Articles in Corporate Law

PREFERRED STOCKHOLDERS LOSE CLEVER REDEMPTION ARGUMENT

Date: February 3rd, 2011

As many company founders know, preferred stock financings with venture capital firms and other savvy investors frequently involve a redemption right. The redemption right gives an investor the right at some time in the future to compel the company to buy back the stock the … Read More »

NEW YORK COURT HOLDS GENERAL COUNSEL WAIVED ATTORNEY-CLIENT PRIVILEGE BY NOT MAINTAINING ACTIVE BAR STATUS

Date: October 5th, 2010
Categories: Corporate Law

One of the most important tools executives have to investigate potential legal issues is the ability to speak openly with in-house company lawyers without fear such conversations will become public. It is reasonable for executives to think conversations with in-house counsel are always protected by … Read More »

REVERSE STOCK SPLITS CAN BE USED TO FORCE OUT MINORITY SHAREHOLDERS, SAYS WASHINGTON SUPREME COURT

Date: September 28th, 2010
Categories: Corporate Law

On July 22, 2010, the Washington State Supreme Court dealt a serious blow to the prospects of minority shareholders who are forced out of corporations through corporate restructuring techniques that are expressly allowed under the Washington Business Corporations Act (WBCA). One of those techniques is … Read More »

DELAWARE COURT OF CHANCERY RULES PREFERRED STOCKHOLDERS CAN BRING STOCKHOLDER DERIVATIVE ACTIONS

Date: July 1st, 2010
Categories: Corporate Law

In MCG Capital Corp. v. Maginn (Del. Ch., Civil Action No. 4521-CC, May 5, 2010), the Delaware Court of Chancery decided the first case to come before it directly addressing the standing of a preferred stockholder of a Delaware corporation to bring a stockholder derivative … Read More »

WASHINGTON’S NEW TAX LAWS TARGET BUSINESSES, DEALS, DIRECTORS AND OFFICERS

Date: April 26th, 2010

On April 23, 2010, Governor Christine Gregoire signed into law a $794 million tax-increase bill. The new law, known as Second Engrossed Substitute Senate Bill 6143-S.PL(2ESSB 6143), is 113 pages long and covers numerous issues, but four issues struck me as being particularly relevant to … Read More »

WHO IS ON THE HOOK, YOU OR YOUR COMPANY?

Date: April 13th, 2010

On April 12, 2010, Washington’s Court of Appeals (Division I) handed down an opinion that should be an important lesson for all business owners. If the party entering into a transaction is an entity, and not the entity’s owners, then the contract language, not just … Read More »

SUPREME COURT SIMPLIFICATION OF CORPORATE CITIZENSHIP A WIN FOR BUSINESS

Date: March 22nd, 2010
Categories: Corporate Law

It’s the question on every CEO’s or CFO’s mind: “Which is my business’ state of corporate citizenship for purposes of federal diversity jurisdiction under 28 U.S.C. § 1332?” Okay, maybe not. Perhaps it’s far more accurate to say that most corporate executives aren’t concerned on … Read More »

ARE WULPA LIMITED PARTNERSHIPS THE NEW LLC IN 2010?

Date: January 8th, 2010

Back in October of 2009, I published an article on the myriad of problems plaguing Washington LLCs, many of which arose out of uncertainty, inconsistencies and gaps in the Washington Limited Liability Company Act (the “LLC Act”). That same month, my colleague, Joe Campos, published … Read More »

SENATOR KERRY PROPOSES LEGISLATION RESTRICTING CLASSIFICATION OF WORKERS AS INDEPENDENT CONTRACTORS

Date: January 7th, 2010
Categories: Corporate Law

On December 15, 2009, Sen. John Kerry (D-Mass.) introduced the Taxpayer Responsibility, Accountability and Consistency Act of 2009 (S. 2882). The proposed legislation is quite similar to a bill (H.R. 3408) introduced in the House of Representatives by Rep. Jim McDermott (D-Wash), and is intended … Read More »