When A Director Is Removed, Can The Shareholders Fill The Vacancy By Written Consent?

When a director is removed from the board of a California corporation, a "vacancy" is created.  Cal. Corp. Code § 192.   The board of directors cannot fill the vacancy unless the board is authorized to do so in the articles of incorporation or a...

Federal Circuit Holds Board Of Directors As A Separate Entity

We often hear about a board of directors being sued, but can a plaintiff really sue a corporation's board?   According to a recent decision by the Federal Circuit,  a plaintiff can't sue a board, at least not as a separate entity in federal court:

New Challenge Filed To California Board Quota Laws

Earlier this month, a Texas non-profit membership association filed a complaint in the United States District Court for the Central District (Western Division) of California, Alliance For Fair Board Recruitment v. Weber, Case No....

ISS' Odious Failure To Recognize Israel

The United States of America was the first country to recognize Israel as a state in 1948, and the first to recognize Jerusalem as the capital of Israel in 2017.  The World Factbook published by the Central Intelligence Agency describes Israel as...

Why Do Boards Get To Spend Money In Proxy Contests

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...

"Refusal To Acquiesce" To Director's Removal Results In Multimillion Dollar Damage Award

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...

9th Circuit: Shareholder Is Injured When California Requires Or Encourages Discrimination

In 2018, California enacted SB 826 to impose female director quotas on publicly held domestic or foreign corporation whose principal executive offices, according to the corporation’s SEC 10-K form, are located in California.  At the time, it was...

Ten Years Go By Without The DOJ Receiving Even One Of These Notices

In wake of the Sarbanes-Oxley Act, the California legislature saw fit to add Section 2207 to the California Corporations Code.  The statute threatens corporations with a $1 million civil penalty if they have actual knowledge that an officer,...

You Won't Find This "Bedrock" Delaware Doctrine In California Case Law (At Least Not Yet)

In Orzeck v. Englehart, 195 A.2d  375 (Del. 1963), the Delaware Supreme Court adopted what the Court of Chancery subsequently described as a "bedrock" doctrine of Delaware corporate law - the "Doctrine of Independent Legal Significance".   Warner...

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