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Directorial Duties To Creditors - Getting To The Bottom Of The California Trust Fund Theory

A week ago today, Kevin LaCroix wrote about the potential liability of directors of financially stressed companies.  Kevin's piece focused on Delaware law and makes no mention of the state of the law here in California.

In Berg & Berg Enterprises,...

California Corporations Code, Corporate Governance

Close Corporation Or Simply A Closely Held Corporation?

A corporation may have a single shareholder or tens of thousands of shareholders.  The former is often referred to as a "closely held corporation".  The California Corporations Code does not use or define the term "closely held corporation" although...

Corporate Governance, General Corporation Law

Dubiety Clouds Gubernatorial Order Allowing Virtual-Only Shareholder Meetings

On Monday, Governor Newsom issued an executive order pursuant to California's Emergency Services Act, Government Code Sections 8567 & 8571.  The order is intended to provide tax, regulatory and licensing extensions for businesses.  The order also...

Corporate Governance

Alien Attorneys In the Boardroom

In yesterday's post, I wrote that admittance of non-directors to the corporate board meetings should rest within the discretion of the board as a whole.  If a board should decide to allow directors to bring personal lawyer to a meeting, these alien...

Corporate Governance

Can Directors Bring Their Personal Advisors To Board Meetings?

A corporate board meeting is fundamentally an opportunity for directors to consider, discuss and make decisions.  Some (most notably Delaware Vice Chancellor J. Travis Laster) have argued that a director's obligations as a fiduciary supports the...

Corporate Governance

DBO Says It "Will Not Criticize" Banks And Credit Unions For Holding Virtual Meetings

In response to Covid-19 (Coronavirus) emergency, the California Department of Business Oversight has issued guidance to banks and credit unions and to escrow agents, finance lenders and services, student loan servicers, residential mortgage lenders...

Financial Code, California Corporations Code, Corporate Governance

Does This California Statute Arbitrarily Shackle Corporate Boards In Times of Emergency?

In 2013, the Corporations Committee of the Business Law Section California State Bar sponsored legislation, A.B. 491, to provide California corporations with certain flexibility in the case of an emergency.  Among other things, the legislation...

California Corporations Code, Corporate Governance

The Case Of The Insufficient Majority

California Corporations Code Section 307(a)(8) provides that an act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present is the act of the board, subject to the provisions of Section 310...

Corporate Governance, Corporations Code

Breaking Bad At Board Meetings

Suppose that the articles of incorporation of a California corporation provide that the authorized number of directors is 7.  Unless the articles or bylaws provide otherwise, the attendance of 4 directors will constitute a quorum.  Cal. Corp. Code §...

California Corporations Code, Corporate Governance

A Different Sort Of Standing Is At Issue In Federal Court Challenge To California Female Director Quota

Last November, a shareholder of OSI Systems, Inc. filed a complaint in the U.S. District Court for the Eastern District of California challenging California's law imposing female director quotas on publicly traded corporations headquartered in...

Corporate Governance, General Corporation Law

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30172DBAB0084D3A8F39D7AF0A8E79BC.ashxKeith Paul Bishop
Partner at Allen Matkins
(949) 353-6328
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