In the recent decision in the matter of Cheng v. Coastal L.B. Assocs., LLC, Case No. B303519, 2021 WL 4305054 (Sept. 1, 2021), the Court of Appeal for the Second District upheld the trial court’s “order confirming [the] appraisers’ award valuing the parties’ respective 25 percent interests in the LLC at a discounted fair market value.” In the foregoing matter, “Appellant filed an action for involuntary dissolution of the LLC in October 2017. Respondents moved for an order staying the dissolution action and electing to purchase appellant’s [] interests in the LLC pursuant to section 17707.03” which permits the remaining LLC members to purchase the selling interests at fair market value (“FMV”). 

Over the course of the past year and a half, individuals and businesses in California have been forced to adapt to a new way of life brought on by the coronavirus pandemic.  In response, state and local governments have adopted various legislation to accommodate these changes as well as measures to address financial hardships suffered as a result of the pandemic.  One crucial legislative focus has been on the inability of tenants to pay rent, including office, retail, industrial and other commercial tenants.

Earlier this week, the Civil Litigation Section of the San Diego County Bar Association hosted its summer social.  Attorney Sean Ponist of the Ponist Law Group is the Chair of the Civil Litigation Section.  It was the first in-person event for the Section since the start of the pandemic and the first time that the Section’s Board of Directors met in person since the start of the pandemic.  Pictured above are Board Members Aaron Sibley, Sean Ponist (Chair), Ray Ayers and Michael Hirman (left to right). 

In the recent decision of Shaper v. Zadek, Case No. 21-cv-00493-EMC, 2021 WL 3885958 (N.D. Cal. Aug., 31, 2021), the court addressed whether loans purchased by investors were “securities” under federal securities laws and, if so, whether the seller of the notes had violated federal securities laws by failing to, among other things, register as an investment adviser and/or broker-dealer.  The answer is lawyerly and, perhaps, unsatisfactory, i.e., it depends!  Where the notes were purchased for investment purposes, offered and sold to a broad segment of the population, reasonable investors would view them as securities and not merely notes, and there is no other statutory scheme directly regulating the transaction, they should be treated as “securities.”  Nonetheless, additional considerations will determine whether the party offering the note must register as an investment adviser or broker-dealer under federal securities laws.