Articles Tagged with “Oakland business attorney”

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Governor Brown signed the new Uniform Voidable Transactions Act into law on July 2, 2015. The bill received unanimous support in both the Senate and the Assembly and was recommended by the Commercial Transactions Committee. This law renames and amends the pre-existing Uniform Fraudulent Transfer Act. This new law will impact both debtors and creditors.

What is the Uniform Voidable Transfer Act?

California’s pre-existing Uniform Fraudulent Transfer Act is based in part on the model Uniform Fraudulent Transfer Act, which has been adopted at least in part by various states including Georgia, Idaho, Kentucky, Minnesota, New Mexico, North Carolina, and North Dakota. It establishes the conditions under which a transfer made or obligation incurred by a debtor is fraudulent as to the creditor. It also sets remedies a creditor can obtain with respect to a fraudulent transfer or obligation. One potential remedy is the voiding of the transfer. This new law renames the law the Uniform Voidable Transaction Act. It also adopts certain changes promulgated by the Uniform Law Commission. It specifies a burden of proof in making and defending a claim for relief under this law. It specifies the basis for determining the governing law for a claim for relief under the act. It modifies definitions applicable to the act. It removes a definition of insolvency and adds new definitions including definitions for “record” and “sign.” It replaces the term “fraudulent” with the term “voidable.” These modifications are only applicable if the right of action accrued, the transfer was made, or the obligation was incurred on or after the effective date of the bill. That date is January 1, 2016.

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A federal judge here in California recently denied a mortgage company’s attempt to dismiss two counts of a class action suit against it. The company, Castle & Cooke Mortgage, argued that the consumers in those two counts had already obtained redress under a consent order the company entered into with the Consumer Financial Protection Bureau (CFPB) back in 2013. The consent order settled the CFPB’s charges that Castle had violated the Regulation Z loan originator compensation rule. The amended complaint in the class action alleged TILA violations, violations of various Utah laws including an unjust enrichment claim, and, with regards to the California subclass, violations of our Unfair Competition Law (UCL).

What the Class Action is About

The main allegation in the underlying lawsuit is that Castle broke the law by implementing a secret bonus program which gave its loan officers incentives to put borrowers in loans with higher interest rates. Castle sought to dismiss the unjust enrichment claims and the California UCL claims. The trial court denied that request. In 2013 the CFPB sued Castle for maintaining this bonus program, and later that year Castle entered into a consent agreement under which it agreed to pay millions of dollars in restitution and penalties. The named plaintiff in this lawsuit received a restitution check as a result of the consent agreement. However, the consent agreement did not limit or affect borrowers’ rights to pursue their own claims against Castle.

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Appeals handled by the Consumer Financial Protection Bureau (CFPB) present issues one should be concerned with whether one works in real estate or business. Back in March of this year CFPB Director Cordray presided over the oral arguments in the first appeal hearing of an administrative action. In the case heard on appeal two companies were alleged to have given and received millions of dollars in payments through a “captive” mortgage reinsurance agreement. The argument was that these payments constituted kickbacks that violated the Real Estate Settlement Procedures Act. The facts of the case itself are not that important for those not involved in the case. Rather, what is important is the way the appeal is handled.

CFPB’s Rules of Practice for Adjudication Proceedings

The rules for these appeals are laid out in the CFPB’s Rules of Practice for Adjudication Proceedings. Specifically the appeals in question are appeals of an administrative law judge’s recommended decision to the CFPB director. A party who wants to appeal a recommendation must go through this process if it wants judicial review even though the recommendation does not become final until after the director approves it. The rules also provide for strict and short timelines in this appeals process. This may seem like a positive aspect as many parties wish the legal process did not typically take so long. However, it is possible that these short turnaround times will ultimately favor the agency over other parties. Other rules also appear to favor the agency fairly heavily. This is mainly because they grant the CFPB director broad discretion in reaching a ruling.

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When forming a business as a corporation, you will have to select corporate directors and officers. You may even be one of these directors or officers. Officers and directors can face personal exposure when the corporation inevitably becomes involved in some sort of dispute. That is why it is extremely important that officers and directors require separate indemnification agreements between themselves and the corporation.

What Exactly is Indemnification?

Indemnification in this situation involves the corporation indemnifying the directors and officers. To indemnify is to guarantee financial reimbursement to an individual in case of a specified loss. Under California law, a corporation has the ability to indemnify its agents, directors, and officers. However, any indemnification of officers or directors for the defense of any proceeding must be done in a way that is consistent with that law in order to be valid. The law allows indemnification against expenses, judgments, fines, settlements and other amounts reasonably incurred in connection with the proceeding if the director or officer acted in good faith and reasonably thought he or she was acting in the best interests of the corporation and, in criminal matters, had no reason to believe the conduct was unlawful.

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California’s tax code includes a provision that makes it so a domestic corporation that fails to pay certain taxes can have its corporate rights suspended. If your corporation’s rights are suspended under this provision, it can affect both the corporation’s ability to bring legal actions and to appeal the outcomes of legal actions.

Causes of Action Filed by Suspended Corporations

When a corporation is suspended there is a straightforward way for it to revive its corporate rights. According to the tax code, the corporation can revive its rights by:

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Two important bills passed recently by the California state legislature will become law on January 1, 2015. The first of these new business laws will affect what up to now has been called the Corporate Flexibility Act of 2011. The second bill standardizes the business entity filing process. If you may be affected by either of these new laws, it is important that you discuss them with an experienced California business law attorney.

Changes to What Was the Corporate Flexibility Act

Governor Brown signed the first of these bills into law on September 27, 2014. The bill is Senate Bill 1301. The first thing the new law does is change the name of the law. It will now be called the “Social Purpose Corporations Act.” It also changes the name of the type of corporation the Act authorizes to “social purpose corporation.” This type of corporation used to be called a “flexible purpose corporation.” A social purpose corporation is a corporation that has a designated purpose in its articles of incorporation.