Simplifying Section 500 Of Calif. Corporations Code
September 16, 2011, 1:46 PM EDT
Law360, New York (September 16, 2011, 1:46 PM EDT) -- On Sept. 1, 2011, California Gov. Jerry Brown signed Assembly Bill No. 571, which simplifies restrictions on dividends, repurchases and redemptions of shares. The restrictions are set forth in Sections 500 to 509 of the California Corporations Code, and are commonly referred to collectively as "Section 500." These provisions are designed to protect the interests of creditors and senior equity holders against transactions that might undermine their seniority in the capital structure.
Section 500 applies to companies incorporated in California and to companies incorporated elsewhere but...