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

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 … Continue reading

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

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) … Continue reading

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Home State Law Applied to Dissolved Corporation

In Robinson v. SSW, Inc. (2012), a California court applied Nebraska law to determine the liability of a dissolved Nebraska corporation for injuries the corporation allegedly caused to a California resident. Douglas G. Robinson died in November 2005 from mesothelioma, a … Continue reading

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Inconsistent Use of Entity Name Proves Costly

In Montgomery Sansome v. Rezai (March 28, 2012) 204 Cal. App. 4th 786, the court held that a construction contractor’s designation of an entity as a “general partnership” in a fictitious business name statement when the contractor was licensed as … Continue reading

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Removal of Officer of Delaware Corporation May Be Partly Governed by California Law

In Lidow v. International Rectifier Corp. (2012) 206 Cal. App. 4th 351, the court held that, notwithstanding the conflict of laws principle known as the internal affairs doctrine, where a foreign corporation is alleged to have removed or constructively discharged … 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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Architects Granted Reprieve on LLP’s

Persons licensed to engage in the practice architecture, public accountancy, engineering, land surveying, or law may form a limited liability partnership to engage in those professions.  A limited liability partnership is a general partnership that limits the liablity of the … Continue reading

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Demise of the Notion That Alter Ego Claims Belong to the Bankruptcy Estate

Shaoxing County Huayue Import & Export v. Bhaumik In Shaoxing County Huayue Import & Export v. Bhaumik (2011) 191Cal.App. 4th 1189, a creditor of a bankrupt corporation sued in state court to recover payment from an individual based on an … Continue reading

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Alter Ego Claims of Creditors Do Not Belong to Bankruptcy Trustee

In Ahcom, Ltd. v. Smeding, 623 F.3d 1248 (9th Cir. 2010), the U.S. Court of Appeals for the Ninth Circuit decided the question whether a creditor of a corporation that is in bankruptcy has standing to pursue a claim against … 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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