Posts by Richard Burt
Filed UCC Termination Statement Binding on Lender Even If Mistaken
In a recent case, a lender made several financings of a borrower. The borrower paid off one financing, and the lender authorized the filing of a termination statement to release its security interest in a particular asset that secured that particular financing. The termination statement was worded, however, so as to release the lender’s security…
Read MoreBreach of Fiduciary Duty by Corporate Insiders Requires Remedy, Even if Damages Unclear
When corporate insiders transferred to a new corporation corporate assets claimed to be worthless, the shareholders had a right to a remedy, even if the damages were unclear. In Meister v. Mensinger (2014) 230 Cal. App. 4th 381, Sesame Technologies, Inc., was a software company that struggled financially throughout most of its existence. From 2000 to 2002,…
Read MoreBank CD’s not covered by Securities Litigation Uniform Standards Act of 1998
In Chadbourne & Parke LLP v. Troice (U.S. Supreme Court February 26, 2014), the Supreme Court held that bank CD’s not traded on national securities exchange are not a “covered security” and therefore a class action based on fraud in connection with such CD’s can be brought in state court. Allen Stanford and several of his…
Read MoreRefund of Late-Filing Penalty for Single-Member LLCs
For income tax purposes, a single-member limited liability company (SMLLC) is treated as a disregarded entity. That means that the income or loss of the entity is reported by an individual taxpayer on Schedule C of the taxpayer’s tax return. That also means that the entity is not required to file a partnership income tax…
Read MorePresentation Given to the Santa Cruz County Bar Association on the New LLC Act
On February 3, 2014, I gave a presentation to members of the Santa Cruz County Bar Association on the new limited liability company act and how it will affect their clients. I am pleased to report that the presentation was well attended, and the evaluations were uniformly positive.
Read MoreBar Talk on the New LLC Act
On Monday, February 3, 2014, I will be giving a continuing education seminar to lawyers on “California’s New LLC Act.” Anyone interested can register at the bar’s website: http://www.santacruzbar.org/ .
Read MoreChanges to California’s LLC Act — Get Ready or Get Skewered
California has a new LLC act, which took effect January 1, 2014. Although the new law has some useful features, most LLCs won’t need them. Unfortunately, the new law automatically applies to existing LLCs, and the new law contains provisions that can alter the setting for members of existing LLCs in a legally lethal way.…
Read MoreBuyer Can Access Pre-Acquisition Attorney-Client Communications
The Delaware Court of Chancery has held that pre-merger communications — including those relating to the negotiation of the merger itself — pass to the surviving corporation in the merger, absent a contractual provision to the contrary. Thus, the buyer can learn what the former owners of the corporation and the corporate attorney discussed about the merger.…
Read MoreForeign LLC Can Enforce Sister-State Judgment without Qualifying to Do Business
In Conseco Marketing, LLC v. IFA and Insurance Services, Inc. (2013) 221 Cal. App. 4th 831, the court held that a limited liability company formed under the law of another state (a “foreign LLC”) need not qualify to do business in California to enforce a judgment obtained in another state (a “sister-state judgment”). Under the…
Read MoreWebinar Presentation on Drafting Buy-Sell Agreements
On November 14, 2104, I conducted a webinar on “Drafting Buy-Sell Agreements–What the Forms Books Won’t Tell You.” The program was jointly sponsored by the Corporations Committee and the Partnerships and LLC Committee of the Business Law Section of the State Bar of California.
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