Non-Compete Clauses for Employees Become Radioactive in California

California has for over 80 years prohibited covenants not to compete (also called non-compete clauses) except in a handful of cases. The basic prohibition is in Business & Professions Code § 16600, which provides: Except as provided in this chapter, … Continue reading

Posted in Business Disputes, Covenant not to compete | Tagged , , , , | Comments Off on Non-Compete Clauses for Employees Become Radioactive in California

California Corporations Code Not Applied to Avoid Dissolution of Foreign Entities

When an action is brought to dissolve a California limited partnership or a California limited liability company, the California Corporations Code allows the other partners or the other members to avoid the dissolution by purchasing, for cash, the interests owned … Continue reading

Posted in Business Disputes, Buy-Sell Agreement, Corporate Law, Entity Law, Foreign LLC, Limited Liability Comanies (LLC's), Limited liability companies (LLC), Limited Partnerships | Tagged | Comments Off on California Corporations Code Not Applied to Avoid Dissolution of Foreign Entities

Civil Code Sections relating to General Releases Modified

On February 28, 2019, the Corporations Committee of the Business Law Section of the California Lawyers Association published an e-bulletin that I authored. The text of the e-bulletin, as submitted for publication, follows. With SB 1431 (chapter 157, statutes of … Continue reading

Posted in Business Disputes, Commercial Law, Contract Drafting | Tagged , | Comments Off on Civil Code Sections relating to General Releases Modified

Delaware Court Upholds Non-Compete against California Employee

The following is the text of an e-bulletin that I wrote and that was published by the Corporations Committee of the Business Law Section of the California Lawyers Association. Patrick Miles, a California resident, was first hired in 2001 by … Continue reading

Posted in Business Disputes, Contract Drafting, Corporate Law, Covenant not to compete, Non-competes | Tagged | Comments Off on Delaware Court Upholds Non-Compete against California Employee

Buy-Sell Agreements in the Articles of Incorporation

Under the Corporations Code, if there is a suit for involuntary dissolution, or if there is an election to dissolve voluntarily by shareholders representing only 50% of the voting power of the stock, the dissolution of the corporation and the … Continue reading

Posted in Business Disputes, Buy-Sell Agreement, Corporate Law, S corporations | Tagged , , , , | Comments Off on Buy-Sell Agreements in the Articles of Incorporation

LLC Bound by Contract Even Though Contract Was Outside Its Purpose and Signatory Was Technically Not a Manager

The following is the text of an e-bulletin that I authored on apparent authority and that was published by the Corporations Committee of the Business Law Section of the State Bar of California. In  Western Surety Co. v. La Cumbre … Continue reading

Posted in Business Disputes, Commercial Law, Contract Drafting, Corporate Law, Entity Law, Limited Liability Comanies (LLC's), Limited Liability Partnerships, Limited Partnerships, Uncategorized | Tagged , , , , , , , , | Comments Off on LLC Bound by Contract Even Though Contract Was Outside Its Purpose and Signatory Was Technically Not a Manager

Perfected Security Interest Yields to Breach of Fiduciary Duty

If a party succeeds in perfecting a security interest in personal property by breaching a fiduciary duty, the security interest may be disregarded for the benefit of the person owed the fiduciary duty. In Feresi v. The Livery, LLC (2014) … Continue reading

Posted in Business Disputes, Limited liability companies (LLC) | Tagged , | Comments Off on Perfected Security Interest Yields to Breach of Fiduciary Duty

Changes 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 … Continue reading

Posted in Business Disputes, Entity Law, Limited liability companies (LLC) | Tagged , , , , , | Comments Off on Changes to California’s LLC Act — Get Ready or Get Skewered

Excluding Assets From a Personal Guaranty

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 … Continue reading

Posted in Business Disputes, Commercial Law, Contract Drafting | Tagged , , | Comments Off on Excluding Assets From a Personal Guaranty

Superfluous Text in a Contract Opens Door to Litigation

The recent case of Schron v. Troutman Saunders LLP, from the New York Court of Appeals, New York’s highest court, shows the importance of not including unnecessary verbiage in a contract just because it’s traditional. In this case, an LLC … Continue reading

Posted in Business Disputes, Contract Drafting | Tagged , , , | Comments Off on Superfluous Text in a Contract Opens Door to Litigation