Posts Tagged ‘Akin Gump’

Top 5 Delaware Case Developments in 2013 for M&A Practitioners

Editor’s Note: Kerry E. Berchem is partner and co-head of corporate practice at Akin Gump Strauss Hauer & Feld LLP. The following post is based on an Akin Gump Client Alert by Elisabeth Cappuyns, Trey Muldrow, and Carlos Bermudez. This post is part of the Delaware law series, cosponsored by the Forum and Corporation Service Company; links to other posts in the series are available here.

During 2013, in addition to the important changes to the Delaware General Corporation Law (“DGCL”) and the Limited Liability Company Act, described here, the Delaware courts issued a number of decisions that have a direct impact on the M&A practice. Below are our Top 5 case law picks for M&A practitioners:

1. A new look at the standard of review in going-private mergers (the Business Judgment Rule)

In its In re MFW Shareholders Litigation (May 29, 2013) decision, the Court of Chancery held that in going-private mergers with a controlling stockholder on both sides the deferential business judgment standard of review applies, instead of the entire fairness standard, if certain procedural safeguards are included from the beginning. Specifically, the controlling stockholder has to agree at the outset to proceed with the merger only if the transaction is both (1) negotiated and approved by an attentive special committee comprised of directors who are independent of the controlling stockholder and fully empowered to decline the transaction and to retain its own financial and legal advisors and (2) conditioned on the un-coerced, fully informed and non-waivable approval of a majority of the unaffiliated minority stockholders.

…continue reading: Top 5 Delaware Case Developments in 2013 for M&A Practitioners

Practice Tips for M&A Practitioners for 2014

Posted by Kerry E. Berchem, Akin Gump Strauss Hauer & Feld LLP, on Sunday February 2, 2014 at 9:00 am
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Editor’s Note: Kerry E. Berchem is partner and co-head of corporate practice at Akin Gump Strauss Hauer & Feld LLP. The following post is based on an Akin Gump Client Alert. This post is part of the Delaware law series, which is cosponsored by the Forum and Corporation Service Company; links to other posts in the series are available here.

Based on a number of cases decided by the Delaware courts in 2013, below we summarize practice tips regarding careful drafting of contractual provisions and complying with technical and statutory requirements.

Disclaimers of Reliance and Accuracy Clauses Likely Do Not Bar Fraud Claims

The Delaware courts have had several opportunities to examine a range of disclaimer provisions in agreements, usually an integration (or “entire agreement”) clause and a disclaimer of extra-contractual statements, to determine if they were adequate in barring fraud claims. Although in the past the courts have disallowed fraud claims based on rather thinly worded disclaimers of extra-contractual statements (i.e., disclaimers that do not include an express statement of non-reliability or non-reliance), recently the courts seem to be requiring an express statement that the buyer was not relying on extra-contractual statements to bar such fraud claims. See, for example, the decisions of the Court of Chancery in Anvil Holding Corporation v. Iron Acquisition Company, Inc. (May 17, 2013), and of the Superior Court in Alltrista Plastics, LLC v. Rockline Industries (September 4, 2013) and TEK Stainless Piping Products, Inc. v. Smith (October 14, 2013).

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Top 10 Topics for Directors in 2014

Posted by Noam Noked, co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Tuesday December 31, 2013 at 9:00 am
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Editor’s Note: The following post comes to us from Kerry E. Berchem, partner and co-head of the corporate practice group at Akin Gump Strauss Hauer & Feld LLP. This post is based on an Akin Gump corporate alert primarily drafted by Tracy Crum and N. Kathleen Friday; the full publication, including footnotes, is available here.

U.S. public companies face a host of challenges as they enter 2014. Here is our list of hot topics for the boardroom in the coming year:

  • 1. Oversee strategic planning amid continuing fiscal uncertainty and game-changing advances in information technology
  • 2. Address cybersecurity
  • 3. Set appropriate executive compensation as shareholders increasingly focus on pay for performance and activists target pay disparity
  • 4. Address the growing demands of compliance oversight
  • 5. Assess the impact of health care reform on the company’s benefit plans and cost structure
  • 6. Determine whether the CEO and board chair positions should be separated
  • 7. Ensure appropriate board composition in light of increasing focus on director tenure and diversity
  • 8. Cultivate shareholder relations and strengthen defenses as activist hedge funds target more companies
  • 9. Address boardroom confidentiality
  • 10. Consider whether to adopt a forum selection bylaw

…continue reading: Top 10 Topics for Directors in 2014

Delaware Court Addresses Revlon Duties in Single-Bidder Sale-of-Control Transaction

Posted by Noam Noked, co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Tuesday July 9, 2013 at 9:24 am
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Editor’s Note: The following post comes to us from C.N. Franklin Reddick III, partner and co-head of the corporate practice group at Akin Gump Strauss Hauer & Feld LLP. This post is based on an Akin Gump corporate alert, and is part of the Delaware law series, which is cosponsored by the Forum and Corporation Service Company; links to other posts in the series are available here.

The Delaware Court of Chancery recently addressed on two separate occasions—in In re Plains Exploration & Production Co. Stockholder Litigation [1] and Koehler v. NetSpend Holdings, Inc. [2]—whether a board of directors satisfied its Revlon duties in connection with a sale-of-control transaction involving negotiations with a single bidder. In both cases, the court found that the board’s initial decision to pursue a single-bidder process was reasonable. However, while the court in Plains found that the directors satisfied their fiduciary duties under the Revlon standard, the court in NetSpend, found that the directors would likely fail to meet their burden, under Revlon, of proving that they were fully informed and acted reasonably throughout the sale process. Specifically, in NetSpend, the court found that deficiencies in the fairness opinion and the combination of deal protection devices—which included a no-shop provision, a short preclosing period and a “don’t ask, don’t waive” provision that crystallized existing standstill agreements with parties that had previously expressed an interest in the company—did not pass muster under Revlon. These cases provide important lessons for companies considering whether to pursue, and how to conduct, a single-bidder sale-of-control transaction.

…continue reading: Delaware Court Addresses Revlon Duties in Single-Bidder Sale-of-Control Transaction

Top 10 Topics for Directors in 2013

Posted by Noam Noked, co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Saturday December 29, 2012 at 9:58 am
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Editor’s Note: The following post comes to us from Kerry E. Berchem, partner and co-head of the corporate practice group at Akin Gump Strauss Hauer & Feld LLP. This post is based on an Akin Gump corporate alert; the full publication, including footnotes, is available here.

A fog of uncertainty hangs over U.S. public companies as 2013 approaches. The looming fiscal cliff, increased regulatory burdens, the ongoing European debt crisis, growing Middle East unrest and slowing global growth are just a few of the uncertainties companies will have to navigate as they chart a course for the coming year. Here is our list of hot topics for the boardroom in 2013:

…continue reading: Top 10 Topics for Directors in 2013

Lawsuit Against Short Sellers Dismissed on Constitutional Grounds

Posted by Noam Noked, co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Thursday October 18, 2012 at 9:07 am
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Editor’s Note: The following post comes to us from Douglass B. Maynard, partner and co-head of the New York litigation section of Akin Gump Strauss Hauer & Feld LLP. This post is based on an Akin Gump memorandum.

On August 16, 2012, New York Supreme Court Justice Carol R. Edmead dismissed a defamation action brought by Silvercorp Metals Inc. (“Silvercorp”), a publicly-traded company, against a hedge fund and a group of other defendants who issued negative reports opining that Silvercorp might be engaging in fraud. This decision has important ramifications for professional investors and analysts who are considering publicizing their opinions regarding companies such as Silvercorp, who may retaliate with the threat of litigation.

Silvercorp, a Canadian based company, is reported to be one of the largest silver producers in China and mines other minerals in both China and Canada. Its securities are traded on both the New York and Toronto Stock Exchanges.

The reports in question, which were issued in August 2011 and September 2011, were prepared by hedge funds and investors looking into the accuracy and integrity of Silvercorp’s financials and statements concerning the quality of its mineral reserves. According to the filings in the case, the reports were disseminated anonymously through the Internet and mailings to Canadian securities regulators. The reports were issued by two different groups of defendants who were acting independently of one another. In essence, the reports reached the same conclusion: that Silvercorp was engaged in fraud. The reports were based on documents, both publicly available and privately obtained, which were disclosed with the reports. Among the documents relied on were Chinese news articles regarding an auction of a minority interest in one of Silvercorp’s most important mines, reports compiling financial data that was represented as being copied from Chinese regulatory filings, and an analysis of samples of ore that the authors believed came from a Silvercorp mine.

…continue reading: Lawsuit Against Short Sellers Dismissed on Constitutional Grounds

Due Diligence Considerations for Nominees

Posted by Scott Hirst, co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Saturday October 1, 2011 at 9:45 am
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Editor’s Note: The following post comes to us from Ackneil M. Muldrow, partner focusing on merger and acquisition transactions at Akin Gump Strauss Hauer & Feld LLP, and is based on an article by Mr. Muldrow and Louis Kacyn of Egon Zehnder International which originally appeared in Thomson Reuters Accelus “Business Law Currents” publication.

When individuals are approached to join the board of directors of a public or private company, they are often thrilled by the opportunity to provide strategic guidance and advice to a new business enterprise, build new relationships with board members and perhaps transition to a new point in their careers.  However, it is rare for a nominee to complete adequate and systematic due diligence on the prospective company and the members of its board of directors prior to joining.

The premise of this article is simple: due diligence should be a two-way endeavor, undertaken by the company as well as the nominee.  This article provides practical advice for prospective nominees regarding the more refined issues they should consider and the questions they should ask prior to joining a board. With these inquiries significant considerations may be identified and then used in a nominee’s decision calculus.

…continue reading: Due Diligence Considerations for Nominees

 
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