Business Law

The Corporations Committee recently issued an analysis of an opinion relating to shareholder consent under the Delaware General Corporation Law: The Delaware Court of Chancery found that a stockholder consent signed without the stockholder having been provided the exhibits referred to in the consent made the consent invalid under the Delaware General Corporation Law (“DGCL”). This case could be of interest to California practitioners because the section of the DGCL in question is functionally identical to the corresponding section of… Read more

As we embark on this new year, I would like to share our Business Law Section’s long range strategy plan—which our BLS Executive Committee recently updated to more fully reflect our Section’s values and goals. Read more

Summary: A federal court in New York has held that despite a deeply discounted conversion price, a convertible note was not usurious because the stock option granted to the noteholder did not constitute "interest." [Blue Citi, LLC vs. 5Barz International, Inc., 2018 Westlaw 4500870 (S.D.N.Y.).] Read more

Summary: A bankruptcy court in Illinois has held that a financing statement that did not describe the collateral but instead simply referred to a security agreement was inadequate because that security agreement was not attached and the creditor failed to use a "supergeneric" collateral description. [In re I80 Equipment, LLC, 2018 Westlaw 4006294 (Bankr. C.D. Ill.).] Read more

Summary: A district court in New York has held that a liquidation trustee was not precluded by the doctrine of "in pari delicto" from asserting a breach of fiduciary duty claim against a group of corporate looters. [In re FKF 3, LLC, 2018 Westlaw 5292131 (S.D.N.Y.).] Read more

The New York Court of Appeals has held that an "accrual clause" contained in a residential mortgage-backed securities agreement was not a condition precedent to the accrual of the purchaser's warranty claim against the originator; therefore, the plaintiff's claim was time-barred. Further, any contractual attempt by the parties to delay the commencement of the statute of limitations was void as against public policy. [Deutsche Bank N.T. Co. vs. Flagstar Capital Markets Corp., 2018 Westlaw 4976777 (N.Y.).] Read more

Each year the United States Court of Appeals for the Ninth Circuit holds a civics contest for high school students. This year the Civics Contest theme is: The 4th Amendment in the 21st Century: What Is An “Unreasonable Search and Seizure” in the Digital Age. Read more

Hospital liable for damages for inducing physician’s medical group not to schedule him for work without affording peer review rights. Read more

Summary: In Daff v. Good (In re Swintek), 906 F.3d 1100 (9th Cir. 2018), the United States Court of Appeals for the Ninth Circuit held that Bankruptcy Code section 108(c) applies to afford a prepetition judgment creditor an additional 30 days after termination of the automatic stay of Bankruptcy Code section 362(a) to preserve a lien created prepetition under California law upon the service of an order for appearance and examination (an “ORAP”), which lien otherwise would have lapsed during the bankruptcy proceedings a year after its creation unless renewed by the California court. Read more

In CMBS Lenders v. JD Holdings, LLC, and John Q. Hammons Fall 2006, LLC, et al. (In re John Q. Hammons Fall 2006, LLC, et al.), Nos. KS-18-032 and KS-18-069, (10th Cir. BAP Aug. 1, 2018) (Docket No. 37) (“JD Holdings”), the U.S. Bankruptcy Appellate for the Tenth Circuit (the “BAP”) denied the appeals of multiple trustees of commercial mortgage-backed securities (“Appellants”) on the ground of equitable mootness. Appellants held security interests in a number of hotels that were the subject of confirmed chapter 11 bankruptcy plans. They appealed a number of orders, including the plan confirmation orders, on the grounds, among other things, that the plans: (1) did not require the immediate payment of the disputed portion of Appellants’ claims (including default interest), (2) did not require the escrow of sums required to pay the disputed claims; and (3) effected an impermissible substantive consolidation of the chapter 11 debtors. In dismissing the appeals on the ground of equitable mootness, the BAP ruled that reversal would create “nightmarish situation” for creditors who relied on the finality of the confirmed plans and would inevitably postpone reorganization while plan assets and claims would concurrently diminish. A copy of the opinion is available through PACER. Read more