general, the purpose of Item 405 is to require disclosure of late filers under

Some Observations On Indemnification Provisions In Articles Of Incorporation

Over the years, I’ve read many articles of incorporation that include provisions relating to indemnification of officers, directors and others.  Today’s post will cover a few questions and observations that have occurred to me over the years.  I’ll cover more of these “Why is there air?” type questions in future posts. Vice Admiral James Stockdale

DOC Calls It Fair

Notes on the Facebook fairness hearing At the conclusion of a hearing held yesterday morning, the Department of Corporations approved the acquisition of Instagram, Inc. by Facebook, Inc.  Technically, the Department approved the issuance of a permit to offer and sell the securities.  The hearing was was held pursuant to Corporations Code Section 25142.  See A

Three Common California M&A Pitfalls

I find that many California mergers and acquisition lawyers are more comfortable dealing with Delaware than California corporate law.  However, there are still many thousands of California corporations that may be in the market to acquire or be acquired.  Below are three common pitfalls California M&A pitfalls. 1.  Failing to recognize that the California General Corporation Law applies.  The CGCL will,