November 02, 2017
Bankruptcy & Insolvency Alerts

Cooper Lawyer Assists in Legislative Fix to Eliminate "Zombie" Corporations

Working with the Insolvency Law Committee and the Corporations Committee of the Business Law Section of the State Bar of California, Peter Califano of Cooper, White & Cooper LLP assisted in creating an Affirmative Law Proposal to amend Corporations Code Section 1401 to allow Liquidating Trustees in Chapter 11 bankruptcy cases to sign and file a Certificate of Dissolution in California.  There was a gap in current law where at the conclusion of the liquidating bankruptcy case, none of the case representatives were empowered to sign the Certificate, so the non-functioning entity continued to exist as a “zombie” corporation.  With the addition of Corp. Code Section 1401.5 these corporations can now be properly dissolved.  Senator Hertzberg sponsored the proposal as SB 340 and was recently signed into law by Governor Brown.  Read more about the new law at https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180SB340

Peter Califano is an advisor to the Business Law Section of the State Bar of California, working on legislative matters.  He is also currently leading the Legislation Translation Planning Committee for Section Legislative Policy for the new California lawyer association, set to begin operations on January 1, 2018.
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