Allen Matkins

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Section 25400(d) of the California Corporations Code declares it is unlawful for any person, directly or indirectly, in this state: If such person is a broker-dealer or other person selling or offering for sale or purchasing or offering to purchase the security, to make, for the purpose of inducing the purchase or sale of such security by others, any statement which was, at the time and in the light of the circumstances under which it…
Last week, Liz Dunshee at TheCorporateCounsel.net noted that ISS has updated its policies and procedures to explain how it assesses racial and ethnic diversity.  Currently, ISS considers board diversity in making voting recommendations for two of its specialty policies: Socially Responsible Investing (SRI) and Catholic Faith-Based.  Beginning in 2021, ISS, under its U.S. Benchmark policy, began identifying companies United States companies that have no apparent racial or ethnic diversity amongst directors.  For shareholder meetings after…
Last week, the California Secretary of State’s Business Programs Division received the 2021 Merit Award from the International Association of Commercial Administrators (IACA) for its new eForms Online application.  According to its website, the IACA is “a professional association for government administrators of business organization and secured transaction record systems at the state, provincial, territorial, and national level in any jurisdiction which has or anticipates development of such systems”.  The California SOS has been steadily…
William Romanowski is a former NFL linebacker who later became the majority shareholder, director, and “public face” of Nutrition 53, Inc.  When the company’s second largest shareholder was allegedly denied inspection of the corporate records, it sued the company and Mr. Romanowski for breach of fiduciary duty and violation of California’s shareholder inspection statute – Corporations Code Section 1601.   Earlier this month, U.S. District Court Judge John A. Mendez dismissed both causes against Mr. Romanowski. …
About eight years ago, I wrote about Section 201(a) of the California Corporations Code which prohibits the Secretary of State from filing articles of incorporation  setting forth a name in which “bank,” “ trust,” “trustee,” or related words appear, unless a certificate of approval of the Commissioner of Financial Protection & Innovation is attached thereto.  The statute quite clearly does not prohibit a corporation from using the word “bank” in its business. Chime Financial Inc.…
Yesterday, I listed to a talk by Vice Chancellor J. Travis Laster of the Delaware Court of Chancery entitled “Purpose, Power, and Fiduciary Duty: Dimensions of Delaware’s Corporate Law Regime”.  The webinar was presented by the University of Delaware’s John L. Weinberg Center for Corporate Governance.  Vice Chancellor Laster took a very deferential view of a board’s decisions to donate corporate assets – applying a standard of rationality, not reasonableness.  Notably, he did not…
On Monday, John Jenkins at Deallawyers.com wrote about a recent Delaware Court of Chancery decision finding that as alleged, “the Director Defendants’ decisions to delegate the Proxy to the Conflicted Officer Defendants and forego reviewing it before filing, as well as their failure to correct the Proxy’s alleged false and misleading statements, are actionable as bad faith.”   In Re Pattern Energy Group Inc. Stockholders Litigation, (Del. Ch.; 5/21), John’s post reminded me of…
When a California corporation merges into a foreign corporation, the merger becomes effective in accordance with the law of the jurisdiction in which the surviving corporation is organized.  In California, the merger will be effective as to the disappearing California corporation as of the time of effectiveness in the foreign jurisdiction upon making the required filing with the California Secretary of State.  Cal. Corp. Code §  1108.   If, for example, a California corporation merges into a…
Sometimes a corporation will for one reason or another fall into desuetude, with all of the directors and officers having resigned or died.  If the corporation has not dissolved and wound up, the shareholders remain shareholders as there is no expiration date on their shares.  If, perchance, a shareholder discovers that the corporation has some remaining assets, there may be a desire to reconstitute the board and management.  The problem is that that there are…
When allegations of corporate misfeasance surface at public companies, derivative actions are sure to follow.  Often, actions will be filed in both state and federal court.  This is what happened when “sexual misconduct” claims were made made public against the former CEO of Wynn Resorts.  In that case, multiple plaintiffs filed derivative claims in federal and state courts.  After the state court plaintiffs’ cases were consolidated, a settlement was reached.  The federal plaintiffs  then entered…