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99 Cards in this Set
- Front
- Back
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Search and Seizure: Global Analysis
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1. Does 4A apply?
2. Is search conducted with warrant that satisfies 4A? 3. Is search conductedd w/out a warrant but still satisfies 4A? 4. Is impermissible evidence nevertheless admissible |
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Search and Seizure: Does 4A apply?
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Test
[1] Govt agent? [2] REOP? [3] Standing? [1] Was search executed by government agent? (Police, Security guard w police power (campus cops) OR private citizen acting at direction of popo) [2] Was there a reasonable expectation of privacy in the area where conducted or in the items seized? -- Protected: Body, House (incl hotel and cutilage), Papers, Effects (backpack, wallet, purse) -- Unprotected: Things put on public display or viewable by general public. (paint scrapings on car, account records in bank, brids eye view of property, trash, order, handwriting, voice exemplar, open fields (anything past curtilage) [3] Standing: YOU must have REOP in area to be searched or item seized a. Big Trick: Owner of item has not REOP UNLESS he has it in area where taken (guy puts drugs in gfs purse) b. House Standing: -- Owner and Renter - REOP -- Long/Overnight Guest (reasonable access areas); -- Business guest - no REOP (rolling J's in client's house) (homeowner could challenge if SHE was charged) c. Cars: -- Passenger's pot found under seat in Driver's car has NO REOP in another's car. -- Passenger's pot found in passenger's coat while in Driver's car - YES REOP in your own coat, not matter if you're in driver's car! NY = Passenger can challenge weapon if possession is attributed to them. |
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Search and Seizure: Did the search satisfy the warrant requirement? - Issues (4)
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4 Issues:
[1] PC + [2] Particularity + [3] Good Faith + [4] Properly Executed |
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Search and Seizure: PC
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PC: Fair probablility that contraband or evidence of crimes will be found in area searched
Hearsay/Tipsters OK A. CL TEST: Must have corroberation of enough of the tip to allow a "common sense determination" of PC -- diff w/ NY: Anonomous tip ok w/ enough corroberation) B. NY TEST: (aguilar-spinelli): Govt must est. both (1) Informant's basis of knowledge AND (2) His veracity/reliability -- difference with CL: tough to get anonomous tip in) |
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Search and Seizure: Particularity
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[2] Particularity: Warrant must be specific to (1) area to be searched, and (2) items to be seized
--Trick: No general warrant ("search apartment, including closed containers, for evidence of murder"). No Fishing, gotta be looking for something/somewhere specific |
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Search and Seizure: Warrant Requirement - Good Faith
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Good Faith: Good faith overcomes PC and Particularity infirmities
But note: NO good faith in NY! 4 Exceptions -- a. Egregiously lacking in PC such that "no reasonable officer" would rely. -- b. Facially deficient in particularity that "reasonable officer" would not think valid -- c. Affivadit contains knowing/reckless falsehoods -- d. Magistrate biased in favor of prosecution (gets paid per warrant) NY EXCEPTION: No Good Faith Exception |
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Search and Seizure: Warrant Requirement - Proper Execution
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Two Requirements:
(1) Compliance with Terms of Warrant (2) Knock and Announce: 1. Compliance: a] Only areas specified + [b] Only containers that can hold evidence to be found, [c] Stay within scope of warrant. --Trick: be specific: search for firearm means CANNOT open jewelry box --Trick: item AND area: firearm in living room means CANNOT look for firearm in kitchen 2. Knock & Announce = Must do it unless [a] futile, [b] dangerous, or [c] inhibit investigation and even then NOT excluded! |
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Search/Seizure: If warrantless, still okay:
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8 Exceptions: ESCAPIST
1. Exigency 2. Seach incident to arrest 3. Consent 4. Automobile 5. Plain View 6. Inventory Search 7. Special Needs 8. Terry Stop |
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Search and Seziure: Warrant Exceptions: Exigent Circumstances
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Two Types
1. Evanescent = Evidence that would disappear in time to get warrant (DUI blood evidence). 2. Hot Pursuit = Any evidence discovered in plain view (even in 3P house). |
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Search and Seizure: Warrant Exceptions: Search Incident to Arrest
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Elements: [1] lawful, [2] contemperaneous, [3] within proper scope; [4] Special Automobile Rule
[1] Arrest must be lawful [2] Timing: Search must be contemporaneous in time and place with arrest. [3] Scope: May only search arrestee’s body, clothing,and containers in immediate control.(trick: WITHOUT regard to offense for which arrest was made (can search person evenif arrested for tax evasion) -- NY EXCEPTION: Can search containers in wingspan ONLY IF believe arrestee is armed (and THEN only containers that could have a weapon) [4] Automobile MBE: SITA includes interior cabin and closed containers BUT NOT locked containers or trunk. --MBE Exception: If arrestee SECURED, search only if reason to believe it has evidence related to arrest crime. -- NY Exception: Cannot search closed containers once suspect is out of car |
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Search and Seizure: Consent
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Elements:
[1] Voluntary [2] Authority [3] Intelligent [4] Scope [1] Voluntary = Not Coerced [2] Authority = Person consenting just needs "apparent authority" (gf w keys let cops into bfs house) -- Tricks: Shared permises: Any roomate can give consent for "shared" spaces (but NOT private spaces) UNLESS roomates disagree --> Disagreeing Tenant Wins. [2] Intelligent: Must be knowing. BUT police do NOT have to tell suspect he can refuse [3] Scope: This is the GAME - in the scope of what was consented to? |
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Formation of Corporation: Analysis
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People, place, acts
1. Incorporators 2. Paper 3. Signing certificate and holding organizational meeting |
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Formation of Corporation: Incorporators
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Just need 1 adult, human (no entities)
What they do: Execute and delivery certificate and hold organizational meeting (the "acts") |
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Formation of Corporation: Certificate of Incorporation
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K between (1) corp and sholders and (2) corp and state
What goes in (list) [1] Name and address of corp [2] Agent for service [3] Names/address of incorp. [4] Purpose [5] Captial structure [6] Durational (optional) 1. Names/address of corp -- Name must say corp, incorp, ltd -- Address: county in NY (county of incorp) but does not need to be princ. place of bus. 2. Agent for Service for Sec of State 3. Name/adress of each incorporator 4. Statement of purpose (can be super vague) but MUST stay within SCOPE of purpose --If Breach Scope -- -- Don't disolve (ultra virus issue -- -- S can enjoin action or -- -- Responsible managers liable for any LOSSES 5. Capital Structure (a) authorized stock, (b) issued stock, (c) outstanding stock. ANYTHING Capital related MUST be IN (number of shares/class, par value, rights/preferences of classes) 6. Duration (optional) - but corp can live forever |
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Formation of Corporation: Acts
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1. Each incorporator signs certificate before notary and delivers to Dept of State. If conforms, Dept/State files certification-->conclusive evidence of valid formation
2. Incorp. then holder Organizational Meeting where (a) adopt bylaws (b) elect initial directors (board) (c) board takes over -- meeting can be by written consent |
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Benefits/Consequences of Incorporation (3)
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1. Choice of law. NY governs internal affairs of corp REGARDLESS of where corp does business
2. Seperate Legal Person: Can enter Ks, tranfers Property, buy/sell Securities, sue/be sued -- Tricks: -- -- pol. contrib. no more than 5K/yr per candidate or org -- -- charitable contribution - no ceiling -- -- Can guarantee loans NOT in furtherance of corp with 2/3 of shares entitled to vote Liability Shield: Corporation is liable, not directors or officers (why better than p'ship). Trick: Owners have "limited liability" - only as exposed as the value of the stock they own |
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Formation of Corporation: What if make mistake?
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Pretty much fucked.
2 options - De Facto Corporation/Corp by Estoppel: 1. De Facto Corp. a. Must have relevant incorp statute (BCL) b. Parties made good faith effort to comply with statute c. Businesses being run as corporation THEN treated ask corp for all cases except those brought by the state --BUT might be dead except where state fucked up (forgot to file after you did everything right) 2. Corp by Estoppel: Abolished in NY... (basically parties act is if there is a corp (no requirement to follow px) |
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Formation of Corporation: Bylaws
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Rule: Not required but everyone has them.
--NOT filed with state Hierarchy: If conflict with certificate, certificate controls When made: At Organizational Meeting, adopted by Incorporators Who can amend: -- Shareholders -- Board can amend ONLY if in certificate of if shareholders allow in bylaws |
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Pre-Corporation Ks: Corp liability (HUGE)
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Rule: Corp later liable ONLY if adopts.
-express by board action -- Implied adoption through action (corp knowingly accepts benefits) Rule: Promoter liable unless (a) K expressly says otherwise, or (b) NOVATION (agreement btw promoter, corp, 3d pty) --Trick: Novations requires agreement of all 3 (agreement of corp and promoter NOT enough) --Trick: If implied acceptance, promoter not off the hook - BOTH are on the hook |
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Pre-Corporation Ks: Promoter Liability
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Rules:
1. Promoter liable unless (a) K expressly says otherwise, or (b) NOVATION (agreement btw promoter, corp, 3d pty) 2. Secret Profit Rule: a. Promoter cannot make a secret profit. b. If he does has to account (repay) for the profit 1. General liability a. Novations requires agreement of all 3 (agreement of corp and promoter NOT enough) b. If implied acceptance, promoter not off the hook - BOTH are on the hook 2. Secret Profit: Must tell corp if he makes a profit (ie selling to them for profit) a. Profit = price paid - FMV --BUT depends on WHEN promoter got asset. -- -- (i) if BEFORE became promoter then we don't care -- -- (ii) if AFTER became promoter then do care bc that's profit Eg. Deal made before becoming promoter. Paid $1 for x. Sold for 40K to corp. Need to compare what corp paid to fmv to find out profit BUT DON"T CARE what he originally paid. HOWEVER, if bought for 18K AFTER became promoter and sold to K for 25K then 7K profit Trick: Liable ONLY if he DOES NOT DISCLOSE |
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Foreign Corporations
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Rule: Foreign corporations doing business in NY must QUALIFY (out of state or out of country corps)
1. Apply with NY Dept/State with (a) info from certificate, (b) proof of good standing at home 2. Designate Sec/State as agent for service Consequence: Cannot sue in NY until qualifies and pays taxes, fees, penalties, and interest |
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Issuance of Stock: Stocks v. Bonds
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Stock: Owner owns equity security which brings rights as owner of corp
Bonds: Loan from the corporation to be repaid as an agreement in K. Bond holder is creditor with debt security -- Debenture: Loan repayment which has not been secured by corporate assets Trick: Selling stock does not raise any capital for the corporation so issuance rules DO NOT APPLY |
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Issuance of Stock: Subscriptions (offer, revocation, acceptance, default)
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1. Offer: Offer from BUYER. Sounds in Contract. A WRITTEN and SIGNED offer to buy stock from the corp.
2. Revocation: a. Pre Incorp. Irrevocable for 3 months unless provides otherwise (so corp can rely on $$ being there) b. Post incorp. Revokable until accepted 3. Acceptance (by board) binds both parties. Board must unify with a class of stock 4. If buyer defaults a. If paid LESS than 1/2 then corp can keep cash and cancel shares (becomes authorized and unissued so corp can sell later) b. If buyer paid MORE than 1/2, corp must try to sell to cover BUT if nobody will pay then can keep cash and cancel shares (like above) |
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Issuance of Stock: Consideration (forms of cn)
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Corp must receive cn bc its a K
Forms: 1. Money 2. Tangible or Intangible asset 3. Services already performed 4. Binding obligation for $ 5. Binding obligation fot future servs. having AGREED VALUE Tricks a. Services in forming corp counts b. Any other cn = unpaid stock = water c. Stuff buyer did BEFORE can be valid cn (in K law sometimes that's no longer valid cn) |
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Issuance of Stock: Consideration (Amount - par, treasury stock, water) (BIG)
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1. Par = Minimum Issuance Price
a. No par issuance = no min. issuance price --> Board sets "price" (unless certif says sholders do it) b. corp can acquire property by issuing shares but value MUST MEET PAR AS DETERMINED BY BOARD (eg. 50K shars for $3 par means board must think prop is worth 150K) c. Example: If corp issues 1K in shars for $3 par then must get at least 30K (but can get more) 2. Treasury Stock = No Par a. Concept: Stock that was previously issued and has been reacquired by the corporation. But it has NO PAR (can buyer/sell for whatever price) 3. Consequences of issue waterer stock (sold below par) Rule: Corporation can sue Director and Buyer (but 3d pty who buys water from original buyer cannot be sued unless knew was water) |
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Issuance of Stock: Preemptive Rights (BIG)
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ConceptL Right of existing S to maintain percentage of ownership by buying stock whenever there is (a) NEW issuance OF (b) COMMON stock FOR (c) MONEY
Rule: Right only exists if certificate says so (if silent then not rt so BAR HAS TO TELL if in play). Tricks: - NO right if treaury strock issued - NO right if stock for property (only $$) -- New Issuance: If certificate silent, counts for issuances within 2 yrs of formation of corp (???) |
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Directors: Who and How Many
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Rule: 1 or more adult, humans.
Number set by 1. bylaws 2. shareholder act 3. by the board (if allowed by sholders) Default is 1 |
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Directors: Election
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1. Incorporators elect initial directors
2. Shareholders elect thereafter at annual meeting -- Don't have to elect every yr, can stagger (classified board) |
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Directors: Removal
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With Cause: Yes. By Shareholders. (Board can too is sholders allow)
Without Cause; ONLY by sholders and ONLY if allowed in certificate or bylaws (TRICK: If silent then cannot remove w.out cause) |
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Directors: Vacancy
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Board fills vacancy for term
Special Rule: Sholders fill is they remove WITHOUT cause |
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Directors: How does board act
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Two ways:
1. Unanamous and written consent 2. Majority vote at meeting: [a] notice for meetings; [b] majority vote; [c] no proxies or voting agreements a. Notice requirement: No notice for regular meeting but NOTICE REQUIRED FOR SPECIAL MEETING (w time and place but not purpose) -- -- contrast w shareholders (I think) where you always need notice -- no requirements on how much be given --failure - action void UNLESS director waives (a) in written document or (b) shows up b. Majority vote. --CANNOT decrease. --CAN increase (ONLY in certificate, not in bylaws) --Cannot act in any other way (eg. individual convos, they'd have to be ratified) c. No proxies or voting agreements (different than sholders) (want each directors's independant judgment) |
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Directors: Quorum
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1. Rule: Majority of all avaiable seats (doesn't matter if vacant, still count the seat).
2. Broken Quorum: If someone leaves so less than majority, board cannot act (differs from sholders) 3. Can decrease requirement by (a) certif or (b) bylaws but NEVER LOWER THAN 1/3 5. Can increase requirement ONLY BY certif (not bylaws) (same with increasing majority vote, only in certif) Missing Members example: 9 seats, 2 vacant so 7 directors. Still need 5 (count seats not directors). If 5 shows and then 1 leaves - broken quorum. To get something passed, need 3 (majority) |
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Director: Board's Responsibilies and Delegation
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Generally, to manage corp
Can delegate if certif or bylaws allow with exeptions Delegation exceptions: -- Committee cannot set director compensation --Committee cannot fill a board vacancy -- Committee cannot submit a fundamental change to sholdhers -- Committee cannot amend bylaws Trick: Committee often used for shareholder derivative suits |
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Directors: Duty of care (HUGE)
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Test: (1) Violate standard; (2) Causation; (3) Not BJR
1. Standard: A director must discharge her duties "in good faith" with "the degree, care, and skill" that an "ordinary, prudent person" would excercise in similar circumstances (must be deliberate and do homework). 2. Rule: Must should CAUSATION OF INJURY --Nonfeasance Trick: Director who does nothing breached duty BUT ONLY LIABLE if nonfeasance hurt corp., which is tough to prove. 3. BJR: No malfeasance if director meets BJR. -- Protected if business issue if (a) in good faith, (b) in a reasonable, informed basis, (c) with a rational basis. |
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Directors: Duty of Loyalty Test(HUGE)
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Test: (1) Standard, (2) No BJR
1. Standard: A director must (a) act in good faith, with (b) conscientousness, fairness, morality, and honesty |
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Directors: Duty of Loyalty: Types of transactions (list)
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3 Types of Self-Interested Deals:
1. Interested-Director Transaction 2. Competing Ventures 3. Corporate opperunity |
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Directors: Duty of Loyalty: Interested-Director transaction (HUGE)
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1. Interested-Director transaction. Deal btw corp. and one of its directors (or business of which director is in charge)
2. Director can save himself if he shows either: (a) deal was fair/reasonable to corp WHEN APPROVED or... (b) both the material facts and her interests were known and the deal was approved by: (i) shareholder action, (ii) board approval by sufficient vote NOT COUNTING votes of interested directors; (iii) unanamous vote of disinterested directors if disinterested directors are insufficient to take act of board --Quorum Trick: Interested-directors count toward quorum EVEN THOUGH their votes don't count! 3. Exceptions: a. Board sets own salary but must be reasonable or its stealing b. Stock options (side issue): If traded on exchange must follow exchange rules. If not traded on exchange, must be approved by shareholders |
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Directors: Duty of Loyalty: Competing Venture
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1/ Competing Venture (open competing business): Director cannot compete with her corporation.
2. Consequences: Business gets "constructive trust" -- must account (repay) all profits |
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Directors: Duty of Loyalty: Corporate Opperunity
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Rule: Director cannot take a corporate activity until shes (a) tells the board and (b) gives it an opperunity to reject it.
Consequence: Constructive trust; must account for all profits. |
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Director: Other Director Duties
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1. Loan of corporate funds: Only if board finds that it benefits corporation (eg loan to director to take business class is ok)
2. Improper distributions: Directors liable (but can say I has good faith reliance on what financial people told me) |
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Director: Liability Rules
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1. Presumption: Presume director concurred with board action UNLESS dissent noted IN WRITING
-- How to get into writing: (1) in the minutes, (2) in writing to the corporation secretary at the meeting, (3) registerd letter to the secretary promptly after adjournment B. Missed meeting application: If missed meeting, MUST register written dissent within a reasonable time after learning of the action in the minutes C. Defense: Good faith reliance on information, opinions, reports by (1) officers/employees of corp who directors believe are competent, (2) lawyers or public accountants he believes in good faith, (3) committee of which director is not a member on which he relies in good faith, as to matters within their scope of authority. (comes up a lot with improper distributions) |
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Officers: Duties and authority
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Rule: Board monitors directors
Duties: Care and Loyalty Authority: Authority as agents that can bind the corporation within the scope of their authority. -- Can enter Ks and sue on behalf of corp. |
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Officers: Selection and Removal
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Board selects and removes officers WITH or WITHOUT CAUSE
Excepetion: unless certif. allowes sholders to do it -- If Shodlers select then board cannot remove (can only suspend duties) Exception: The AG or holders of 10% of voted of all OUTSTANDING shares may sue for judgment removing an officer FOR CAUSE. Tricks; Bar tries to sell sholder select/removal bc they select directors; ingnores hierarchy. Board manages officers, Sholders manage board. Trick: Removal of an officer without cause is without prejudice to his contract rights, if any |
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Officers: Compensation
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Board determines compensation
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Officer and Directors: Indemnification
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Rules:
Immutable Rule (BIG): Certificate can eliminate liability to corp EXCEPT for (a) bad faith, (b) intentional misconduct, (c) receipt of improper financial benefit; (d) approval of unlawful distribution 2. Default Rules: a. Prohibited: If she was held liable to corporation (but court can order corp. to pay legal fees if finds it reasonable) b. Of Right: Must be reimbursed (fees) if D/O wins (on merits or otherwise) c. Permissive: If neither liable nor exonerated (settles) AND she shows that (a) she acted in good faith and (b) for a purpose she reasonable believed to be in the corps best interest. d. Permissive also the rule for action other than those brought by or in the right of the corp. e. Criminal cases: Can be reimbursed if officer had no reasonble cause to believe his conduct was unlawful |
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Shareholders: Shareholder Mgmt - Requirements
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When: Only in closed corp
Requirements: 1. Provision in certif restricting or transferring board power to shareholders 2. ALL incorporators or sholders approve it 3. It is conspicuously noted on the front/back of ALL shares 4. Shareholder not listed on acy exchange or traded OTC |
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Shareholders: Shareholder Mgmt -
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Duties:
1. Care 2. Loyalth 3. Minority sholders (trend): Controlling sholders cannot use their power for personal gain at the expense of minority sholders or the corporation to OPPRESS minority sholders or the corp. (basically good faith to minorities) -- Oppression: Defeats reasonable expectations of a sholder buying stock. |
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Shareholders: Shareholder Mgmt - Professional Services Corporations (PCs)
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Rule: Members of professional services cannot practice through a general corp but they can form a PC or PSC
Requirements: 1. Sholders must be licenses AND officers/directors too 2. Liable for own malpractice but NOT others (unlike pships) 3. Not personally liable for Ks entered by PC (eg. rent) 4. Governed by general corp rules but MUST SAY PC IN CERTIF. and certif. include 5. If shareholder dies, PC must buy back his shares. |
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Shareholders: Liability
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Generally; No bc corp is liable
Exceptions: 1 . 10 largest shareholders personally liable for wages/benefits of the corp (little trick) 2. Piercing corp. veil (pcv): Test - a. closed corp - b. corp abused by sholders - c. fairness requires pcv to "prevent fraud or to achieve equity" Tricks 1. No pcv if corp has any mind, will, or existence of its own (must be so dominated as to not have this stuff) 2. Undercapitalization alone if not enough (but can work in concert to create violation) (find this more in tort than K bc in K company uses knows capitalization) Classic Fact Patters: 1. Alter ago: One owner in closed corp uses corp for personal expenses. Creditor wants to pierce and sue own. Yes pcv bc abused corp form (used corp for personal stuff) and (b) would be unfair for creditor to be blocked by corp form. --Trick: Remember corp can own another corp (might pcv subsidiery to get to parent corp) 2. Undercapitization WHEN FORMED: company doing dangerous stuff does not buy insurance and minimal capital. Tort victim wants to pcv bc abused corp form from outset to do dangerous shit and limit liability |
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Shareholders: Shareholder Derivative Suits - Requirements
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1. Must be suit corporation could have brought on its own
2. Must be shareholder WHEN CLAIM AROSE or must have goten it from operation of law (inherientence/divorce) when claim arose 3. Must own stock when claim brought and through the end 4. Sholder must adequately represent the interest of corp/sholders 5. Must either (a) "make demand" on board OR prove "demand futility" 5a. Futility Test: (i) **Majority of board interested or under control of interested members (most common bc current directors are Ds) (ii) Board did not inform itself of the transaction to extent reasonable under circumstances (iii) Transaction is so egregious on face that it woud not be result of sound BJ 5b. Demand and Fails: Standard changes --> must show (a) majority of board is interested or (b) px was incomplete/inadequate 5c. Special pleading standardL P must plead w particularity her efforts to get board to sue or why demand futile |
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Shareholders: Shareholder Derivative Suits - Shareholder risk
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If wins: Shareholder gets cost/atty fees from the judgment but Corp gets the money (on its behalf)
If loses: S does not get fees but has to pay D for his Res judicata: Another shareholder cannot bring on same transaction |
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Shareholders: Shareholder Derivative Suits - Corp Defense
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Corp can move for MTD if a majority of independant directors or a special litigation commitee decides its not in the best interest to bring suit. That's a BJ
Court will look for a. Independance of those making invesigation b. Sufficiency of investigation |
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Shareholders: Shareholder Derivative Suits - settlement
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Rule: Approved by court, which may require notice to investors
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Directors and Officers: D&O Derivative Suits
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D&O can bring suits on behalf of corp with no special showings but all money goes back to corp
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Shareholders: Voting - Who Votes
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Rule: Record owners AS OF RECORD DATE.
Record date: Can be set no fewer than 10 and no more than 60 days before meeting. --If no date set then its close of business of day next preceding the notice date Exception: Corp does not vote treasury stock. Trick: Certain others can bote: receivers, if auth by ct, fiduciaries, and trustees (if transferred into his name) |
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Shareholders: Voting - Proxies
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Proxy: Fine (unlike for directors)
a. Requirements: (1) Writing (fax/email count), (2) signed by record sholder or agent, (3) directed to sec of corp, (4) authorizing another to vote shares b. Timing: Good for 11 months unless says otherwise c. Revocation: Can be revoked EVEN IF says irrevocable -Exception: irrevocable if says so and part of voting agreement --Exception: irrevocable if person is (i) pledgee (agrees to buy stock after record date but before meeting; (ii) creditor oof corp; (iii) officer whose employment K calls for it; (iv) person desig by voting agreement (see above) |
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Shareholders: Voting - Voting Trusts and Agreements
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1. Voting Agreement (pooling)
Rule: Must be (a) in writing and (b) signed Enforced through exchange of proxy (or given to 3d party: Irrevoable proxy is irrevocable if part of voting agreement Otherwise Toothless: Catch: bc prolly not enforcible (cannot force specific performance) Trick: 2 sholders cannot make voting agreement when they become directors 2. Voting Trust (like a real trust) --Four Requirements -- -- a. writtest trust agreement, controlling how shares will be voted -- -- b. copy to corp -- -- c. tranfer of legal title of shares to voting trustee -- -- d. original sholders receive voting trust certifs. and rerain all sholder rights except voting Time Limit: 10 yr max (unless within 6 months of expiration, irts extended for another 10 yrs) |
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Shareholders: Voting - Where Vote and Notice
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1. Where: Like directors, either by unanamous written consent or majority vote at a meeting
Trick: certifcate can lower to less than 100% (funny bc can't lower majority vote at meeting) 2. Notice - Must be given: Unlike directors must be given written notice of EVERY meeting (even annual meeting) BTW 10-60 days before meeting 3. Notice: Substance. Unlike directors, in addition to time/place, must notify if (a) if action implicates sholder appraisal rts OR (b) PURPOSE of SPECIAL MEETING (and then meeting is limited to only that purpose) --Trick: Special meeting for something sholders don't do (eg special meeting to remove director --> not cool bc sholders don't remove directors) 4. Defective Notice: Action void unless defective notice is waived - can be implied if attends or express (in writing) |
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Shareholders: Voting - Quorum and counting votes
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1. Quorum
a. Majority of SHARES OUTSTANDING (not authorized (??) shares) b. Breaching Quorum; DO NOT LOSE if people leave (unlike directors) c. Lower: Can lowed by certif or byaws but NEVER lower than 1/3 (like directors) d. raise: Can raise quorum in certificate but NOT bylaws (like directors) 2. Voting: a. Majority wins (of those who vote, after quorum is met) b. Exception: Directors by plurality c. CANNOT REDUCE majority vote requirement (like directors) d. Can increase in certificate e. Cumulative voting: Used when sholders are electing directors - Must be in CERTIFICATE --math problem: multiply number of shares by number of positions f. If any class or series entitled to elect directos, removal can be effected only by them |
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Shareholders: Transfer Stock
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Consideration: Don't care what par is when looking to cn
Restrictions: 1. Set in (a) certif; (b) bylaws, (c) by agreement 2. Restrictions upheld if reasonable (not undue restraint on alientation) -- eg. must always offer first to corp is reasonable (first refusal) -- eg. Must get corp approval NOT reasonable bc would allow corp to refuse for no reason If restrcictions violated: Cannot go after buyer UNLESS either (a) restriction is conspicuously noted on stock certif or (b) buyer had actual knowledge of limiation |
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Shareholders: Right to inspect books - types of inspections
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1. minutes of sholder proceedings and record of sholders
2. List of current D&O 3. Corp balance sheets, P&L statements, and interim financials distributed to sholders and the public 4. CL right to inspect |
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Shareholders: Right to inspect books - minutes of sholder proceedings and record of sholders
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Rule 5 days written demand
- Need no explanation - Corp CAN ask for affidavit that purpose is in the interest of the corp and you have not, within last 5 yrs, tied to sell a list of sholders. Failure to provide aff. permits refusal by corp - Inspection to solicit tenders or faciliate proxy is ok. Inspection to determine misuse of sholders' assets/funds is impropery and derivative action is the remedy |
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minutes of sholder proceedings and record of sholders - List of D&O
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Rule: 2 Days
Corp cannot ask for affidavit |
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Shareholders: Right of Inspection - financials
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Any shareholder has right to see balance sheet, P&L statement, and interm statements made public.
Company can mail to sholder. |
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Shareholders: Right of Inspection - CL
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There is also a CL right to inspect corp books/records at a proper place and reasonable time and for a reasonable purpose
(may be broader - who knows- but BRING IT UP |
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Shareholders: Distributions - Types and who decides
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1. Three Types:
(1) Dividend (2) Repurchase shares (3) Redemption (forced sale back at price set in certif) 2. Set at Board's discretion (BJ). a. No sholder right (but once given to class, gotta be fair b. Court will only 2d guess if bad faith or dishonest purpose Trick: Stock split is NOT a distribution |
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Shareholders: Distributions - Dividends
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Four types of stock:
1. Common 2. Preferred (get paid first) 3. Preferred Participating (get paid twice) 4. Preferred Cumulative (get paid with everyone and again for every yr not paid) Examples: 1. 400K dividend into 100K common stock: $4/share 2. 400K into 100K common and 20K Preferred with $2 dividend preference. 40K for Preferred gets paid first so 360K left into 100K common means $3.60 common. (Note: Doesn't matter that common gets more, so long as Preferred gets first) 3. 100K common and 20K Preferred Participating with $2 dividend preference. 400K minus 40K leaved 360K split over 120K (Participating gets paid twice). so $3/share after Partipcating got his $2/share 4. No divided paid for 3 yrs 100K common and 20K Preferred Cumulative with $2 dividend preference. 400 K minus 40K for 3 yrs (gets paid for each yr not paid). leaved with 280 K over 120 K is 2.6/share + preference pay out |
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Shareholders: Distributions - Funds that can be used
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1. Surplus ALWAYS ok. Its assets minus liabilities minus stated capital.
2. Stated capital cannot be used for distributions. (remember its par times shares) 3. If no par then no stated capital and board can within 60 days put some of the cash to surplus (but not 100%) 4. Can make distributions when corp loses money BUT NOT if it would make corp insolvent or unable to pay debts |
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Shareholders: Distributions - Unlawful Distributions
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If directors order unlawful distribution they can be held liable by corp (so can be deriv suit)
But can always say we releid in good faith on the information given to us by the financial people. And note: Sholder can be liable if he knew unlawful WHEN HE RECEIVED IT |
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Shareholders: Distributions - Redemptions
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Redemptions: Set in certificate and must be done proportional to classes of stock
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Shareholders: Distributions - Repurchases
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Individually negotiated - and corp CAN discriminate (unlike redemptions).
Exception: In closed corp might have to give chance to everyone |
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Fundamental Corp Changes: Appraisal Right
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1. Right in closed corporation to force corporation to buy your stock at fair value
2. Requirements: A. BEFORE sholder vote, must file WRITTEN objection and INTENT to demand appraisal B. Abstain or vote against change C. After vote, make WRITTEN DEMAND to be bought out 2. Actions that trigger: A. Merger B. Dissolution C. Some amendments to certificate D. Consolidation (for company selling assets, not buying) 4. If cannot agree on FMV the CORP brings suit in count --not: court cannot discount value of minority share value |
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Fundamental Corp Changes: Merger
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Rule: Requires Board and Shareholder approval
Effect: Surviving corp succeeds to al rights/liaility of dissapearing corp. Appraisal: Dissenting shareholder of dissapearing corp can get it but not of acquiring corp. |
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Fundamental Corp Changes: Dissolution
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Type Types: (1) Voluntary, and (2) Involuntary.
(1): Voluntary - No board action needed, shareholder action is fine. Certificate of dissolution given the Dept/State 2. Involuntary (by court order) a. How: Don't need board. Can be brought by (i) AG (for improper formation, fraud, abuse/powers) (ii) majority of sholders of all outstanding shares if insufficient assets to cover liabilities or best for shareholders (iii) 20% of voting shares if D&O guilty of illegal, fraudalent, oppressive actions or looted, wasted, or diverted funds. (Note: they could also sue instead) (iv) Any shareholder if cannot elect directors for 2 annual meetings bc of dissention b. Corp Defense: Buy Petitioner's stock at fmv ON TERMS APPROVED BY COURT (court has discretion). 3.What's Next: Still need to wind up corporation. (a) gather all assets (including outstanding legal rts re lawsuits); (b) convert to cash; (c) pay creditors; (4) distribute remainder to shareholders PRO RATA unless dissolution preferrence. Trick: Sholders can't say pay use before creditors, obviously |
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Fundamental Corp Changes: Amendments to Certificate
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Rule: Must be approved by (a) majority of directors and (b) majority of shareholders ENTITLED TO VOTE (much higher bar than majority who show up)
Like what?? Rando rules: A. If amendment will change or strick a supermajority voting for sholders and directors voting - need (a) director + 2/3 of shares entitled to vote. B. Restrittions on directors' mgmt authority must be authorized by ALL sholders (voting and non) or incorporators C. Amendment adverersely affecting any class or series requires majority of votes of outstanding shares of the affect class, whether voting or not. |
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Fundamental Corp Changes: Consolidation
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Concept: Transfer of substantially all assets
Rule; No successor liability (unlike merger) bc other corp still in business. (exception if acquiring corp is basically the same company) Appraisal: For selling company only, not buying company Note: Do not need to file with dept/state |
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Controlling Shareholder: Duty
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Rule: Traditionally not duty between shareholders
Trend: Especially in closed corporations, if in (a) control position - director or (b) owns so much to have working control over corp then owes fiduciary duty to minority sholders. Examples: Ok: Sell shares for "control premium" Not ok: a. Controller sold to looters without making reasonable investigation (eg undisclosed buyer) b. Controlling shareholder status acquired just to loot company c. Controlling shareholder sells a position on the board. |
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Search and Seizure: Exception to Warrant Requirement - Automobile
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Elements: If PC that contraband or evidence in car, then cops may seach ENTIRE vehicle including any containers and packages that could hold weapon on contraband.
Trick: Gets you in trunk where search incident/arrest doesn't get you Trick: Still cannot search containers too small to hold for for which there is PC Traffic stops: Don't need PC to stop, just to search |
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Search and Seizure: Exception to Warrant Requirement - Plain View
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Requirements
1. Lawfully on premises 2. Lawful access to item 3. Immediately apparent criminal Trick. No containers NY = Plain view seizure of obscene material requires prior judicial authorization. |
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Search and Seizure: Exception to Warrant Requirement - Inventory Search
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Rule: Regulations governing such searches must be reasonable and search must comply with regs
2 contexts: 1. When arrestee booked into jail 2. When vehicle impounded |
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Search and Seizure: Exception to Warrant Requirement - Special Needs
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Rule: No PC or Warrant required if special need beyond genera; law enforcement
Examples: 1. Random Drug Test = RR agents against impact accident, public school children who participate in any extracurricular activities, custom agents responsible for drug interdiction. -- Exception: Cannot be used where primary purpose is to gather evidence for law enforcement. 2. Gov. Employee = Desks and files to investigate work related misconduct. 3. School Children = Child and effects (backpacks ect) to investigate school violations. Requires moderate chance of finding evidence + reasonable means given the ends + not excessively intrusive. -- eg. justified to enforce no smoking policy 4. Boarders = Routine searches of persons and effects (even citizens) (includes airplanes). 5. Business = If highly regulated industry. 6. Parolee = Search parolee and his home. 7. International = No 4A rights in foreign countries (for aliens) or at boarder. -- Exception: Reasonable Suspicion required to detain traveler, open int’l mail |
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Search and Seizure: Exception to Warrant Requirement - Terry Stop
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Concept: Stop and Frisk
[1] Lawful and [2] Completed, [3] Stop and [4] Frisk [1] Lawful: Must have "reasonable suspicion" that criminal activity is present (less than PC). Requires SPECIFIC and ARTICULABLE facts, and [2] Completed: Stop only occurs if suspect submits by stopping or cop restains. --NY: pursuit is a stop (eg. criminal running from cop, hits 3d pty and drops drugs --> no stop on MBE but yes stop in NY) [3] Stop: When reasonable person would not feel free to leave or decline request to answer questions. -- a. Factors: Tone, Brandish Weapon, Was individual told she could refuse consent. -- b. Traffic Stop = Both driver and the passengers are stopped (but dog sniff still ok) [d] Frisk = [1] Quick search + [2] For weapons + [3] Justified by officer safety -- a. MBE = Officer can seize anything they ID as contraband w/o physically manipulating it. -- b. NY = Officer can seize an item only if it feels like a weapon. -- c. Eg. In MBE can take crack pipe but cannot in NY. In neither can you take pouch of cocaine (doesn't feel like weapon) [e] Car Rules -- a. Cars = If officer believes suspect is a danger, he may search passenger compartment limited to areas where a weapon could be found. -- b. Dog Sniffs = Not searches. |
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Search and Seizure: Wiretaps
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Elements:
1] Particularity + [2] PC + [3] Limited Time OR [4] Snitch 1. Particularity = Warrant must state suspects, location to be tapped, conversations to be recorded. 2. PC = Must have PC that a "specific crime" has been or will be committed. 3. Time Limit = Specified limited time, and tap must stop when desired info has been obtained. OR 4. Snitch = Only one person need consent, including snitch or undercover cop. -- Like in Wall Street conversation can be taped by other participants. |
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Search and Seizure: Exclusionary Rule - Rule and Exceptions
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Rule; Evidence obtained in violation of 4A inadmissible against indiv. whose rights are violated
Exceptions: [A] Trial, [B] Fruits of Poisonous Tree, [C] Exceptions A. TRIAL = Only applies to prosecutor’s case-in-chief at trial -- Trick: Does not apply to grand juries (except wiretap), parole hearings, civil proceedings, etc. -- Trick: Can use to impeach = 4A and Miranda violative evidence can be used to impeach (not 6A or Due Process). B. FRUITS = Suppression applies to all fruit evidence (especially 6A and Due Process) -- EXCEPTIONS -- -- a. 4A Independent Source = Source for evidence distinct and independent of original illegal search. -- -- b. 4A Inevitable Discovery = Evidence would necessarily have been discovered lawfully (popo were there but then guy illegally confessed and he and that cop beat em there by like 10 mins) -- -- c. 4A Attenuation = Def. free will has been restored through [a] time + [b] intervening events (illegally arrested F, released S, meets atty M, confesses T) -- -- d. Miranda = Physical fruits from Miranda violation are not suppressed (??) C. EXCEPTIONS: [1] Reasonable Mistake, [2] Knock & Announce, [3] Harmless -- 1. Mistake = No suppression if cop made reasonable mistake, or relied on a defective warrant in good faith. -- 2. Knock/announce - failure to comply does not require suppression -- 3. Harmless Error = For guilty verdict to stand, gov. must prove beyond a reasonable doubt that error was harmless a. Standard = Def. would have been convicted w/o illegal evidence. |
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Search/Seizure: Arrest
(1) What is it (2) When is warrant required? |
A. WHAT IS ARREST =
[1] Custody + [2] Involuntary + [3] Prosecution or Interrogation [4] Need Probable Cause -- a. Trick: Arrest can be made for ALL crimes, even those only punishable by fine. -- b. Trick: Road Block = Not arrest or stop (no individ suspicion) if: -- -- [a] Neutral articulable standard + [b] Designed to purpose closely related to automobiles. -- c. Detention = Police may detain suspect while they get warrant for reasonable time to prevent him from destroying evidence. B. WARRANTS: Arrest in [1] Public = No warrant needed. [2] Home = Arrest Warrant or emergency (may detain all people on premises during search). [3] 3P Home = Arrest Warrant AND Search Warrant! [4] Car = May arrest all passengers based on inference of shared dominion. (common enterprise) |
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Confessions: 14A
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Rule: Police coercion that overbears the will impermissible
-- Trick: No popo coersion no 14A problem. (Eg. guy confesses bc he is insane, no 14A problem, not about popo coercing) -- Police Coercion Only - not spiritual or family coercion. -- Exclusion = Suppress all confessions and fruits (INCLUDING subsequent post-Miranda waiver). |
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Confessions: 6A Right to Counsel
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1. Attaches when FORMALLY CHARGED, not upon arrest
2. Right is OFFENSE SPECIFIC (eg. doesn't cocver uncharged activity) 3. Once charged, No Custody Req. = 6A applies even to undercover cops and non-custody situations (eg. undercover cop or snitch in jail) -- can interrogate D without counsel for uncharged activity |
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Confessions: NY Right to Counsel
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Greater than 6A Protection = [1] Sig. Judic. Activity +
[2] Benefit from Counsel + [3] All Matters + [4] Waiver 1. Significant Judicial Activity = Prior to filing indictment (eg. issuance of warrant) 2. Benefit = Triggered when def. may benefit from counsel (eg if cops know he has counsel, gotta bring him in) 3. All Matters = Right to counsel attaches to both the specific charge and all other matters. 4. Waiver = Must be in presence of attorney. |
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Confessions: Miranda - Options/Rights
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3 Options:
1. Remain Silent 2. Waiver 3. Request Attorney |
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Confessions: Miranda - When Attaches
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Attaches at Custodial Interrogation (unlike 6A, which attaches when D is formally charged)
[1] Custodial: [a] Objective Test + [b] Police Atmosphere + [c] Limited Freedom -- b. Objective Test = From perspective of suspect. -- a. Atmosphere = Characterized by police domination and coercion. -- -- i. Does not apply to undercover cops since there is no custody. -- -- ii. Location is not determinative (e.g. bedroom v. inmate in prison). c. Limited Freedom = Freedom of action limited in a “significant way.” [2] Interrogation: Conduct POLICE should know is LIKELY TO ELICIT an incriminating response. -- HUGE: Police = Interrogation must be by police for Miranda to apply --- EXCEPTION: Spontaneous statements = Miranda does not apply to spontaneous confessions. -- BIg Gap: Undercover inmate asks D about crime unrelated to what he is charged with. No 5A bc not cops. No 6A bc unrelated |
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Confessions: Miranda - Waiver
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Test: Must be:
[a] Knowing & Intelligent [b] Voluntary + Note: Burden of Proof on prosecution by PERPONDERANCE of the evidence A. K&I = Must understand [i] general nature of rights + [ii] consequences of waiving them. -- BUT Police not required to tell suspect that her lawyer wants to see her (doesn't affect knowingness) B. Voluntary = Not the product of police coercion. -- NY Specific Rule = Police may not use deception/concealment to keep parent from interrogated child. d. Burden = Prosecution must prove by preponderance (silence is not sufficient). |
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Confessions: Miranda - Right to Remain Silent
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Rule = Police must "scrupulously honor:
-- No badgering -- Reinitiation: Must wait a significant period of time before reinitiating questions, and must obtain a valid Miranda waiver. |
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Confessions: Miranda - Right to Counsel
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If right to counsel invoked = All interrogation must cease unless initiated by suspect (all issues)
A. All Matters = Invocation of right applies to all topics (not just charged offenses). B. Clarity = Invocation must be clear to reasonable officer. C. Expiration = Invocation expires only after 14d after release from custody. |
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Miranda: Cure
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Cure = Confessions after Miranda waiver are not excluded even if there were prior confessions made before the waiver that are excluded.
Other rules apply: - Cannot be used in case/chief but can be used on cross - No fruits (??) - Harmeless Error |
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Pre-Trial Issues: Identification
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Three Issues: [1] Right to Counsel, [2] Due Process, [3] Remedy
1. Right to Counsel = No 5A right, but 6A right AFTER CHARGES for line-up & show-ups. -- a. No right for photo-arrays or physical evidence gathering (blood, handwriting). -- b. NY = Line-ups prior to charges if [a] police aware you have counsel + [b] you request it. 2. DP Violation = Procedure “so unnecessarily suggestive” + “substantial likelihood of Mis-ID.” 3. Remedy = Exclusion of witness in-court identification. -- a. Exception = If prosecution can prove in-court ID is based on observations unrelated to illegal show-up/photo array. -- -- Factors = [a] Witness Opportunity to View Suspect at Crime Scene + [b] Certainty of Witness ID + [c] Specificity of Description Given to Police |
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Pre-Trial Issues: Grand Jury
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Issues = [1] Purpose, [2] Reqs., [3] Secrecy, [4] Witness Rights,
1. Purposes = [a] Issue Indictments, [b] Check on prosecution, [c] Investigatory tool. 2. Required Use: [a] Federal must use, [b] States do not (most don’t), NY does use grand jury. 3. Secrecy: Proceedings are secret, only witness may disclose his own testimony. 4. Suspect Rights = No right to [a] Counsel, [b] Miranda, [c] Exculpatory evidence to GJ. -- -- NY Indictment: Must establish all elements of offense + provide reasonable cause to believe that accused committed crime in question. |
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Pre-Trial Issues: Detention
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PRE-TRIAL DETENTION: [1] Proof, [2] Pre-Hearing, [3] Post-Hearing
1. Standard of Proof = Probable Cause to detain def. before trial. 2. Pre-Detention Hearing = Not needed if [a] Grand Jury has issued indictment or [b] magistrate has issued an arrest warrant. 3. First Appearance: [a] Soon After Arrest (within 48 hours) + [b] Neutral Magistrate + [c] Advise of Rights + Set Bail (immediately appealable) + Appoint Counsel. |
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Pre-Trial Issues: Guilty Pleas
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Test: Must be
[1] Voluntary + [2] Intelligent + and if so then (can or cannot ???) [3] Collateral Attack 1. Voluntary = Not coerced 2. Intelligent = In open court, Judge must address [a] Nature of charges, [b] Possible sentences (max, min, mandatory), [c] Effect of waiver of trial, [d] Right to not plead guilty 3. Collateral attack (good or not??) [1] Ineffective assistance of counsel, [2] no jurisdiction, or [3] prosecutor fails to fulfill his part of the bargain (contract principal). |
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Compelled Testimony: Taking the 5th
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Right to not Self -incriminate: Must be
[1] Compelled + [2] Testimonial and have the [3] Who Where What and EVEN THEN it can be [4]elimited 1. Compelled = Taking the stand waives 5A for anything properly within scope of cross-x 2. Testimonial = Applies to statements only (not blood, voice, etc.). -- But no negative comments on def.’s decision not to testify (but prosecutor or judge). -- b. Document Production = Not testimonial unless act of production shows existence, possession, or authentication 3. Who, Where When -- Who: Anyone -- Where: Anywhere your under oath (ie city counsel) -- When: First opportunity or waive) -- -- BIG EG: Something amiss in home town, town council asks for sworn testimony, then later you’re charged, you cannot plea the 5th bc you already testified… -- -- Exception: NY = No privilege in grand jury. [4] Eliminated through [a] Pros. offering “use and derivative use” immunity (cannot use your testimony or anything derived from it against you) OR [b] SoL. -- NY = Uses broader transactional immunity (shield witnesses from any prosecution arising for any T they testified about. Broader than MBE. -- MBE v. NY: If testify about x and then cops independently find video footage of D doing x, under MBE can use video bc not “derived” from testimony, but under NY cannot bc part of the same “transaction” about which you testified |
