Yearly Archives: 2012

New Personal Use of Corporate Aircraft Tax Rules

Posted by Arthur H. Kohn, Cleary Gottlieb Steen & Hamilton LLP, on
Saturday, September 8, 2012
, ,
More from: , , , , , ,

Arthur Kohn is a partner at Cleary Gottlieb Steen & Hamilton LLP. This post is based on a Cleary Gottlieb memorandum by Mr. Kohn, Sheldon Alster, Mary Alcock, Jeffrey Penn, Caroline Hayday and Corey Goodman.

On August 1, 2012, the Internal Revenue Service (the “IRS”) published final regulations concerning the tax deductibility of corporate expenses associated with the personal use by employees of corporate aircraft. [1] As noted below, these rules may have implications for those involved with public-company executive compensation disclosure, as well as of course for tax practitioners who must apply the rules to prepare federal income tax returns. [2] Generally, the principal takeaways are as follows:

READ MORE »

Delaware Supreme Court Affirms $2 Billion Damages Award

Posted by Stephen P. Lamb, Paul, Weiss, Rifkind, Wharton & Garrison LLP, on
Friday, September 7, 2012
, , ,
More from: , ,

Stephen Lamb is a partner at Paul, Weiss, Rifkind, Wharton & Garrison LLP focusing on Delaware corporate law and governance issues. This post is based on a Paul Weiss client memorandum by Mr. Lamb and Jospeh Christensen. 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.

In Americas Mining Corporation the Delaware Supreme Court affirmed the Court of Chancery’s decision in the Southern Peru Copper litigation in which the Court of Chancery awarded damages of $2 billion and $300 million in attorneys’ fees.

While the damage and fee levels were unprecedented, the Delaware Supreme Court found that the Court of Chancery followed existing precedent and exercised its discretion appropriately in awarding such amounts after the plaintiffs had prevailed in showing that Southern Peru Copper had overpaid to acquire an asset owned by its controlling stockholder. The Delaware Supreme Court affirmed the Court of Chancery’s calculation of the damages award based on the difference between the fair value of the asset and the amount paid. Further, the Delaware Supreme Court found that the Court of Chancery properly used its discretion in awarding the attorneys’ fee as a percentage of the damages award.

READ MORE »

Libor for Detection and Deterrence of Cartel Wrongdoing

Posted by June Rhee, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on
Friday, September 7, 2012
, , , ,
More from: ,

The following post comes to us from Rosa M. Abrantes-Metz, Principal at Global Economics Group, LLC and Adjunct Associate Professor at New York University Stern School of Business, and D. Daniel Sokol, Associate Professor at the University of Florida Levin College of Law and Visiting Professor for the 2012-13 academic year at the University of Minnesota Law School.

Our paper, The Lessons from Libor for Detection and Deterrence of Cartel Wrongdoing (forthcoming Harvard Business Law Review), examines the antitrust implications of Libor. We are cautious to draw overly broad conclusions until more facts come out in the public domain. What we note at this time, based on public information, is that the alleged Libor conspiracy and manipulation seems not to be the work of a rogue trader. Rather it seems to have been organized across firms and apparently required the active knowledge of a number of individuals at relatively high levels of seniority among certain Libor setting banks.

READ MORE »

Proposed Rule Regarding General Solicitation and Advertising

Posted by the Harvard Law School Forum on Corporate Governance & Financial Regulation, on
Thursday, September 6, 2012
, , , , ,
More from:
Editor’s Note: Mary Schapiro is Chairman of the U.S. Securities and Exchange Commission. This post is based on a statement from Chairman Schapiro, available here. The views expressed in this post are those of Chairman Schapiro and do not necessarily reflect those of the Securities and Exchange Commission, the other Commissioners, or the Staff.

Background

The Commission considered a proposed rule mandated by the JOBS Act to eliminate the current prohibition against general solicitation and general advertising in certain securities offerings — particularly offerings conducted under Rule 506 of Regulation D.

Rule 506 is one of the exemptions that has been widely used by U.S. and foreign issuers to raise capital without registering their securities offerings.

In 2011, the estimated amount of capital raised in these types of exempt offerings was just over $1 trillion, which is comparable to the amount of capital raised in registered offerings during this same period.

These figures underscore the importance of these exemptions for companies seeking capital in the United States.

When the Commission adopted Rule 506 more than three decades ago, it said the issuer, or any person acting on its behalf, could use the exemption only if they were not offering or selling securities through general solicitation or general advertising.

READ MORE »

Increasing the Vulnerability of Investors

Posted by Luis A. Aguilar, Commissioner, U.S. Securities and Exchange Commission, on
Thursday, September 6, 2012
, , , , ,
More from:
Editor’s Note: Luis A. Aguilar is a Commissioner at the U.S. Securities and Exchange Commission. This post is based on a statement from Commissioner Aguilar; the full statement, including footnotes, is available here. The views expressed in the post are those of Commissioner Aguilar and do not necessarily reflect those of the Securities and Exchange Commission, the other Commissioners, or the Staff.

The Commission considered a Congressional mandate to amend our private placement rules, allowing issuers to offer securities by means of general solicitation and general advertising, provided only that all purchasers are accredited investors.

I cannot support the proposal, because it presents a framework that is not balanced and that fails to address the acknowledged increased vulnerability of investors. In fact, there is no consideration of any of the commenters’ proposals that would have decreased investor vulnerability.

READ MORE »

SEC Adopts Final Conflict Minerals Rules

Posted by Richard J. Sandler, Davis Polk & Wardwell LLP, on
Wednesday, September 5, 2012
, , , , ,
More from: ,

Richard J. Sandler is a partner at Davis Polk & Wardwell LLP and co-head of the firm’s global corporate governance group. This post is based on a Davis Polk client memorandum, available here.

The SEC voted to implement the Dodd-Frank Act’s reporting requirements relating to “conflict minerals” — cassiterite, columbite-tantalite, gold, wolframite and other minerals determined by the U.S. government to be financing conflict in the Democratic Republic of Congo or adjoining countries, referred to as the “DRC countries” or “covered countries.” Companies must comply with the final rules for the calendar year beginning January 1, 2013 with the first reports due May 31, 2014.

The final rules adopted contain substantial changes from the SEC’s original proposal in December 2010. Below is a summary of the changes. We will provide a more in-depth analysis of the rules once we have fully analyzed the adopting release.

READ MORE »

The Labor Market for Directors, Reputational Concerns, and Externalities

Posted by R. Christopher Small, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on
Wednesday, September 5, 2012
, , ,
More from: ,

The following post comes to us from Doron Levit of the Department of Finance at the University of Pennsylvania and Nadya Malenko of the Department of Finance at Boston College.

In the paper, The Labor Market for Directors, Reputational Concerns, and Externalities in Corporate Governance, which was recently made publicly available on SSRN, we examine how the labor market for directors and directors’ reputational concerns affect corporate governance.

Being a director on the board of a public company is a privilege that often brings generous monetary compensation, prestige, publicity, power, and access to valuable networks. In order to retain old board seats and gain new ones, directors need to develop a reputation and prove they are a good match for other companies. However, it is not clear what reputation is “relevant” in this context. If corporate governance is strong and boards of other companies protect the interests of their shareholders, then building a reputation for being shareholder-friendly can help in obtaining more directorships. On the other hand, if corporate governance is weak and boards of other companies are captured by their managers who want to maintain power, then having a reputation for being management-friendly might be more useful. The goal of this paper is to understand how the labor market for directors and these conflicting reputational concerns affect directors’ behavior and the quality of corporate governance.

READ MORE »

The SEC Punts (Again) on Financial Stability Reform

Posted by the Harvard Law School Forum on Corporate Governance & Financial Regulation, on
Tuesday, September 4, 2012
, , ,
More from:
Editor’s Note: Jeffrey Gordon is the Richard Paul Richman Professor of Law and Co-Director of the Center for Law and Economics at Columbia Law School.

In an all-too-familiar pattern, the SEC has backed down in the face of industry pressure and dropped a key proposal to prevent a repetition of the 2008 financial crisis. Despite valiant efforts by Chair Mary Shapiro, a divided Commission has rejected further steps toward reform of money market funds, a $3 trillion dollar financial intermediary that was at ground zero of the financial crisis and that now presents a continuing threat to financial system stability.

A powerful industry group, mutual funds and some of their clients, have persuaded three SEC Commissioners to ignore the near implosion of the money market fund sector in 2008. Here are their names, for now is an accountability moment: Luis A. Aguilar, Daniel M. Gallagher, and Troy A. Parades.

READ MORE »

Board Engagement with Corporate Shareholders

Posted by Jeffrey Stein, King & Spalding LLP, on
Tuesday, September 4, 2012
,
More from: , , ,

Jeffrey Stein is a partner in the Corporate Practice Group at King & Spalding LLP. This post is based on a report from the Lead Director Network by Mr. Stein, Bill Baxley, and Rob Leclerc, available here.

Historically, there has been little direct dialogue between individual board members and shareholders. This is changing, however, as directors, particularly lead directors, face increasing pressure to meet directly with their companies’ largest shareholders. Accordingly, at many companies, individual directors are beginning to engage with investors on an ongoing basis, and not just in response to a particular issue or crisis.

The Lead Director Network (the “LDN”), a group of lead directors, presiding directors and non-executive chairmen from many of America’s leading companies, met on June 19, 2012 to discuss the relationship between directors and major shareholders. Representatives of two institutional investors also participated in the meeting. Following this meeting, King & Spalding and Tapestry Networks have published a ViewPoints report here to present highlights of the discussion that occurred at the meeting and to stimulate further consideration of this subject.

The following provides highlights from the LDN meeting, as described in the ViewPoints report.

READ MORE »

PCAOB Adopts New Audit Standard on Communications with Audit Committees

Posted by John F. Olson, Gibson, Dunn & Crutcher LLP and Georgetown Law Center, on
Monday, September 3, 2012
, , ,
More from: , , ,

John Olson is a founding partner of Gibson, Dunn & Crutcher’s Washington, D.C. office and a visiting professor at the Georgetown Law Center. This post is based on a Gibson Dunn alert by Gillian McPhee and Michael Scanlon.

At an open meeting held on August 15, 2012, the Public Company Accounting Oversight Board (“PCAOB”) voted to approve new Auditing Standard No. 16, Communications with Audit Committees. Although the new standard retains most of the preexisting communication requirements, there are a number of new areas that the auditor must discuss with the audit committee, and there are some areas where the auditor must seek specific responses from the audit committee. The new standard, available at http://pcaobus.org/Rules/Rulemaking/Docket030/Release_2012-004.pdf, is intended to benefit investors by enhancing the relevance and quality of communications between the auditor and audit committee, facilitating audit committee oversight of financial reporting and fostering improved financial reporting.

Background and Effective Dates

The PCAOB initially proposed Auditing Standard No. 16 for comment in March 2010 and issued a revised proposal in December 2011 following an initial comment period and feedback received at a September 2010 roundtable. Auditing Standard No. 16 expands on and supersedes existing standards on communications with audit committees (interim standards AU sec. 380, Communication With Audit Committees, and AU sec. 310, Appointment of the Independent Auditor), and makes conforming changes to related standards. The new standard requires SEC approval and, if approved, will apply to audits of public company financial statements for fiscal years beginning on or after December 15, 2012.

Auditing Standard No. 16 is the first standard that the PCAOB has adopted following enactment of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, a new PCAOB standard will not apply to audits of “emerging growth companies” (“EGCs”) unless the SEC determines that the application of the standard is “necessary or appropriate in the public interest, after considering the protection of investors and whether the action will promote efficiency, competition, and capital formation.” At its August 15 meeting, the PCAOB expressed its view that the SEC should approve the application of the new standard to EGCs.

READ MORE »

Page 21 of 63
1 … 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 … 63