Posts Tagged ‘Brian Breheny’

The Landscape of CEO Succession Issues

Posted by Brian Breheny, Skadden, Arps, Slate, Meagher & Flom LLP, on Tuesday July 23, 2013 at 9:10 am
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Editor’s Note: Brian V. Breheny is a partner at Skadden, Arps, Slate, Meagher & Flom LLP. The following post is based on a Skadden memorandum by Mr. Breheny, Regina OlshanNeil M. LeffMarc S. GerberMichael R. Bergmann.

A board’s decision as to whether, when and how to terminate the employment of a CEO and hire a successor is among the most critical decisions facing the board of any company—large or small, public or private, established or start-up. In most cases, however, a CEO termination is a rare event and one with respect to which—as would be expected—the board, the company’s general counsel and its human resources professionals may have little or no experience. In addition, the situation is further complicated by contractual, regulatory and personal factors.

This post describes the substantive and procedural considerations that boards will want to take into account when there is a change of CEO. In it, we assume that the board has made the business decision relating to CEO succession and is focused on strategy, implementation and minimizing potentially costly and/or embarrassing oversights and errors. Many but not all of the same considerations apply in respect of executive officers other than the CEO, and some additional considerations may apply to such other officers; in any event, their relative significance likely will differ from the case of the CEO.

…continue reading: The Landscape of CEO Succession Issues

Getting Back to Basics with Rule 10b5-1 Trading Plans

Posted by Brian Breheny, Skadden, Arps, Slate, Meagher & Flom LLP, on Friday April 19, 2013 at 12:34 pm
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Editor’s Note: Brian V. Breheny is a partner at Skadden, Arps, Slate, Meagher & Flom LLP. The following post is based on a Skadden memorandum by Mr. Breheny, Katherine D. Ashley, and Amber K. Hillard.

In late 2012, The Wall Street Journal published a number of articles that analyzed the trading practices of certain public company executives, in many cases under trading plans that were entered into in accordance with the affirmative defense provisions adopted by the U.S. Securities and Exchange Commission (SEC) pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934. [1] The trades examined in the Journal articles were called into question because they were sizable and were reported to have occurred shortly before company news updates. The articles also compared returns by executives who traded irregularly against those who followed a consistent pattern, and concluded that irregular trading resulted in greater gains. These articles have reignited interest in “best practices” for Rule 10b5-1 trading plans.

The Council of Institutional Investors (CII), a group of pension funds that oversees more than $3 trillion in assets, has picked up on the issue of potential misuse of Rule 10b5-1 trading plans and submitted a rulemaking petition to the SEC requesting interpretive guidance or amendments to Rule 10b5-1. [2] CII recommends that the SEC:

…continue reading: Getting Back to Basics with Rule 10b5-1 Trading Plans

Section 13(r) Disclosure Guidance for Public Companies

Posted by Brian Breheny, Skadden, Arps, Slate, Meagher & Flom LLP, on Thursday February 21, 2013 at 9:10 am
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Editor’s Note: Brian V. Breheny is a partner at Skadden, Arps, Slate, Meagher & Flom LLP. This post is based on an Eight Law Firm Consensus Report by Gibson, Dunn & Crutcher LLP; Hogan Lovells US LLP; Latham & Watkins LLP; Mayer Brown LLP; Morrison & Foerster LLP; O’Melveny & Myers LLP; Skadden, Arps, Slate, Meagher & Flom LLP; and Weil, Gotshal & Manges LLP.

Starting in February 2013, the Iran Threat Reduction and Syria Human Rights Act (the “Threat Reduction Act”) will impose new reporting requirements on U.S. domestic and foreign companies that are required to file reports with the U.S. Securities and Exchange Commission (the “SEC”) pursuant to Section 13(a) of the Securities Exchange Act of 1934 (the “Exchange Act”). In particular, Section 219 of the Threat Reduction Act added new Section 13(r) to the Exchange Act. Under Section 13(r), Annual Reports on Form 10-K, Annual Reports on Form 20-F and Quarterly Reports on Form 10-Q filed pursuant to Exchange Act Section 13(a) must include disclosure of contracts, transactions and “dealings” with Iranian and other entities. Section 13(r) is effective beginning with reports with a due date after February 6, 2013.

The Staff of the Division of Corporation Finance of the SEC (the “SEC Staff”) has provided helpful guidance on implementation of these new requirements in Exchange Act Compliance and Disclosure Interpretations Questions 147.01-147.07 (available at http://www.sec.gov/divisions/corpfin/guidance/exchangeactsections-interps.htm). However, many questions remain, and the following questions and answers represent the consensus views of the undersigned law firms.

None of the firms subscribing to this report intends thereby to give legal advice to any person. The undersigned firms recommend that counsel be consulted with respect to matters addressed in this report. The answers below may need to be modified based upon unique facts and circumstances.

…continue reading: Section 13(r) Disclosure Guidance for Public Companies

Disclosure of Certain Iran-Related Activities

Posted by Brian Breheny, Skadden, Arps, Slate, Meagher & Flom LLP, on Tuesday October 23, 2012 at 9:12 am
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Editor’s Note: Brian V. Breheny is a partner at Skadden, Arps, Slate, Meagher & Flom LLP. This post is based on a Skadden, Arps memorandum by Mr. Breheny, Marc S. Gerber, and Samuel Scrimshaw.

On August 10, 2012, President Obama signed the Iran Threat Reduction and Syria Human Rights Act of 2012 (ITR Act) into law. Section 219 of the ITR Act (Section 219) requires companies that file public reports with the U.S. Securities and Exchange Commission (SEC) to disclose certain additional information in their annual and quarterly reports, including whether they or any of their affiliates knowingly have engaged in certain activities that are sanctionable pursuant to the Iran Sanctions Act of 1996 (1996 Act) or the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010 (2010 Act) or knowingly have engaged in any unlicensed transaction with the government of Iran or with persons designated for sanctions pursuant to certain executive orders (a group that includes most Iranian banks and many large commercial enterprises).

The provisions of Section 219 do not require SEC rulemaking to become effective. As a result, the disclosure requirements of Section 219 will take effect with respect to periodic reports on Forms 10-K, 10-Q, 20-F and 40-F that are required to be filed with the SEC on or after February 6, 2013.

New disclosure requirements. Section 219 requires an SEC reporting company to disclose whether, during the period covered by a periodic report, it or its affiliates knowingly engaged in:

…continue reading: Disclosure of Certain Iran-Related Activities

Proposed Initiatives May Affect Capital Formation and Public Reporting Requirements

Posted by Noam Noked, co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Saturday March 17, 2012 at 7:37 am
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Editor’s Note: The following post comes to us from Brian V. Breheny, partner at Skadden, Arps, Slate, Meagher & Flom LLP, and is based on a section from Skadden’s 2012 Insights that was published earlier this year, contributed by Mr. Breheny, Stacy J. Kanter, Michael J. Zeidel, Andrew J. Brady, and Pallas A. Comnenos.

Recent regulatory and legislative initiatives relating to capital formation and public reporting requirements, if implemented, would have a significant effect on privately held companies and publicly traded small and emerging businesses. Although the ultimate outcomes and timing of these initiatives are unknown, we expect at least some of them to be adopted in 2012. Because the proposals could materially impact the timing of when a company decides to go public, how it attracts, retains and pays employees, and the manner in which issuers and investment banks conduct offerings, issuers and their advisors should closely monitor developments related to these initiatives.

Prompted by a series of letters in the spring of 2011 between Rep Darrell E. lssa (R-CA), Chairman of the House Committee on Oversight and Government Reform, and Mary L. Schapiro, Chairman of the Securities and Exchange Commission (SEC), in which Chairman lssa criticized perceived regulatory impediments to capital formation, the staff of the Division of Corporation Finance of the SEC (the Division) has committed to undertake a review of certain regulatory provisions, including:

…continue reading: Proposed Initiatives May Affect Capital Formation and Public Reporting Requirements

SEC Disclosure Guidance on Exposures to European Sovereign Debt

Posted by Noam Noked, co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Friday February 3, 2012 at 10:08 am
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Editor’s Note: The following post comes to us from Brian V. Breheny, partner at Skadden, Arps, Slate, Meagher & Flom LLP, and is based on a Skadden memorandum by Mr. Breheny and Andrew J. Brady.

On Friday, January 6, 2012, the staff of the SEC’s Division of Corporation Finance issued the fourth installment in its new Disclosure Guidance Topic series. Topic No. 4 focuses on the exposures of registrants to the debt of certain European countries. The staff specifically highlighted its concern about “the risks to financial institutions that are SEC registrants from direct and indirect exposures to” European sovereign debt.

Enhanced Disclosures

The goal of this new guidance is to expand and enhance the disclosures that registrants provide related to sovereign debt exposures, to ensure that investors have transparent and comparable information about the uncertainties of these exposures. This information generally is included in registrants’ disclosures about risk factors, qualitative and quantitative market risks, and management’s discussion and analysis. Bank holding companies and other registrants engaging in similar lending and deposit activities also are required to make the disclosures required by the SEC’s Industry Guide 3 (Statistical Disclosure by Banking Holding Companies).

…continue reading: SEC Disclosure Guidance on Exposures to European Sovereign Debt

SEC Staff Focus on Offshore Cash Holdings

Posted by Noam Noked, co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Saturday October 15, 2011 at 10:04 am
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Editor’s Note: The following post comes to us from Brian V. Breheny, partner at Skadden, Arps, Slate, Meagher & Flom LLP, and is based on a Skadden memorandum by Mr. Breheny, Andrew J. Brady, and Derek B. Swanson.

As reported recently in the press, the SEC staff has, with greater regularity, been issuing comments to companies seeking disclosure of the extent of offshore cash holdings and the impact of such offshore holdings on the company’s liquidity position.  In general, the staff appears to be concerned about the U.S. federal income tax consequences of repatriation of offshore holdings, especially where it appears those holdings serve as a key source of liquidity for the company on a consolidated basis.

Consistent with the SEC’s recent interpretive guidance on the presentation of liquidity and capital resources disclosures in Management’s Discussion and Analysis, the staff appears to be focusing its attention on companies that have significant offshore cash (and cash equivalents) holdings to enhance disclosures in respect of those cash holdings.  In particular, the staff has asked companies to, among other things:
…continue reading: SEC Staff Focus on Offshore Cash Holdings

 
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