What is a Professional Corporation?

According to the law in California (the Moscone-Knox Professional Corporation Act), a professional corporation is a corporation that is engaged in rendering professional services. In this context, “professional services” are any type of professional services that may be lawfully rendered … Continue reading

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Legislature Expands Shareholder Inspection Rights

The Corporations Committee of the Business Law Section of the California Lawyers Association today published an e-bulletin, which I authored. The text follows: The legislature amended Corporations Code § 1601, which grants shareholders the right to inspect and copy corporate … Continue reading

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Bad Corporate Practice Leads to Bad Result

I recently had a practice note published in the February 2019 eNews from the Business Law Section of the California Lawyers Association. What follows is the text that was submitted for publication. The Delaware Court of Chancery found that a stockholder … Continue reading

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Business Law Attorney Richard Burt Helps Draft New Corporate Law

A corporation is typically dissolved when the shareholders holding shares that have 50% or more of the voting power elect to dissolve. When an order for relief has been entered under Chapter 7 of the U.S. Bankruptcy Code, the board … Continue reading

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Officer Liable for Restitution of Corporation’s Gains in Violation of FTC Act

In Federal Trade Commission v. Commerce Planet, Inc. (9th Cir. March 3, 2016) 16 C.D.O.S. 2355, the Federal Trade Commission (FTC) sued Commerce Planet, Inc., and three of its top officers for violating § 5(a) of the FTC Act, which … Continue reading

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Misleading Certificate of Status Solicitations

The California Secretary of State has issued warnings about misleading certificate of status solicitations. Directors and officers of corporations and managers and members of limited liability companies (LLCs) should be wary of such solicitations. As a public service, the text … Continue reading

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Breach 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 … Continue reading

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Bylaw Indemnification and the Statute of Frauds

In a recent post on his blog, Keith Bishop asks the question, Are charter indemnification provisions contracts? Many companies include provisions in their articles and bylaws that mandate indemnification of directors and officers, and they often say that they are … Continue reading

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Ex-CFO Allowed to Sue for Defamatory Innuendo in Press Release

In Hawran v. Hixson (2012), the court allowed a CFO who had resigned from a public company to sue the company and certain directors because the company’s press release implied that he had engaged in misconduct. Sequenom was a publicly … Continue reading

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Shareholder Loses Standing to Maintain Derivative Action After Merger

In Villari v. Mozilo (2012) 208 Cal. App. 4th 1470, the court held that under Delaware law a shareholder who was a plaintiff in a shareholder derivative action lost standing to maintain that action once a merger resulted in the … Continue reading

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