If You’re an Investor In a Start Up and You Lose All Your Money, What Are Your Options?

Investing in a startup requires a healthy appetite for risk, and with startups sometimes you have to kiss a lot of frogs to find a prince or princess.  When the start up you’ve invested in fails, there are prudent steps to take before the company  closes its doors (or garage doors).

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CALIFORNIA EMPLOYMENT LAW ALERT-JUNE 2018

California Employers face ever changing requirements in the second half of 2018—minimum wages are going up in certain cities arbitration agreements can include class action waivers, national origin discrimination expanded, and a new test to determine whether a worker is an “independent contractor” or an employee.

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Court of Appeal Says Complete and Final Agreement is Sort of Complete, Kind of Final, Maybe Neither.

We’ve previously discussed integration clauses in contracts providing that a written agreement is the complete and final expression of the parties’ agreement and that it cannot be contradicted by evidence of a prior or contemporaenous oral agreement. If you want the term in the contract then it should go in. This is contained in California Code of Civil Procedure Section 1856. Fair enough.

In late December, the California Court of Appeal decided Albert Kanno v. Marwit Capital Partners II, L.P. involving Albert Kanno’s sale of three businesses to a private equity fund. There were three agreements--a sale agreement, stock subscription agreement, and stockholder agreement, and all three had integration clauses. But Kanno alleged there was also an oral Stock Redemption Agreement.

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Loan Renegotiation is "New Phase" in Lending Relationship, May be Considered in whether Lender Breached Duty of Care

Back in March, a California Bankruptcy Court ruled “Franz Kafka lives [and] he works at Bank of America,” describing the bank as “heartless” in improperly foreclosing on houses, and summarized the homeowners’ ordeal with the bank as a “Kafkaesque nightmare.”

Now, closing out the year, a California Appeals Court has gotten in on the lender liability action. (Rossetta v. CitiMortgage Inc. (Dec. 18, 2017.)) This time the bank is CitiMortgage, and instead of improper foreclosures, the case involves an over two-year-long home loan modification application process.

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Courts Of Appeal Give Yelp Arguments Re: Reviewer Anonymity One Star

In the ongoing battle over First Amendment rights to anonymity online, two recent California Court of Appeal decisions involving lawsuits against anonymous reviewers on Yelp.com (together with its owner, Yelp Inc., “Yelp”) provide a tentative roadmap for businesses and individuals seeking protection from defamatory online posts.

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California Court of Appeal Clarifies Good Faith Defense Against Fraudulent Transfer Claims

In its recent decision in Nautilus, Inc. v. Yang, the California Court of Appeal for the Fourth District addressed a split of authority regarding the good faith defense to fraudulent transfer claims in California.

In 1986, California adopted, with minor alterations, the Uniform Law Commission’s Uniform Fraudulent Transfer Act as Civil Code sections 3439, et seq.  Effective January 1, 2016, that chapter was amended and renamed the Uniform Voidable Transactions Act (the “UVTA").  The UVTA creates a civil cause of action by a creditor against a debtor, the debtor’s transferees, and/or the subsequent transferees of the debtor’s transferees to void transfers made by the debtor to defraud the creditor or prevent the creditor from collecting on his claim.  Civ. Code § 3439.07(a).  A creditor’s claim is defined broadly to include almost any right to payment, including an accrued cause of action or a judgment.  Civ. Code § 3439.01(b).

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Another Unfavorable Appellate Court Ruling for Employers-Court Mandates Rest Periods for Commission Only Employees

Following on the heels of the California Supreme Court decision in Agustus, et al. v. ABM Security (holding that employers cannot require their employees to remain on-call during legally mandated rest periods) the California  Court of Appeals for the Second District issued a decision concerning compensation for rest periods taken by commissioned employees. In Vaquero v. Stoneledge Furniture LLC, B269657 (February 28, 2017), the Court tackled the issue of whether employers are required to separately compensate commissioned employees for rest periods taken during the work day in accordance with the state’s labor laws. 

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California Court of Appeal Reinstates Real Estate Brokerage Commission Lawsuit

In its recent decision in Jacobs v. Locatelli, H042292 (Feb. 8, 2017), the Sixth Circuit Court of Appeals held that when one of several real estate owners signs on behalf of the others, a claim for a brokerage commission is not automatically barred by the statute of frauds and the parol evidence rule.

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Shareholder Litigation to Obtain Corporate “Books and Records” to Value Company and Investigate Wrongdoing

The Delaware Chancery Court has issued two recent opinions describing shareholder rights to inspect corporate books and records. Both cases center on Delaware General Corporation Law, Section 220, under which shareholders “have the right ... to inspect for any proper purpose … [t]he corporation's stock ledger, a list of its stockholders, and its other books and records[.]” 8 Del. C. § 220. 

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Issue Spotter: In California, Sometimes Written Contracts Aren’t Worth the Paper They’re Written On

A 2013 California Supreme Court case has brought about a sea change in how far parties can rely on their written agreements, with the repercussions playing out in real time. 

The "parol evidence rule" provides that, when parties enter into a written contract intended to be the final expression of their agreement, they can't use extrinsic evidence (evidence outside the agreement, like prior or contemporaneous oral agreements or statements) to alter or add to it. This is why contracts commonly contain an “integration clause”, essentially saying this is the final and only expression of the parties’ agreement. Outside evidence can be used to clear up places where the contract is ambiguous--but it can’t contradict what’s in the agreement. 

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California Supreme Court to Employers: No More On-Call Rest Periods

Today, the California Supreme Court handed down its decision in one of the most-watched labor and employment cases of 2016.  In its opinion in Augustus, et al. v. ABM Security Services, Inc., S224853 (December 22, 2016), the Court held that employers may not require employees to remain "on-call" during required rest periods.  The decision, which reverses a Court of Appeal decision that was celebrated by many in the business community, may have enormous ramifications for California employers. 

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