Allen Matkins

Latest from Allen Matkins

I first wrote about the preclusive effect, if any, of a dismissal of a parallel derivative action some nine years ago when I wrote about Vice Chancellor J. Travis Laster’s ruling in La. Mun. Police Emples. Ret. Sys. v. Pyott, 46 A.3d 313, (2012).  See Delaware Court of Chancery Overrules Federal Court.  A year later, the Delaware Supreme Court reversed that ruling in Pyott v. La. Mun. Police Emples.’ Ret. Sys., 74 A.3d 612.  See…
Professor Stephen Bainbridge recently addressed the question of whether a board of directors could delegate to the CEO the decision about when and whether to sell the company.  Professor Bainbridge points out that the CEO is an agent of the corporation and a board can vest authority in the corporation’s agents.   As a question of agency law, I agree that a board could delegate to the CEO decisions as to when, whether and on what…
May a California corporation issue shares that are convertible ex proprio motu into shares of any other class or series or any other of its securities?  The answer is “yes” but only if that right is provided in the articles of incorporation and then only in two limited circumstances. The first is when the corporation has a license or franchise from a governmental agency to conduct its business or the corporation is a member of…
Lynn Jokela at TheCorporateCounsel.net blog took note yesterday of recently updated guidance from the SEC’s Division of Corporation Finance concerning the conduct of shareholder meetings in light of the Covid-19 pandemic.  Among other things, the guidance observes: “Exchange Act Rule 14a-8(h) requires shareholder proponents, or their representatives, to appear and present their proposals at the annual meeting.  In light of the possible difficulties for shareholder proponents to attend annual meetings in person to present their…
Today, the California Senate Environmental Quality Committee is scheduled to hear SB 260, aka the Climate Corporate Accountability Act.  This bill would require the California Air Resources Board to adopt regulations develop and adopt regulations requiring business entities with total annual revenues in excess of $1 billion and that do business in California publicly to  disclose their greenhouse gas emissions.  The bill requires of disclosure of three types of emissions: “Scope 1 emissions” – …
Sometimes people get confused and will file a certificate of cancellation or dissolution with the California Secretary of State when the entity has not dissolved, much less completely wound up its affairs.  The challenge then becomes how to resurrect an entity that is dead as far as the State of California is concerned.  Indeed, the Corporations Code provides no means for revivifying the entity. The solution lies in Article 6, Chapter 3, Part 2, Division…
State corporate laws are surprisingly sparse on the details of annual meetings.  The California Corporations Code, for example, requires that a corporation hold an annual meeting for the election of directors but does not detail who can or cannot attend that meeting.  Cal. Corp. Code § 600(b).  Given this legal lacuna, do shareholders have a right to attend meetings of shareholders and can corporations impose conditions upon attendance? Many publicly traded companies do impose conditions…
Muddy Waters is a firm engaged in financial analysis and short selling.  After taking a short position in the stock of a publicly traded Chinese company, Muddy Waters published two negative reports referring to the company on a website.  The Chinese company then sued for unfair competition (Cal. Bus. & Prof. Code § 17200 et seq.), trade libel, and intentional interference with prospective economic advantage.   Muddy Waters filed a special motion to strike the complaint under California’s…
The California Corporate Securities Law of 1968 declares it unlawful for any person to offer or sell in this state any security in an issuer, nonissuer, or reorganization transaction unless the sale has been qualified or is exempt or otherwise not subject to qualification.  Cal. Corp. Code §§ 25110, 25120 & 25130.  If offers are “unlawful” are they actionable or must there be a sale?  In other words, does the CSL observe a “no harm, no…
In March, the Securities and Exchange Commission announced its first securities enforcement action involving the “dark web”.  The SEC’s complaint describes the “dark web” as referring to “a subset of the deep web that is intentionally hidden, requiring specific software to access content”.   The SEC states that the “deep web” refers to “anything on the internet that is not indexed by, or accessible via, a search engine like Google”. The SEC’s complaint alleges that,the defendant…