CSC’s First State Update on the LLC Act
The first state update from CSC focuses on the Delaware LLC Act. First State Update uses Facebook as its platform for news updates. However, the company censors or blocks comments, thereby violating the right to free speech. Even worse, First State Update does not explain why their comments are removed. In one example, a commenter complained about a news report’s accuracy. The commenter was not able to view the news post to make a valid complaint.
CSC’s first state update: 2019 Case Law Developments and Updates to Delaware’s LLC Act
In CSC’s first state update on the LLC Act, its partners discuss recent changes to the Delaware law, focusing on electronic transactions, signatures, series, division of limited liability companies, and contractual appraisal rights. These developments and updates are discussed in detail throughout the webinar. For further information, please contact a CSC attorney or attend our free webinar. Register here.
The updates in Delaware’s LLC Act clarify the legal definition of a “debtor” under UCC law. Previously, a debtor could be an LLC that had registered an organization in its name. The amended LLC Act clarifies that this exception applies only to “series” of LLCs. An LLC can be a debtor under UCC law, but must file annual reports detailing its governance and ownership.
The changes to Delaware’s LLC Act reflect current case law, including recent decisions and guidance. The Act focuses on limited liability company (LLC) formation and management, which are both essential for the formation of a business. Delaware law continues to play an important role in U.S. corporate practice. In addition to addressing issues related to the LLC and LLP formation, the Delaware Limited Liability Company Act also governs partnerships, which have distinct rights and responsibilities.
Recent case law in Delaware has made the LLC Act more robust than ever. For example, in the recent Delaware case of Wenske v. Blue Bell Creameries, the court found that a conflicted general partner cannot shed its disability by appointing a disinterested third party to the board. Applying principles of agency law to agency law, the court determined that the principals are still deemed to be the control of the agent’s decisions, whether they exercise actual control over the company or not.
Recent changes to Delaware’s LLC Act are also expected to impact corporate law in the coming year. The amendments to the LLC Act include Section 18-106e, which creates a safe harbor process for voidable actions and enables LLCs to amend their operating agreements retroactively. Additionally, LLCs can waive issues relating to ratified actions and backdate them.
Recent decisions in the United States Supreme Court are a good place to start. The Supreme Court recently rejected a claim that states cannot exercise general jurisdiction over foreign corporations. This would reduce the certainty of law and cause businesses to be subject to capricious litigation practices. Moreover, it would be inconsistent with fundamental principles of due process. Further, Delaware is a state with general jurisdiction over foreign corporations, so it should be more cautious in exercising its authority over foreign corporations.
Tesla reported 310,048 vehicle deliveries for the first quarter
Tesla reported 310,048 vehicle deliveries in the first quarter of this year, which was in line with Wall Street’s expectations. Despite the drop in U.S. sales, the company still exceeded analysts’ expectations. The company has a strong cash balance, as it paid off its $2.1 billion debt. Tesla’s operating expenses also increased sequentially, but it remains under $100 million. In addition, vehicle production continued to grow, as the company reported an increase in deliveries of 68%.
The company reported a record-breaking Q1 delivery quarter during the first quarter of 2022, with 95% of deliveries going to its Model 3 and Model Y. The company continues to face disruptions in China, with the latest being a spike in COVID-19 cases. Despite these disruptions, Tesla’s CEO, Elon Musk, remains confident in achieving the same growth rate of 50% this year.
Although deliveries are closely watched because they underpin the company’s financial results, the company’s overall sales have been consistently higher since the beginning of the year. And while the numbers are still conservative, they are a leading barometer for future demand for electric vehicles. While the company hasn’t broken down sales by geography, its main markets remain the U.S. and China. Its most popular models are the Model 3 sedan and the Model 3 crossover.
Despite the escalating costs of gas, the production of electric cars continued to rise. Despite the challenges in raw materials update and semiconductors, the company’s production was higher than anticipated, and deliveries surpassed expectations. Tesla delivered 295,324 Model 3 sedans, 14,724 Model Y sport utility vehicles and 143,048 Model S luxury sedans. And as demand for electric cars rises, demand for the vehicles will be greater than ever. However, a lack of inventory could stifle sales.
Despite the fact that Tesla does not break down production by country, the company produced vehicles in three continents during the first quarter. In the previous quarter, it had ramped up production near Berlin, Germany. It has also started delivering the first Model Y vehicles. The Texas plant will be ready for Model Y production by late 2021. The Texas factory is scheduled to open on Thursday.
GM and Ford also reported strong first quarter EV sales, although both companies have yet to begin mass production of their new EVs. VW reported 2,755 EVs during the first quarter, while Ford delivered 6,734 EVs. Despite these high numbers, GM and BMW have indicated aggressive plans to ramp up EV production, and both companies have already made significant progress in reducing costs.
COVID-19 worked in a security role at Valdosta State Prison
Earlier this month, the Department of Corrections in Valdosta, Georgia, confirmed the first case of the coronavirus in a prison employee. The prisoner was convicted of federal fraud and orchestrated a scheme to claim government funds for a pandemic. He used fraud and identity theft to pull off the scam. However, the prison has not notified the inmates.