California Corporate & Securities Law

When bad things happen to corporations, derivative suits are sure to follow. So it was for Galectin Therapeutics, Inc., a Nevada corporation. Following publication of allegations of a "stock promotion scheme", stockholders filed derivative suits in...

Yesterday's post concerned a recent federal district court decision applying the corporate alter ego doctrine to a Nevada limited liability company. Bustos v. Dennis, 2018 U.S. Dist. LEXIS 45764. An update to this post noted that although Judge...

Corporations and limited liability companies share a key feature - insulation of owners from the liabilities of the entity. In the 19th century, courts began to fashion a significant exception to this principle for corporations. The exception became...

Yesterday's post concerned U.S. District Court Judge Cynthia Ann Bashant's recent ruling that a plaintiff had failed to plead adequately the existence of a security.  D.R. Mason Constr. Co. v. GBOD, LLC, 2018 U.S. Dist. LEXIS 41236. Professor Fershee...

As Professor Joshua Fershee has often noted, many judges fail to distinguish between corporations and limited liability companies.  See, e.g., LLCs Are Not Corporations. Be Vigilant. Respect the Entity. Therefore, it is nice to see that some judges...

Not too long ago, I wrote about the lawsuit filed in California challenging a confidentiality agreement allegedly entered into by President Donald Trump.  Clifford v. Trump, L.A. Super. Ct. Case No. BC 696568 (filed Mar. 6, 2018). In that post, I...

The California legislature may soon be considering a bill that would revise the tax rates for publicly held corporations based on their compensation ratios.  As introduced by Senator Nancy Skinner, SB 1398 would establish the following rates...

Three men got together to buy and operate a restaurant. They formed a corporation, issued shares and made a "Subchapter S" election. Later, disagreements arose and one of the three sued the other two. Each side struggled to explain what happened....

On March 20, 2018, the United States Supreme Court issued its decision inCyan, Inc. v. Beaver County Employees Retirement Fund, reaffirming that a class action alleging only violations of the federal Securities Act of 1933 could be brought in...