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Corporate Laws Committee Reports

March 3, 2005

    1. Next Scheduled Meeting of the Committee

    The Committee does not hold regular meetings but rather meets when in the process of considering amendments to the Business Corporation Act. Throughout 2004 and early 2005 the Committee has been considering the next round of amendments. Meetings were held on held on February 17, March 23, and July 29, 2004, and January 13, 2005. A final draft of the amendments has been forwarded for introduction in the state legislature. At the date of this writing, the proposed draft was under review by the Legislative Service Bureau.

    2. Council Approval

    The Committee requests that the Council approve (i) the submission of the proposed amendment for legislative action and (ii) the participation by the Committee in testifying with regard to the amendment, assisting the legislative effort or otherwise advocating adoption of the amendment. There has been submitted for the reference of Council members a copy of the reporter's most recent draft of the changes with reporters' commentary.

    At its meeting on December 4, 2004, the Council approved the amendment except for proposed changes to Section 131. There have been certain additions since then, and a brief summary of the changes is attached.

    Section 131 addresses the effective time of documents filed with the Administrator under the Act. Currently, the Act provides that the filing of a document is effective as of the date it is endorsed by the Administrator. The amendment would make filings effective following endorsement, on the date they are received. This would follow states such as Delaware and avoid problems, particularly at year end, that could be caused by delayed processing of filings.

    At the December 4 meeting Ann Baker expressed the reservations of the Department of Labor &; Economic Growth about the proposed amendments to Section 131. The Department declined to suggest an alternative approach but indicated that it would react once a bill was introduced. After further discussions the committee has determined to re-submit the same language for purposes of introducing the bill, with the intention of working with the Department to refine this approach or to settle on an alternative approach.

    3. Membership

    The Committee remains open to participation by any interested parties. The lack of regular meetings tends to limit interaction with Committee members.

    4. Accomplishments Toward Committee Objectives

    The Committee continues to monitor developments in corporate laws throughout the country and to consider changes to the Business Corporation Act. This is an ongoing and continuous process.

    5. Meetings and Programs

    One of the Committee Co-Chairs participated in the presentation of the business law legislative update at the Section annual meeting on September 23, 2004. No additional programs are currently scheduled, though the Committee is open to participation in presentations discussing changes to the Act once passed.

    6. Publications

    The Committee sponsored an issue of the Michigan Business Law Journal in 2002.

    7. Legislative/Judicial/Administrative Developments

    As mentioned above, introduction of a bill proposing amendments to the Business Corporation Act is imminent. The Committee seeks council approval to take a position in support of the bill and testify if necessary. Professors Mae Kuykendall and Elliot Spoon have assisted the Committee as reporters.

    8. Miscellaneous

    The Committee will continue to accept ideas for technical and other amendments to the Business Corporation Act, which is amended periodically. Suggestions in this regard may be addressed to either of the committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Department of Labor and Economic Growth regarding efforts to further streamline corporate filings and information dissemination.

    Justin G. Klimko

    Summary of Changes to Draft Amendments

    Submitted at December 4, 2004 Council Meeting

    Section 143 (MCL §450.1143)

    Subsection 1 would be amended to exempt corporations with a class of registered securities under the Securities Exchange Act of 1934 from the requirement to use first-class mail for mailings of notices and communications. This change would permit use of bulk mailing, thus lowering the sometimes considerable cost of shareholder mailings to public companies.

    Section 261 (MCL §450.1441)

    Subsection (i) would add limited liability companies to the types of affiliated entities covered by the safe harbor for guaranties.

    Section 489 (MCL §450.1489)

    Subsection 3 would be amended to provide that willfully unfair and oppressive conduct may include the termination of employment or limitations on employment benefits to the extent that the actions interfere with distributions or other shareholder interests disproportionately as to the affected shareholder. This language is intended to overcome the holding of the Court of Appeals in Franchino v. Franchino (Docket No. 244878, July 29, 2004 as corrected September 28, 2004). In that case the court held that termination of employment could not state a claim under Section 489 because it did not relate to a shareholder's interest "as a shareholder." The amendment would allow consideration of employment issues if they disproportionately interfere with shareholder interests.

December 4, 2004

    1. Budget Request for 2004-2005.

    In 2003-2004, the Committee budgeted for one-half of the amount anticipated to be needed for reporters for the current project considering amendments to the Business Corporation Act. For 2004-2005 we anticipate needing the balance and so again request $5,000.

    2. Use of Budgeted Funds in 2003-2004.

    Funds were used to pay the reporters engaged in the legislative amendment process.

    3. Next Scheduled Meeting of the Committee

    The Committee does not hold regular meetings but rather meets when in the process of considering amendments to the Business Corporation Act. The most recent BCA amendment became law in the fall of 2001. Consideration of the next round of amendments has begun, with meetings held on February 17, March 23 and July 29, 2004. Additional meetings will be scheduled. A description of the amendments under consideration was presented as part of the business law legislative update presented at the Section's annual meeting on September 23, 2004. Additional topics have been raised for consideration since then, including (i) possible clarification of Section 261(i) to include guaranties, etc. of obligations of unincorporated affiliates and (ii) possible elimination with respect to public companies of the requirement in Section 336 that issuers send holders of uncertificated shares a written statement of information required on share certificates.

    4. Council Approval

    The Committee requests that the Council approve (i) the submission of the proposed amendment (with additional changes or additions that the Committee determines) for legislative action and (ii) the participation by the Committee in testifying with regard to the amendment, assisting the legislative effort or otherwise advocating adoption of the amendment. There is attached for the reference of Council members a copy of the reporter's most recent draft of the changes with reporters' commentary.

    5. Membership

    The Committee remains open to participation by any interested parties. The lack of regular meetings tends to limit interaction with Committee members.

    6. Accomplishments Toward Committee Objectives

    The Committee continues to monitor developments in corporate laws throughout the country and to consider changes to the Business Corporation Act. This is an ongoing and continuous process.

    7. Meetings and Programs

    One of the Committee Co-Chairs participated in the presentation of the business law legislative update at the Section annual meeting on September 23, 2004.

    8. Publications

    The Committee sponsored an issue of the Michigan Business Law Journal in 2002.

    9. Legislative/Judicial/Administrative Developments

    As mentioned above, the Committee is considering amendments to the Business Corporation Act. Professors Mae Kuykendall and Elliot Spoon are assisting the Committee as reporters.

    10. Miscellaneous

    The Committee will continue to accept ideas for technical and other amendments to the Business Corporation Act, which is amended periodically. Suggestions in this regard may be addressed to either of the committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Department of Labor and Economic Growth regarding efforts to further streamline corporate filings and information dissemination.

    Justin G. Klimko

September 23, 2004

    1. Next Scheduled Meeting of the Committee

    The Committee does not hold regular meetings but rather meets when in the process of considering amendments to the Business Corporation Act. The most recent BCA amendment became law in the fall of 2001. Consideration of the next round of amendments has begun, with meetings held on February 17, March 23 and July 29, 2004. Additional meetings will be scheduled. A description of the amendments under consideration is included in the business law legislative update presented at the Section's annual meeting on September 23, 2004. Since the last meeting of the council, the list of amendments under consideration has expanded to include an amendment clarifying that abstentions and broker non-votes are not considered votes "cast" for purposes of Section 441(2) and consideration of an amendment to Section 489 to alter the impact of the Court of Appeals' holding in Franchino v. Franchino.

    2. Council Approval

    There are no matters requiring Council approval at this time.

    3. Membership

    The Committee remains open to participation by any interested parties. The lack of regular meetings tends to limit interaction with Committee members.

    4. Accomplishments Toward Committee Objectives

    The Committee continues to monitor developments in corporate laws throughout the country and to consider changes to the Business Corporation Act. This is an ongoing and continuous process.

    5. Meetings and Programs

    One of the Committee Co-Chairs participated in the presentation of the business law legislative update at the Section annual meeting on September 23, 2004.

    6. Publications

    The Committee sponsored an issue of the Michigan Business Law Journal in 2002.

    7. Legislative/Judicial/Administrative Developments

    As mentioned above, the Committee has begun the process of considering another round of amendments to the Business Corporation Act. Professors Mae Kuykendall and Elliot Spoon are assisting the Committee as reporters.

    8. Miscellaneous

    The Committee will continue to accept ideas for technical and other amendments to the Business Corporation Act, which is amended periodically. Suggestions in this regard may be addressed to either of the committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Department of Labor and Economic Growth regarding efforts to further streamline corporate filings and information dissemination.

    Justin G. Klimko

May 22, 2004

    1. Next Scheduled Meeting of the Committee

    The Committee does not hold regular meetings but rather tends to meet when in the process of considering amendments to the Business Corporation Act. The most recent BCA amendment became law in the fall of 2001. Consideration of the next round of amendments has begun, with meetings held on February 17 and March 23, 2004. Additional meetings will be scheduled. Among the items under consideration is an amendment that would require board approval of charter amendments. Michigan is in the minority in not requiring such approval. The committee has discussed whether such a change, if proposed, should apply only to publicly held companies or to all corporations. Committee member Aleksandra Miziolek circulated a survey of other state statutes noting which states required board approval of charter amendments (36 states were identified) and whether any of them distinguished publicly held from privately held companies (none were identified). Other possible amendment topics discussed include amendments to effective date provisions to prevent year-end filing problems; possible repeal of the Control Share Act; authorization for board committees to delegate tasks to subcommittees; consideration of entity conversion provisions; and technical issues.

    2. Council Approval

    There are no matters requiring Council approval at this time.

    3. Membership

    The Committee remains open to participation by any interested parties. The lack of regular meetings tends to limit interaction with Committee members.

    4. Accomplishments Toward Committee Objectives

    The Committee continues to monitor developments in corporate laws throughout the country and to consider changes to the Business Corporation Act. This is an ongoing and continuous process.

    5. Meetings and Programs

    Nothing to describe at this time.

    6. Publications

    The Committee sponsored an issue of the Michigan Business Law Journal in 2002.

    7. Legislative/Judicial/Administrative Developments

    As mentioned above, the Committee has begun the process of considering another round of amendments to the Business Corporation Act. Professors Mae Kuykendall and Elliot Spoon have agreed to assist the Committee as reporters.

    8. Miscellaneous

    The Committee will continue to accept ideas for technical and other amendments to the Business Corporation Act, which is amended periodically. Suggestions in this regard may be addressed to either of the committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Department of Labor and Economic Growth regarding efforts to further streamline corporate filings and information dissemination.

    Justin G. Klimko

March 4, 2004

    1. Next Scheduled Meeting of the Committee

    The Committee does not hold regular meetings but rather tends to meet when in the process of considering amendments to the Business Corporation Act. The most recent BCA amendment became law in the fall of 2001. A meeting was held on February 17, 2004 to consider what additional amendments may be advisable for the BCA. Additional meetings will be held for this purpose but have not yet been scheduled.

    2. Council Approval

    There are no matters requiring Council approval at this time.

    3. Membership

    The Committee remains open to participation by any interested parties. The lack of regular meetings tends to limit interaction with Committee members.

    4. Accomplishments Toward Committee Objectives

    The Committee continues to monitor developments in corporate laws throughout the country and to consider changes to the Business Corporation Act. This is an ongoing and continuous process.

    5. Meetings and Programs

    Nothing to describe at this time.

    6. Publications

    The Committee sponsored an issue of the Michigan Business Law Journal in 2002.

    7. Legislative/Judicial/Administrative Developments

    As mentioned above, the Committee has begun the process of considering another round of amendments to the Business Corporation Act. The Committee has met once and placed several items at issue for further consideration. Among these are proposals to address year-end filing backlogs, to revise the amendment process for Articles of Incorporation and to consider possible repeal of the Control Share Act. Professors Mae Kuykendall and Elliot Spoon have agreed to assist the Committee as reporters.

    8. Miscellaneous

    The Committee will continue to accept ideas for technical and other amendments to the Business Corporation Act, which is amended periodically. Suggestions in this regard may be addressed to either of the committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Department of Labor and Economic Growth regarding efforts to further streamline corporate filings and information dissemination.

    Justin G. Klimko

December 6, 2003

    1. Budget Request for 2003-2004

    $5,000

    2. Next Scheduled Meeting of the Committee

    The Committee does not hold regular meetings but rather tends to meet when in the process of considering amendments to the Business Corporation Act. The most recent BCA amendment became law in the fall of 2001. The Committee will soon begin considering the advisability of additional amendments.

    3. Council Approval

    There are no matters requiring Council approval at this time.

    4. Membership

    The Committee remains open to participation by any interested parties. The lack of regular meetings tends to limit interaction with Committee members.

    5. Accomplishments Toward Committee Objectives

    The Committee continues to monitor developments in corporate laws throughout the country and to consider changes to the Business Corporation Act. This is an ongoing and continuous process.

    6. Meetings and Programs

    Nothing to describe at this time.

    7. Publications

    The Committee sponsored an issue of the Michigan Business Law Journal in 2002.

    8. Legislative/Judicial/Administrative Developments

    The Committee continues to evaluate the advisability of amending the Business Corporation Act and Michigan Limited Liability Act so as to permit direct conversions by one type of entity into another. These efforts are being spearheaded by James C. Cambridge, who has overseen LLC Act matters on behalf of the Section.

    PA 181 of 2003 became law on October 7, 2003. The act amended the Michigan Control Share Act, Chapter 7B of the Business Corporation Act, to provide that the formation of a group does not constitute a control share acquisition and to restore the voting rights of any shares previously held not to have voting rights because of the formation of a group. PA 181 reversed the effect of the U.S. District Court's ruling in the matter of Simon Property Group, Inc., et al. v. Taubman Centers Inc., et al., 2003 U.S. Dist. LEXIS 7435 (E.D. Mich. May 1, 2003 as amended May 8, 2003), which had found that the formation of a group had occurred and ruled that all shares held by all group members were disabled from voting under the Control Share Act.

    9. Miscellaneous

    The Committee will continue to accept ideas for technical and other amendments to the Business Corporation Act, which is amended periodically. Suggestions in this regard may be addressed to either of the committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Department of Consumer and Industry Services regarding efforts to further streamline corporate filings and information dissemination.

    Justin G. Klimko

September 11, 2003

    1. Next Scheduled Meeting of the Committee

    The Committee does not hold regular meetings but rather tends to meet when in the process of considering amendments to the Business Corporation Act. The most recent BCA amendment became law in the fall of 2001. The Committee will soon begin considering the advisability of additional amendments.

    2. Council Approval

    There are no matters requiring Council approval at this time.

    3. Membership

    The Committee remains open to participation by any interested parties. The lack of regular meetings tends to limit interaction with Committee members.

    4. Accomplishments Toward Committee Objectives

    The Committee continues to monitor developments in corporate laws throughout the country and to consider changes to the Business Corporation Act. This is an ongoing and continuous process.

    5. Meetings and Programs

    Nothing to describe at this time.

    6. Publications

    The Committee sponsored an issue of the Michigan Business Law Journal in 2002.

    7. Legislative/Judicial/Administrative Developments

    The Committee continues to evaluate the advisability of amending the Business Corporation Act and Michigan Limited Liability Act so as to permit direct conversions by one type of entity into another. These efforts are being spearheaded by James C. Cambridge, who has overseen LLC Act matters on behalf of the Section.

    The Committee continues to monitor developments that may affect Michigan corporate laws. Of particular significance in this regard is the continuing matter between Simon Properties and Taubman Centers, Inc. relating to Simon's tender offer for Taubman's shares. This case has produced judicial opinions regarding application of Chapter 7B of the Michigan Business Corporation Act and standing for derivative actions. Certain rulings are currently on appeal to the Sixth Circuit Court of Appeals. There have also been various legislative initiatives that have proposed amendments to Chapter 7B as well as other portions of the BCA that could have an effect on this matter. None of these have been adopted as of the date of this writing.

    8. Miscellaneous

    The Committee will continue to accept ideas for technical and other amendments to the Business Corporation Act, which is amended periodically. Suggestions in this regard may be addressed to either of the committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Department of Consumer and Industry Services regarding efforts to further streamline corporate filings and information dissemination.

    Justin G. Klimko

May 17, 2003

    1. Next Scheduled Meeting of the Committee

    The Committee does not hold regular meetings but rather tends to meet when in the process of considering amendments to the Business Corporation Act. The most recent BCA amendment became law in the fall of 2001. The Committee will likely try to convene a meeting in 2003.

    2. Council Approval

    There are no matters requiring Council approval at this time.

    3. Membership

    The Committee remains open to participation by any interested parties. The lack of regular meetings tends to limit interaction with Committee members.

    4. Accomplishments Toward Committee Objectives

    The Committee continues to monitor developments in corporate laws throughout the country and to consider changes to the Business Corporation Act. This is an ongoing and continuous process.

    5. Meetings and Programs

    Nothing to describe at this time.

    6. Publications

    The Committee sponsored an issue of the Michigan Business Law Journal in 2002.

    7. Legislative/Judicial/Administrative Developments

    The Committee is cooperating in attempts to amend the Business Corporation Act and Michigan Limited Liability Act so as to permit direct conversions by one type of entity into another. These efforts are being spearheaded by James C. Cambridge, who has overseen LLC Act matters on behalf of the Section.

    The Committee continues to monitor developments that may affect Michigan corporate laws. Of particular significance in this regard is the ongoing matter between Simon Properties and Taubman Centers, Inc. relating to Simon's tender offer for Taubman's shares. This case has produced judicial opinions regarding application of Chapter 7B of the Michigan Business Corporation Act and standing for derivative actions. A proposed amendment to the Business Corporation Act that would have required Board approval for amendments to the Articles of Incorporation and would have allowed continuing directors to exempt acquisitions from Section 7B after they occurred was withdrawn from consideration and sent back to committee after complaints that the bill was intended to influence the Simon/Taubman matter.

    8. Miscellaneous

    The Committee will continue to accept ideas for technical and other amendments to the Business Corporation Act, which is amended periodically. Suggestions in this regard may be addressed to either of the committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Department of Consumer and Industry Services regarding efforts to further streamline corporate filings and information dissemination.

    Justin G. Klimko

March 6, 2003

    1. Next Scheduled Meeting of the Committee

    The Committee does not hold regular meetings but rather tends to meet when in the process of considering amendments to the Business Corporation Act. The most recent BCA amendment became law in the fall of 2001. The Committee will likely try to convene a meeting in the summer of 2003.

    2. Council Approval

    There are no matters requiring Council approval at this time.

    3. Membership

    The Committee remains open to participation by any interested parties. The lack of regular meetings tends to limit interaction with Committee members.

    4. Accomplishments Toward Committee Objectives

    The Committee continues to monitor developments in corporate laws throughout the country and to consider changes to the Business Corporation Act. This is an ongoing and continuous process.

    5. Meetings and Programs

    Nothing to describe at this time.

    6. Publications

    The Committee sponsored an issue of the Michigan Business Law Journal in 2002.

    7. Legislative/Judicial/Administrative Developments

    The Committee is cooperating in attempts to amend the Business Corporation Act and Michigan Limited Liability Act so as to permit direct conversions by one type of entity into another. These efforts are being spearheaded by James C. Cambridge, who has overseen LLC Act matters on behalf of the Section.

    Senate Bills 593 (amending the general sales tax act) 594 (amending the use tax act) and 595 (amending the income tax act), became Public Acts 579, 580 and 581, effective October 14, 2002. As a result, it is no longer necessary to obtain a tax clearance certificate as a prerequisite to filing a certificate of dissolution for a Michigan corporation or an application for withdrawal for a foreign corporation with a certificate of authority. Tax clearance certificates must now be requested within sixty days after submitting a certificate of dissolution or application for withdrawal.

    Public Act 433 of 2002, which repealed two RJA sections dealing with corporate matters, became law on June 10, 2002.

    The Committee participated in the drafting of the amendments to the Business Corporation Act and the Professional Services Corporation Act that became law as P.A. 57 and 58 of 2001.

    The Committee also prepared and filed an amicus brief that was extensively cited by the special panel of the Michigan Court of Appeals in its reconsideration of the holding in Estes v. Idea Engineering.

    8. Miscellaneous

    The Committee will continue to accept ideas for technical and other amendments to the Business Corporation Act, which is amended periodically. Suggestions in this regard may be addressed to either of the committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Department of Consumer and Industry Services regarding efforts to further streamline corporate filings and information dissemination.

    Justin G. Klimko

December 7, 2002

    Public Act 433 of 2002, which repealed two RJA sections, became law on June 10, 2002.

    Senate Bills 593 (amending the general sales tax act) 594 (amending the use tax act) and 595 (amending the income tax act), all introduced by Senator Bullard and each dealing with the dissolution issue, became Public Acts 579, 580 and 581, effective October 14, 2002. As a result, it is no longer necessary to obtain a tax clearance certificate as a prerequisite to filing a certificate of dissolution for a Michigan corporation or an application for withdrawal for a foreign corporation with a certificate of authority. Tax clearance certificates must now be requested within sixty days after submitting a certificate of dissolution or application for withdrawal.

    The Committee will continue to accept ideas for technical and other amendments to the Business Corporation Act, which is amended periodically. Suggestions in this regard may be addressed to either of the committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Department of Consumer and Industry Services regarding efforts to further streamline corporate filings and information dissemination.

    Justin G. Klimko

September 26, 2002

    The issue of the Michigan Business Law Journal for which the Committee was responsible was published as the Spring 2002 issue.

    The Committee intends to continue to pursue proposed Revised Judicature Act amendments as well as amendments to remove the requirement for obtaining tax clearances upon dissolution. Public Act 433 of 2002, which repealed two RJA sections, became law on June 10, 2002. Senate Bills 593 (amending the general sales tax act) 594 (amending the use tax act) and 595 (amending the income tax act), all introduced by Senator Bullard and each dealing with the dissolution issue, passed the Senate May 1, 2002 and were referred to the House Committee on Finance in July.

    The Committee will continue to accept ideas for technical and other amendments to the Business Corporation Act, which is amended periodically. Suggestions in this regard may be addressed to either of the committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Department of Consumer and Industry Services regarding efforts to further streamline corporate filings and information dissemination.

    Justin G. Klimko

May 18, 2002

    The issue of the Michigan Business Law Journal for which the Committee was responsible has been published as the Spring 2002 issue.

    As mentioned in the Committee's previous report, the Committee filed an amicus curiae brief with the Court of Appeals in connection with the reconsideration by a special Appeals Court panel of the holding in Estes v. Idea Engineering. The Court of Appeals rendered its decision in Estes in early March. The opinion adopted the position urged by the Committee and cited liberally to the amicus brief.

    The Committee intends to continue to pursue proposed Revised Judicature Act amendments as well as amendments to remove the requirement for obtaining tax clearances upon dissolution. Senate Bill 422, which would repeal two RJA sections, was introduced by Senator Bullard in April and passed by the Senate on November 8. It has been reported out of Committee in the House with recommendation for passage and waits further action. Senate Bills 593 (amending the general sales tax act) 594 (amending the use tax act) and 595 (amending the income tax act), all introduced by Senator Bullard and each dealing with the dissolution issue, passed the Senate May 1, 2002 and await House action.

    The Committee will continue to accept ideas for technical and other amendments to the Business Corporation Act, which is amended periodically. Suggestions in this regard may be addressed to either of the committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Department of Consumer and Industry Services regarding efforts to further streamline corporate filings and information dissemination.

    Justin G. Klimko

March 7, 2002

    The Committee is working with ICLE on the next issue of the Michigan Business Law Journal, which should be published in the spring.

    As mentioned in the Committee's previous report, the Committee filed an amicus curiae brief with the Court of Appeals in connection with the reconsideration by a special Appeals Court panel of the holding in Estes v. Idea Engineering. There has been no resolution of that appeal as of the date of this report.

    The Committee intends to continue to pursue proposed Revised Judicature Act amendments as well as amendments to remove the requirement for obtaining tax clearances upon dissolution. Senate Bill 422, which would repeal two RJA sections, was introduced by Senator Bullard in April and passed by the Senate on November 8. It awaits House action.

    The Committee will continue to accept ideas for technical and other amendments to the Business Corporation Act, which is amended periodically. Suggestions in this regard may be addressed to either of the committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Department of Consumer and Industry Services regarding efforts to further streamline corporate filings and information dissemination.

    Justin G. Klimko

December 8, 2001

    As previously noted, amendments to the Michigan Business Corporation Act, Senate Bill 206, and the Michigan Professional Service Corporations Act, Senate Bill 216, became law on July 23, 2001 as P.A. 57 and 58, respectively. An article describing the amendments will be included in the next issue of the Michigan Business Law Journal, which may be published by the time of the Council meeting for which this report is prepared. The Committee is also working with ICLE on the next issue of the Journal, which should be published in the spring.

    At the invitation of the Michigan Court of Appeals and following authorization by the Council at its September 12 meeting, the Committee filed an amicus curiae brief with the Court of Appeals in connection with the reconsideration by a special Appeals Court panel of the holding in Estes v. Idea Engineering. The special panel is charged with reconciling Estes and Baks v. Moroun. The Committee's brief addressed whether Section 489 of the Michigan Business Corporation Act provides a separate cause of action and what the appropriate limitation of actions period should be under Section 489 for matters not governed by the recently-adopted limitations period provided in P.A. 57.

    The Committee intends to continue to pursue proposed Revised Judicature Act amendments as well as amendments to remove the requirement for obtaining tax clearances upon dissolution. Senate Bill 422, which would repeal two RJA sections, was introduced by Senator Bullard in April and passed by the Senate on November 8. It awaits House action.

    The Committee will continue to accept ideas for technical and other amendments to the Business Corporation Act, which is amended periodically. Suggestions in this regard may be addressed to either of the committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Department of Consumer and Industry Services regarding efforts to further streamline corporate filings and information dissemination.

    Justin G. Klimko

September 12, 2001

    Amendments to the Michigan Business Corporation Act, Senate Bill 206, and the Michigan Professional Service Corporations Act, Senate Bill 216, became law on July 23, 2001 as P.A. 57 and 58, respectively. Senator Bill Bullard, Jr. sponsored both acts. Copies of each bill are available at the Michigan Legislature website, www.michiganlegislature.org. The text of the acts will also be reprinted, with a short introduction, in the next issue of the Michigan Business Law Journal. A more detailed description of the amendments will appear in the subsequent issue of the Journal, for which the Committee will be responsible.

    The Committee intends to continue to pursue proposed Revised Judicature Act amendments as well as amendments to remove the requirement for obtaining tax clearances upon dissolution. Senate Bill 422, which would repeal certain RJA sections, was introduced by Senator Bullard in April and referred to the Senate Financial Services Committee.

    The Committee will continue to accept ideas for technical and other amendments to the Business Corporation Act, which is amended periodically. Suggestions in this regard may be addressed to either of the committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Department of Consumer and Industry Services regarding efforts to further streamline corporate filings and information dissemination.

    Justin G. Klimko

May 19, 2001

    The proposed amendments to the Michigan Business Corporation Act, Senate Bill 206, and proposed amendments to the Michigan Professional Service Corporations Act, Senate Bill 216, passed the Michigan Senate and have been referred to the Michigan House Commerce Committee. A copy of Senate Bills 206 and 216 and a brief summary of the amendments under Bill 206 are available from the Committee Chairs.

    In light of the Court of Appeals strongly-worded opinion in Estes v. Idea Engineering & Fabricating, Inc., __ Mich App __ (2001), the Committee is considering making a recommendation that Senate Bill 206 be revised to delete proposed amendments to Section 489 of the Business Corporation Act. The proposed amendments were intended to address problems raised by the Court of Appeals' decision in Baks v. Moroun, 227 Mich App 472 (1998). The language of the Estes opinion, which was highly critical of Baks, has raised the possibility that the Court of Appeals will overturn the Baks holding.

    The proposed Revised Judicature Act amendments, Senate bill 422, have been referred to the Senate Financial Services Committee. These amendments are intended to eliminate obsolete provisions of the RJA which affect corporations.

    Amendments to remove the requirement for obtaining tax clearances upon dissolution have been sent to the Legislative Service Bureau by Senator Bill Bullard but no bills have been introduced yet.

    The Committee will continue to accept ideas for technical and other amendments to the Business Corporation Act, which is amended periodically. Suggestions in this regard may be addressed to either of the committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Department of Consumer and Industry Services regarding efforts to further streamline corporate filings and information dissemination.

    Justin G. Klimko

March 1, 2001

    The amendments to the Michigan Business Corporation Act developed by the Committee were introduced by Senator Bill Bullard, Jr. as Senate Bill 206 on February 13, 2001. Senator Bullard also introduced on that date Senate Bill 216, proposed amendments to the Michigan Professional Service Corporations Act. This amendment is intended to reverse OAG 1989-90 No. 6592 and make clear that the cross-reference in the PSCA to the Business Corporation Act is intended to incorporate all amendments to the BCA. The Attorney General's Opinion held that the cross-reference only incorporates the BCA as in existence as of the date of most recent PSCA amendment, and does not incorporate subsequent changes to the BCA.

    A copy of Senate Bills 206 and 216 and a brief summary of the amendments under Bill 206 are available from the Committee Chairs.

    Council Co-Chair Cy Moscow has also requested of Senator Bullard bills to amend the tax statutes to eliminate the requirement for a tax clearance as a condition to filing of a certificate of dissolution and to eliminate obsolete provisions of the Revised Judicature Act which affect corporations. One such obsolete provision, for example, provides that a corporation is automatically dissolved upon becoming insolvent. Bill requests on these matters have been forwarded to the Legislative Service Bureau.

    The Committee will continue to accept ideas for technical and other amendments to the Business Corporation Act, which is amended periodically. Suggestions in this regard may be addressed to either of the committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Department of Consumer and Industry Services regarding efforts to further streamline corporate filings and information dissemination.

    Justin G. Klimko

December 2, 2000

    The Committee continues to work on amendments to the Michigan Business Corporation Act. Several drafts of the amendments have been reviewed by the Committee throughout the course of calendar 2000. In late August, a draft was sent to its legislative sponsor and subsequently submitted to the Legislative Services Bureau. We are in the process of reviewing the blueback prepared by the LSB for additional changes with the goal of preparing a bill for introduction in the new session of the Legislature which convenes in January. Thereafter we will be engaged in assisting the sponsor in any technical issues relating to the bill and trying to encourage support within the business community for the bill.

    Other projects which the Committee will pursue are legislative amendments to eliminate the need for a tax clearance in connection with dissolution proceedings and amending existing statutes, primarily the Revised Judicature Act, to remove obsolete provisions relating to Michigan corporations.

    The Committee will continue to accept ideas for technical and other amendments to the Business Corporation Act, which is amended periodically. Suggestions in this regard may be addressed to either of the committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Department of Consumer and Industry Services regarding efforts to further streamline corporate filings and information dissemination.

    Justin G. Klimko

September 20, 2000

    I. Educational Outreach

    The Corporate Laws Committee from time to time sponsors or co-sponsors programs and seminars with program presenters such as ICLE. The Committee has not conducted its own separately produced seminars. The committee will be responsible for an issue of the Michigan Business Law Journal in 2001.

    II. Legislative Activity

    The reporters initial draft of the proposed amendments to the Michigan Business Corporation Act was reviewed at a meeting of the committee held in late October. As a result of comments made to that draft, another draft was produced in mid-January and discussed at a meeting of the Business Corporation Act Revision Subcommittee on February 3. Further drafts was turned and discussed at a meeting held on April 27 and a meeting scheduled for September 19, which will have been held prior to distribution of this report to the Council.

    Numerous comments have been made. The committee will continue to pursue its goal of soon having a draft ready to send to seek sponsors in the Michigan legislature.

    Membership Diversity

    Membership in the Committee is open to any interested person.

    IV. Other

    The Committee will continue its efforts to solicit ideas for technical and other amendments to the Act. Suggestions in this regard may be addressed to either of the committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Corporation and Securities Bureau regarding efforts to further streamline corporate filings and information dissemination.

    Justin G. Klimko and Cyril Moscow

May 20, 2000

    I. Educational Outreach

    The Corporate Laws Committee from time to time sponsors or co-sponsors programs and seminars with program presenters such as ICLE. The Committee has not conducted its own separately produced seminars. The committee will be responsible for an issue of the Michigan Business Law Journal in 2001.

    II. Legislative Activity

    The reporters initial draft of the proposed amendments to the Michigan Business Corporation Act was reviewed at a meeting of the committee held in late October. As a result of comments made to that draft, another draft was produced in mid-January and discussed at a meeting of the Business Corporation Act Revision Subcommittee on February 3. A further draft was turned and discussed at a meeting held on April 27.

    Numerous comments have been made, and some issues are still being debated, including the proper treatment of shareholder oppression actions under Section 489 in response to the Court of Appeals' holding in Baks v. Moroun. One of the key debates in this regard has been whether the statute should attempt to define the meaning of "oppressive" conduct. Additional revisions will be made and the committee will continue to pursue its goal of soon having a draft ready to send to seek sponsors in the Michigan legislature.

    III. Membership Diversity

    Membership in the Committee is open to any interested person.

    IV. Other

    The Committee will continue its efforts to solicit ideas for technical and other amendments to the Act. Suggestions in this regard may be addressed to either of the committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Corporation and Securities Bureau regarding efforts to further streamline corporate filings and information dissemination.

    Justin G. Klimko

March 4, 2000

    I. Educational Outreach

    The Corporate Laws Committee from time to time sponsors or co-sponsors programs and seminars with program presenters such as ICLE. The Committee has not conducted its own separately produced seminars. The Committee will be responsible for an issue of the Michigan Business Law Journal in 2001.

    II. Legislative Activity

    The reporters initial draft of the proposed amendments to the Michigan Business Corporation Act was reviewed at a meeting of the Committee held in late October. As a result of comments made to that draft, another draft was produced in mid-January and discussed at a meeting of the Business Corporation Act Revision Subcommittee on February 3. Numerous comments were made, and some issues are still being debated, including the proper treatment of shareholder oppression actions under Section 489 in response to the Court of Appeals' holding in Baks v. Moroun. Additional revisions will be made and the Committee will continue to pursue its goal of soon having a draft ready to send to seek sponsors in the Michigan legislature.

    III. Membership Diversity

    Membership in the Committee is open to any interested person.

    IV. Other

    The Committee will continue its efforts to solicit ideas for technical and other amendments to the Act. Suggestions in this regard may be addressed to either of the Committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Corporation and Securities Bureau regarding efforts to further streamline corporate filings and information dissemination.

December 4, 1999

    I. Educational Outreach

    The Corporate Laws Committee from time to time sponsors or co-sponsors programs and seminars with program presenters such as ICLE. The Committee has not conducted its own separately-produced seminars. The Committee will be responsible for an issue of the Michigan Business Law Journal in 2001.

    II. Legislative Activity

    The reporter's initial draft of the proposed amendments to the Michigan Business Corporation Act was reviewed at a meeting of the Committee held in late October. As a result of comments made to that draft, another draft will be produced for further review with a goal of having a bill ready to introduce in the first quarter of 2000.

    III. Membership Diversity

    Membership in the Committee is open to any interested person.

    IV. Other

    The Committee will continue its efforts to solicit ideas for technical and other amendments to the Act. Suggestions in this regard may be addressed to either of the committee co-chairs, Cyril Moscow or Justin G. Klimko. The Committee also will consult with the Corporation and Securities Bureau regarding efforts to further streamline corporate filings and information dissemination.

     

 

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