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Changes to California’s LLC Act — Get Ready or Get Skewered

01/02/2014

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…

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Buyer Can Access Pre-Acquisition Attorney-Client Communications

12/20/2013

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…

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Foreign LLC Can Enforce Sister-State Judgment without Qualifying to Do Business

11/29/2013

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…

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Webinar Presentation on Drafting Buy-Sell Agreements

11/15/2013

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…

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Assignee of Suspended Corporation Cannot Sue on Assigned Claim

11/01/2013

In Cal-Western Business Services, Inc. v. Corning Capital Group, Inc. (2013) 221 Cal. App. 4th 304, a judgment creditor assigned to Pacific West One Corp. the judgment creditor’s interest in a judgment against Corning Capital. Then, at a time when Pacific West…

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Filing Requirements and Suspension of Corporate or LLC Powers

08/04/2013

California limited liability companies (LLCs) and California corporations are creatures of statute, and their failure to comply with statutory requirements can lead to their rights, powers, and privileges being suspended by the state. Annual Report to Secretary of State Each…

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Court Permits Assets of Business Entity to Be Used to Satisfy Creditors of Related Entity

07/25/2013

In Toho-Towa Co., Ltd., v. Morgan Creek Productions (2013) 217 Cal. App. 4th 1096, the court held that the assets of one business entity could be used to satisfy the obligations of a different, but related, business entity. This case deals…

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Excluding Assets From a Personal Guaranty

07/22/2013

The following is the text of an e-bulletin that I prepared that was published by the Corporations Committee of the Business Law Section of the State Bar of California. This was republished (under the title of “Excluding Assets from a…

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Third-Party Liability for Securities Fraud

07/02/2013

In some cases, a service provider associated with a business, such as an accountant, banker, broker, or lawyer, can be held liable for untruths or omissions made by the business in connection with the sale of stock (or other securities,…

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Supreme Court Decides California Law Does Not Apply to Dissolved Out-of-State Corporation That Did Business in California

02/22/2013

In Greb v. Diamond International Corporation (Feb. 21, 2013), the Supreme Court of California held that Delaware law governs the time for bringing an action in California against a dissolved Delaware corporation. In December 2008, plaintiffs Walter Greb (now deceased)…

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