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Publicly-Traded Companies Corporations Code California

Allen Matkins

If The Shares Of A Chinese Company Are Delisted, What Happens To Trading In California?

Allen Matkins on

Yesterday's Wall Street Journal includes a story about the possible delisting of shares of Chinese companies.  Shares of companies that are listed, or authorized for listing, on a national securities exchange (or tier or...more

Allen Matkins

Does The Stock Market Believe That California's Board Diversity Mandates Enhance Firm Value?

Allen Matkins on

In 2018 and 2020, California enacted laws mandating that publicly held corporations (as defined) having their principal executive offices in California have specified minimum numbers of directors who are female and from...more

Allen Matkins

Why Was 25% Chosen As California's Jurisdictional Threshold For Recapitalization Transactions?

Allen Matkins on

California's securities qualification requirements and exemptions depend upon whether the offer and sale of securities is an issuer transaction, a change in rights, exchange, merger, or conversion transaction, or a nonissuer...more

Allen Matkins

Directors Removing Directors

Allen Matkins on

Seven years ago, I addressed the question of whether the board of directors of a California corporation could remove a fellow director...more

Allen Matkins

California Legislator Proposes To Enhance Criminal Fines For California, But Not Delaware, Business Entities

Allen Matkins on

In February of this year, California Assembly Member Jesse Gabriel introduced a bill making certain technical, nonsubstantive changes to a provision of the Penal Code concerning the removal of prison inmates for court...more

Allen Matkins

What Exactly Must A Board Approve When It Approves A Merger?

Allen Matkins on

Last Friday, John Jenkins wrote about another momentous ruling by Chancellor Kathaleen St. J. McCormick.  In Sjunde AP-Fonden v. Activision Blizzard, Inc., 2024 WL 863290 (Del. Ch. Feb. 29, 2024), she ruled...more

Allen Matkins

Is An Option Exercise Non Bis In Idem?

Allen Matkins on

Is the issuance of shares upon exercise of a stock option distinguishable from the issuance of the option?  The answer under California's Corporate Securities Law of 1968 may surprise some.  Corporations Code Section 25017...more

Allen Matkins

Does California Require "Reasonable Care" In A Board's Selection Of An Expert?

Allen Matkins on

Professor Stephen Bainbridge recently tackled the question of whether the business judgment rule applies to a corporate board's selection of an expert.   Section 141(e) of the Delaware General Corporation Law fully protects a...more

Allen Matkins

California Amends Corporations Code To Authorize Audio Option For Shareholder/Member Meetings

Allen Matkins on

Historically, a meeting necessarily meant a physical encounter.  Indeed, the word "meet" can be traced to the Anglo Saxon word metan which means to encounter or meet.  So it was that shareholder meetings involved the presence...more

Allen Matkins

Discerning When A Director Has Acted With "Reckless Disregard"

Allen Matkins on

Section 204(a)(10) of the California Corporations Code permits the articles of incorporation to include provisions eliminating or limiting the personal liability of a director for monetary damages in an action brought by or...more

Allen Matkins

Does The California Legislature Really Believe In the Existence Of Limited Liability Corporations?

Allen Matkins on

The California Corporations Code includes provides for the formation of corporations as well as limited liability companies.  However, it does not provide for the formation of limited liability corporations.  Oddly, however,...more

Allen Matkins

What Makes An Officer An Officer?

Allen Matkins on

The word officer is used widely in the law.  For example, there are judicial officers, peace officers, and constitutional officers.  Even lawyers are often described as "officers of the court".  See, e.g., Hickman v. Taylor,...more

Allen Matkins

Court Finds FAC Adequately Pled DAO Was A Partnership Under California Law

Allen Matkins on

A Decentralized Autonomous Organization, or DAO, is a governance structure popular with devotees of cryptocurrencies and blockchain technologies.  It is decentralized because holders of tokens, rather than a board of...more

Allen Matkins

The Superior Court Has The Authority To Determine The Validity Of Board Elections, But What About Recalls?

Allen Matkins on

Section 709 of the California Corporations Code provides a mechanism for "any shareholder" or "any person who claims to have been denied the right to vote" to obtain a determination by the Superior Court of the validity of...more

Allen Matkins

A Corporation Is A Body But Also An "Individual"

Allen Matkins on

Several years ago, I wrote about the various meanings of "person" in the California Corporations Code.  All of the definitions mentioned in that post included corporations within the list of persons.  If a corporation is a...more

Allen Matkins

Bill Would Allow Shareholders To Phone It In

Allen Matkins on

Currently, the California Corporations Code prohibits a California corporation from conducting a meeting of shareholders solely by electronic transmission by and to the corporation, electronic video screen communication,...more

Allen Matkins

Court Of Appeal Declines To "Sit On" Board Diversity Judgment

Allen Matkins on

In July, California Secretary of State Shirley Weber filed a petition for a writ of supersedeas in the California Court of Appeal with respect to the trial court's judgment in Crest v. Padilla.  In that case, the trial court...more

Wilson Sonsini Goodrich & Rosati

California Adopts Ratification and Verification Statute for Corporations

Throughout the life cycle of a company, and especially during the leaner early start-up stages, corporate actions that are defective due to failures to obtain the correct board or shareholder votes, errors in the approval...more

Allen Matkins

This California Statute Deems Directors To Be Omniscient

Allen Matkins on

California Corporations Code Section 22003 effectively deems directors to be all-knowing...more

Allen Matkins

Can A Corporation Pledge Its Own Shares?

Allen Matkins on

A "pledge" is a bailment for security.   It is effected by delivery of possession of the pledged property, although title remains in the pledgor.  Hartford v. State Bar,  50 Cal. 3d 1139, 791 P.2d 598, 270 Cal. Rptr. 12...more

Allen Matkins

Must An Officer's Certificate Always State That The Board Approval?

Allen Matkins on

Recently, I was looking at the form of Officer’s Certificate of Approval of Agreement of Merger on the Secretary of State’s website.  Paragraph 2 of the form states...more

Allen Matkins

For These Directors, There May Be No Way Out

Allen Matkins on

The California General Corporation Law provides that any director may resign effective upon giving notice to certain specified persons, unless the notice specifies a later time for the effectiveness of his or her...more

Allen Matkins

May A Director Properly Rely On Her Rabbi?

Allen Matkins on

In prescribing the duties of directors, California Corporations Code Section 309 provides that a director is entitled to rely on information, opinions, reports or statements prepared or presented by "counsel, independent...more

Foley & Lardner LLP

LA Court Strikes Down CA Statute Requiring Board Diversity

Foley & Lardner LLP on

On April 1, 2022, the Superior Court of California for the County of Los Angeles entered an order striking down the California law requiring that publicly held companies with principal offices in the state have a minimum...more

Sheppard Mullin Richter & Hampton LLP

Los Angeles Superior Court Invalidates California Board Diversity Statute, Rendering It Ripe for Review by the California Court of...

In Crest v. Padilla, No. 20STCV37513 (Cal. Super. Apr. 1, 2022), the Superior Court of California for the County of Los Angeles (Green, J.) declared that Section 301.4 of the California Corporations Code is unconstitutional...more

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