No “Selective Waiver” of Attorney-Client Privilege

To show that they are good citizens, public companies are often encouraged by the government to investigate wrong-doing by their employees and then to take corrective action. Often these internal investigations are conducted by outside legal counsel, who prepare a … Continue reading

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Court Holds Business Judgment Rule Does Not Protect Officer’s Decisions

The business judgment rule insulates directors from liability from bad decisions if certain conditions are met. A recent U.S. District Court opinion holds that the business judgment rule does not apply to corporate officers. Federal Deposit Insurance Corp. v. Perry … Continue reading

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Licensed Clinical Counselors Allowed to Form Professional Corporations

Under the Moscone-Knox Professional Corporation Act, lawyers, physicians, and others engaged in occupations specified by the act may organize their practices as professional corporations. By reason of Chapter 381 of the Statutes of 2011, the Moscone-Knox Professional Corporation Act has … Continue reading

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Corporations and LLC’s May Elect to Receive Notices From the Secretary of State via E-Mail

Existing law requires corporations and limited liability companies to file with the Secretary of State annual statements of information with specified information. To aid these entities in filing timely, the Secretary of State mails a notice to them three months … Continue reading

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Labor Code section 2802 Does Not Apply to Employer’s Unsuccessful Suit Against Employee

In Nicholas Laboratories, LLC  v. Chen (October 12, 2011) 11 C.D.O.S. 12769, the court decided that an employer was not obligated to indemnify its employee for expenses the employee incurred in successfully defending himself against employer’s lawsuit for breach of … Continue reading

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California rejects “zone of insolvency” theory of director liability

The general rule is that directors of a corporation owe no duty to creditors because it is the shareholders who own a corporation. From an economic perspective, when a corporation is solvent, it is the shareholders who are the residual … Continue reading

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Whom Does an Attorney Represent When a Number of Parties Are Involved?

The case of Chang v. Lederman (2009) 172 Cal. App. 4th 67, while dealing with the obligations of an estate planning lawyer to beneficiaries of the estate, may be of interest to participants in business transactions or business enterprises. Facts … Continue reading

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Inspection Rights of Directors and Shareholders

Corporations Code section 1602 provides that: “Every director shall have the absolute right at any reasonable time to inspect and copy all books, records and documents of every kind … of the corporation of which such person is a director….” … Continue reading

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Personal Liability of Officers for Corporate Obligations

In People v. Roscoe (2008) 169 Cal. App. 4th 829, two individuals (John F. Roscoe and Ned F. Roscoe) were officers, directors, and shareholders of a family company for an underground storage tank that leaked over 3,000 gallons of gasoline … Continue reading

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