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CALIFORNIA CORPORATE & SECURITIES LAW

Do Outsiders Have Standing?

One of the essential elements of a contract is the consent of the parties.  Cal. Civ. Code § 1550(2).  When a party is a corporation, there is always a question of whether the person or persons signing the contract have the authority to do so on behalf the entity.  There is also the question of who can…

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50% Shareholder Denied Say In Defense Of Corporation

If two shareholders each own one half of the outstanding shares of a corporation, one might expect that they would have an equal say in just about everything.  It turns out that in some circumstances they won’t. In Coldren v. Hart, King & Coldren, Inc., Cal. Corp. Appeal No. G050202 (July 13, 2015), a shareholder sued the…

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This Plaintiff Dreamed Of Shares That Never Were

It’s hard for me to imagine being the owner of something that doesn’t exist.  It’s even harder to imagine being the equitable owner of something that doesn’t exist.  However, some people dream bigger dreams as was the case in White v. Demaray, 2014 U.S. Dist. LEXIS 10505 (N.D. Cal. Jan. 27, 2014). The case was…

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Tender Of Inflated Price Under Right Of First Refusal Does, And Doesn’t, Confer Standing

In a short ruling, U.S. District Court Judge Jeffrey S. White recently tackled a claim by a former employer that its departed employee had committed securities fraud when he allegedly failed to disclose that the price offered by his new employer for his shares of the former employer were “inflated and fraudulent”.  The price mattered to…

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Second Circuit Rejects Brachycephalic Canine Fund’s Section 16(b) Defense

When it comes to challenging the status quo of securities regulation, Bulldog Investors lives up to its name.  In 2006, Bulldog’s principal, Phillip Goldstein, successfully challenged the Securities and Exchange Commission’s hedge fund rule.  Goldstein v. SEC, 451 F.3d 873 (D.C. Cir. 2006).  Later, Bulldog was less successful in challenging an enforcement action taken by…

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