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Court Finds This Triptych Sufficient To Establish A Director's Breach Of Fiduciary Duty

Yesterday's post discussed one aspect of the Court of Appeal's holding in Coley v. Eskaton, 2020 Cal. App. LEXIS 629.  The case involved a homeowner's lawsuit against two directors of the homeowner's association and their employers.  Among other...

nonprofit corporations, nonprofit corporation law, Corporate Governance

Director Found To Have Breached His Fiduciary Duty By Sharing Corporation's Privileged Information With His Personal Attorney

A homeowner in a common interest development sued the homeowner association and two of its directors and the directors employers.  The directors were employed by two related companies engaged in the development and support of common interest...

nonprofit corporations, nonprofit corporation law, nonprofit mutual benefit, Corporate Governance

Bill Would Impose Minimum Number Of "Directors From An Underrepresented Community"

In 2018, the California legislature enacted SB 826 (Jackson) which imposed gender quotas on corporate boards of directors of "publicly held corporations".  See California Enacts Novel Female Board Quota Legislation.  The constitutionality of that...

Corporate Governance

Are Shares Of A Corporation Owned By A Subsidiary Entitled To Vote?

Are shares of a corporation owned by its subsidiary entitled to vote?  The answer depends, in part, on what constitutes a subsidiary.  California Corporations Code Section 703(b) provides a succinct answer: "Shares of a corporation owned by its...

Corporate Governance

Must The Board Approve All Corporate Giving?

When a corporation makes a gift, it is handing out money that belongs to the shareholders.  Therefore, it should come as no surprise that shareholders may sometimes object to corporate largess at their expense.  In this posting from six years ago, I...

Corporate Governance

Study Finds That Nevada Has "Vastly Outperformed" Delaware In Attracting These Corporations

In a recent study, William J. Moon at the University of Maryland School of Law tackles the question of "Delaware's surprising weakness competing in the emerging international market for corporate law".  He finds that less than 5% of Chinese...

Nevada Corporations, Corporate Governance

Secretary Of State Must Answer Legal Challenge To Female Director Quota Law

Last August, I reported on the filing of a taxpayer challenge to California's Board Gender Quota Law.  Crest v. Padilla, Cal. Super. Ct. Case No. 19STCV27561.  California's Secretary of State, Alex Padilla, was named as the defendant in his official...

Corporate Governance, California Secretary of State

Can This Bylaw Provision Eliminate Shareholder Proposals?

Rule 14a-8 under the Securities Exchange Act of 1934 requires companies that are subject to the federal proxy rules to include shareholder proposals in their own proxy statements to shareholders, subject to certain procedural and substantive...

Corporate Governance, General Corporation Law

You Might Be Surprised Who Is Authorized To Call A Meeting Of Your Board of Directors

Section 307(a)(1) of the California Corporations Code is quite specific in identifying who is empowered to call meetings of a corporation's board of directors: the chairperson of the board, the president, any vice president, the secretary, or any...

Corporate Governance, Financial Institutions

Are Supermajority Board Voting Bylaws Effective?

Section 204 of the California Corporations Code lists a number of possible provisions that may be included in the articles and "which shall not be effective unless expressly provided in the articles".  Included in this list of permissible provisions...

California Corporations Code, Corporate Governance

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30172DBAB0084D3A8F39D7AF0A8E79BC.ashxKeith Paul Bishop
Partner at Allen Matkins
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