Is There No Protection For The Innocent When A Corporation T

Is There No Protection For The Innocent When A Corporation Transfers Its All To Secured Creditors? | Allen Matkins


Last Friday, this space addressed itself to Vice Chancellor J. Travis Laster's ruling in  
Stream TV Networks v. SeeCubic, C.A. No. 2020-0310-JTL (Dec. 8, 2020).   He concluded that stockholder approval was not required when an insolvent corporation transfers all of its assets to its secured creditors notwithstanding Section 271 of the Delaware General Corporation Law.  California has a similar statutory scheme and a California court may well agree with the Vice Chancellor.
Purchasers of assets from California corporations, however, will not be able to rely on Section 1002 which provides that a secretary's or assistant secretary's certificate may be affixed to any deed or instrument conveying or otherwise transferring any assets of a corporation.   Under the statute the certificate may set forth that the transaction has been validly approved by the board and:

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