California Lawyers Association

Business Law Corporations Committee

Updates from the Business Law Corporations Committee

On June 21, 2021, a three-judge panel of the Ninth Circuit Court of Appeal, in Creighton Meland v. Shirley N. Weber, Secretary of State of California (No. 20-15762), reversed the district court’s dismissal for lack of standing of a lawsuit brought by a shareholder challenging the constitutionality of California’s gender quota law found in Section 301.3 of the California Corporations Code. Read more
In early 2021, the California Senate introduced two bills related to reporting of greenhouse gas emissions (SB 260) and climate-related financial risk (SB 449). Both bills were amended as recently as April 2021. Read more
On February 4, 2021, the Federal Trade Commission announced a suspension of grants of early termination of the 30-day HSR waiting period, for all transactions, during a ‘review period’ as the FTC and the DOJ assess the policies and procedures used to grant early termination. Read more
On January 28, 2021, the Delaware Court of Chancery, in the case of Swipe Acquisition Corporation v. Peter M. Krauss, 2021 Del Ch. Lexis 14, held that a Delaware choice of law provision in a stock purchase agreement must yield to the State of California’s strong public policy that violations of its corporate securities laws are not waivable. Read more
The California Secretary of State has announced that it will resume certain services effective June 1, 2020. Read more
Corporate practitioners are confronting many legal issues arising from the COVID-19 coronavirus pandemic. It is worth remembering that the California Corporations Code (“Code”) provides some flexibility in corporate governance during a state of emergency. As a result of legislation that was spearheaded by the Corporations Committee, effective January 1, 2014 the Corporations Code was amended in three important ways. First, section 212 (c)(1) was added to the Code to specifically acknowledge that bylaws may contain any provision, not in conflict with the articles of incorporation, to manage and conduct the ordinary business affairs of a corporation during an “emergency,” including but not limited to procedures for calling, and quorum requirements for, board meetings and designation of additional or substitute directors. Read more
The Corporations Committee is proposing two important changes to the California Corporations Code. These were introduced in the Senate on January 21, 2020 as SB 870 and on February 3, 2020 as SB 913. Read more
On January 23, 2020, the California Court of Appeal, First Appellate District, in the case of Jensen v. iShares Trust, 2020 Cal. App. LEXIS 61, affirmed a lower court ruling that individual investors who purchased shares in exchange-traded funds (“ETFs”) through the secondary market and then incurred losses lacked standing to pursue their claims for violations of various provisions of the federal Securities Act of 1933 (the “Securities Act”) against the issuer and associated entities principally because the investors purchased… Read more
On January 21, 2020, the California Court of Appeal, Second Appellate District, in the case of Techno Lite, Inc. v. EMCOD, LLC, 2020 Cal. App. LEXIS 41, in the portion of the decision certified for publication, upheld the trial court and rejected the defendants’ contention that they could not be liable for fraud because their false promise not to compete against their employer while employed was void because the noncompete agreement violated section 16600 of the California Business and Professions Code prohibiting restraints of trade. Read more
In Magic Carpet Ride LLC v. Rugger Investment Group, L.L.C. (Oct. 25, 2019),a California Court of Appeal addressed the question whether untimely performance under a contract containing a time-is-of-the-essence clause always constitutes a material breach. Although this case involves the purchase and sale of an airplane, the principles discussed in the opinion could apply to an asset or stock purchase agreement. Read more

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