California Corporate & Securities Law

In 2016, respondent China Yida Holding, Co. (CY), a Nevada corporation, merged with a private holding company, taking CY private and delisting it from the Nasdaq stock exchange.  The merger agreement and the proxy statement filed with the Securities...

The existence of accrued and unpaid dividends can hang like an ominous cloud over a corporation's future financings.  Are these accrued but unpaid dividends in the nature of a debt that cannot be erased by an amendment of the articles?  

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 Section 2115 of the...

In an opinion issued last week, U.S. District Court Edward M. Chen ruled that Ohio law applied to an alter ego claim against the members of an Ohio limited liability company.  Greenlight Sys., LLC v. Breckenfelder, 2021 U.S. Dist. LEXIS 120288. He...

Professor Stephen Bainbridge's blog yesterday highlighted a recent article by his Sung Hui Kim entitled "Do Lawyers Make Good Gatekeepers?" In answering this question, Professor Kim distinguishes between in-house and outside counsel. As to the...

Corporations Code Section 17702.09 requires every California limited liability company and every foreign limited liability company registered to transact intrastate business in California to file and update a Statement of Information. Although the...

Recently, UCLA Law School Professor posed the question "Why do boards get to spend corporate money to fight off proxy contests?" His answer is answer "because the courts say so". In California, it is because the legislature has said so, at least in...

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 1007 (2021). The case...

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?"