The Nicene Creed as approved by the Council of Constantinople in 381 A.D. included the following: "τὸ ἐκ τοῦ πατρὸς ἐκπορευόμενον (who proceeds from the father). About 200 years later at the Third Council of Toledo, the...more
Five years ago, I noted that the Nevada Supreme Court had adopted New York's more deferential approach for assessing special litigation qualifications in Auerbach v. Bennett, 393 N.E.2d 994 (N.Y. 1979) over that of the...more
The California Constitution declares that trial by jury is an "inviolate right" that "shall be secured to all". Cal. Const. Art. I, §16. Despite this expansive language, this right in the civil context is generally limited...more
Historically, the alter ego doctrine has been applied to hold a shareholder or shareholders liable for the claims made against the corporation. In general, two requirements must be met for the doctrine to be applied. First,...more
Having read Professor Stephen Bainbridge's post about the origins of the judicial doctrine that directors must act on an informed basis, I passed along a reference to the California Supreme Court's in Fox v. Hale & Norcross...more
Yesterday, John Jenkins wrote about Delaware's decision to amend Section 102(b)(7) to permit the exculpation corporate officers. Until now, Delaware only permitted the certificate of incorporation to exculpate directors. For...more
Section 204(a)(9) of the California Corporations Code allows the articles of incorporation to include a provision requiring the approval of the shareholders (Section 153) or the approval of the outstanding shares (Section...more
Last year, the Delaware Supreme Court adopted a tripartite test for assessing demand futility allegations in derivative actions. United Food & Commercial Workers Union v. Zuckerberg 262 A.3d 1034 (Del. 2021). Under this...more
In January 2018, the media began reporting on two security vulnerabilities affecting Intel Corporation's microprocessors - dubbed "Spectre" and "Meltdown". Following these disclosures, Intel's stock price fell and its...more
I must confess that I confess that I am nonplused by a recent ruling by U.S. District Court Judge James A. Teilborg in SinglePoint Direct Solar LLC v. Curiel, 2022 U.S. Dist. LEXIS 19880. The case involved, among other...more
The last sentence of California Corporations Code Section 600(e) imposes a significant limitation on the ability of California corporations to hold virtual-only meetings...more
Closing arguments are scheduled to begin this morning at 10:00 a.m. (California) in the first trial of the constitutionality of California's female director quota law, SB 826. The trial began last December before Los Angeles...more
The California Secretary of State's website provides certain information with respect to a wide range of domestic and foreign entities registered to transact intrastate business, including corporations, limited liability...more
Several provisions of the California General Corporation Law that require filing with the Secretary of State specify that the filed instrument must include the Secretary of State's file number. E.g., Cal. Corp. Code §§...more
In this post, Professor Stephen Bainbridge posits that the Delaware Supreme Court incorrectly decided Fliegler v. Lawrence, 361 A.2d 218 (Del. 1976) by requiring that stockholder approval of conflicted transaction requires a...more
After Vice Chancellor Morgan Zurn's in September issued his opinion in In re Boeing Company Derivative Litigation, UCLA Professor Stephen Bainbridge declaimed that "After Boeing, Caremark is no longer 'the most difficult...more
As noted in yesterday's post, Secretary of State Shirley N. Weber is asking U.S. District Court Judge R. Gary Klausner to dismiss a challenge to California's board quota statutes. In her motion to dismiss, the Secretary of...more
In this post, UCLA Law School Professor Stephen Bainbridge quibbles my description of Delaware's two-step approach to the special litigation committee defense in derivative suits. In particular, he points out that Delaware...more
Today's post follows up on two prior posts addressing actions by creditors of dissolved corporations. This post discusses the non-applicability of Chapter 5 of the California General Corporation Law to proceedings for...more
Dissenters' rights under California's General Corporation Law do not exist unless there are "dissenting shares", a term defined in Section 1300(b) of the California Corporations Code. In order to qualify as "dissenting...more
Corporations incorporated under California's General Corporation Law are subject to the limitations on distributions set forth in Chapter 5 of that law. A foreign corporation may also be subject to Chapter 5 by virtue of...more
A recent holding by the Second District Court of Appeal is a cautionary tale for directors who fail to acquiesce to a director's removal from the board. Association for Los Angeles Deputy Sheriffs v. Macias, 63 Cal. App. 5th...more
Today's blog revisits (and answers) a question that I posed nearly eight years ago in this post. The question was: "Where Exactly Is It Written That Shareholders Aren't Liable For Corporate Debts?"...more
William Romanowski is a former NFL linebacker who later became the majority shareholder, director, and "public face" of Nutrition 53, Inc. When the company's second largest shareholder was allegedly denied inspection of the...more
Yesterday, I listed to a talk by Vice Chancellor J. Travis Laster of the Delaware Court of Chancery entitled "Purpose, Power, and Fiduciary Duty: Dimensions of Delaware's Corporate Law Regime". The webinar was presented by...more