Yearly Archives: 2014

Delaware Court: Lack of Fairness Opinion Not Necessarily Constitute Bad Faith

Posted by Allen M. Terrell, Jr., Richards, Layton & Finger, on
Monday, July 7, 2014
, , , , , ,
More from: ,

Allen M. Terrell, Jr. is a director at Richards, Layton & Finger. This post is based on a Richards, Layton & Finger publication, 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.

In Houseman v. Sagerman, C.A. No. 8897-VCG, 2014 WL 1600724 (Del. Ch. Apr. 16, 2014), the Court of Chancery, by Vice Chancellor Glasscock, in addressing defendants’ motion to dismiss claims related to the 2011 acquisition of Universata, Inc. (“Universata”) by HealthPort Technologies, LLC (“HealthPort”), held that the failure to obtain a fairness opinion in connection with the acquisition did not rise to the level of bad faith on the part of the board of directors of Universata (the “Board”) and did not support an aiding and abetting claim against the Board’s financial advisor.

READ MORE »

The Prevalence and Utility of “Roadmap” Decisions in Bankruptcy Mega-Cases

Posted by Kobi Kastiel, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on
Sunday, July 6, 2014
, , ,
More from: , ,

The following post comes to us from Marshall S. Huebner, partner and co-head of the Insolvency and Restructuring Group at Davis Polk & Wardwell LLP, and is based on an article by Mr. Huebner and Elliot Moskowitz that first appeared in Financier Worldwide.

As the pace of Chapter 11 filings jumped in the aftermath of the 2008 financial crisis, bankruptcy courts found their resources increasingly stretched. The number of Chapter 11 “mega-cases”—that is, cases that involve $100m or more in assets, over 1000 entities and/or a high degree of public interest—placed significant strain on the nation’s bankruptcy courts. Many of these cases involve numerous creditors and, given the stakes, litigation that has the potential to drag on for years. Against this backdrop, bankruptcy judges have developed a variety of strategies to foster the efficient resolution of such cases. Mediation is becoming a regular feature of contentious mega-cases, and judges are frequently urging parties to resolve their disputes. Where a compromise is not possible and litigation is unavoidable, judges have increasingly issued “roadmap” decisions that deny relief but provide a specific list of steps that need to be taken or changes to be made that will yield judicial approval. These decisions encourage parties to recalibrate their positions based on the court’s views on the matter, engage in productive negotiations, and quickly come to an agreement on a proposal that the court has already indicated it will approve.

READ MORE »

Republic of Argentina v. NML Capital

Posted by Yaron Nili, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on
Saturday, July 5, 2014
, , , , , ,
More from: , , ,

The following post comes to us from Irwin H. Warren, senior partner in the Securities Litigation practice at Weil, Gotshal & Manges LLP, and is based on a Weil alert authored by Mr. Warren, Ted Posner, and Adam Banks.

The Supreme Court issued its decision yesterday [June 16, 2014] in Republic of Argentina v. NML Capital, No. 12-842, holding that the Foreign Sovereign Immunities Act (FSIA) does not limit the scope of discovery available to a judgment creditor in post-judgment execution proceedings against a foreign sovereign.

As part of NML’s efforts to collect on various litigation judgments entered against Argentina following its default on bond obligations, NML sought discovery of Argentina’s assets around the world in an attempt to locate Argentine property that might be subject to attachment and execution. Those efforts included subpoenas served on Bank of America and Banco de la Nacion Argentina, both of which had offices in New York. The subpoenas generally sought information about Argentina’s accounts, balances, transaction histories and funds transfers. Argentina and the banks sought to quash the subpoenas, contending that they violated the FSIA by seeking discovery of Argentina’s extraterritorial assets that were beyond the reach of U.S. courts. The district court denied the motion to quash, and the Second Circuit affirmed. Only Argentina sought review in the Supreme Court.

READ MORE »

SEC Staff Releases Guidance Regarding Proxy Advisory Firms

Posted by Amy Goodman, Gibson, Dunn & Crutcher LLP, on
Thursday, July 3, 2014
, , , ,
More from: ,

Amy Goodman is a partner and co-chair of the Securities Regulation and Corporate Governance practice group at Gibson, Dunn & Crutcher LLP. The following post is based on a Gibson Dunn alert.

On June 30, 2014, the staff of the Securities and Exchange Commission’s (the “Commission”) Division of Investment Management and Division of Corporation Finance (the “Staff”) issued much-anticipated guidance regarding proxy advisory firms, in the form of 13 Questions and Answers. Published in Staff Legal Bulletin No. 20 (“SLB 20”), available at http://www.sec.gov/interps/legal/cfslb20.htm, the Staff’s guidance addresses both (1) investment advisers’ responsibilities in voting client proxies and retaining proxy advisory firms (Questions 1-5), and (2) the availability and requirements of two exemptions to the proxy rules often relied upon by proxy advisory firms (Questions 6-13).

READ MORE »

Pre-Flight Checklist: 2014 Update

Posted by Eric Geringswald, Corporation Service Company, on
Thursday, July 3, 2014
, , , , , , , , ,
More from: ,

Eric Geringswald is Director of CSC® Publishing at Corporation Service Company. This post is an excerpt from the 2014 Edition of The Directors’ Handbook, by Thomas J. Dougherty of Skadden, Arps.

In this year’s Foreword, Dougherty differentiates the need for directors to focus on their core mission of informed oversight and vigilance rather than merely reacting to the constant influx of “daily corporate governance commentary,” and explores other front-burner issues, such as the marked increase in SEC enforcement actions and other recent SEC initiatives; the continuing trend of class action suits as de facto settlement instruments; proxy advisory firm priorities for directors; and new guidance from the Public Company Accounting Oversight Board (PCAOB) that recommends that audit committee directors discuss internal auditing deficiencies with their auditors.

READ MORE »

Understanding Corporate Governance Through Learning Models of Managerial Competence

Posted by R. Christopher Small, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on
Thursday, July 3, 2014
, , , ,
More from: ,

The following post comes to us from Benjamin Hermalin, Professor of Finance at the University of California, Berkeley; and Michael Weisbach, Professor of Finance at Ohio State University.

The central focus of research in corporate governance has historically been on the problems of controlling managers’ actions. Without minimizing the real-world importance of such control problems, in our paper, Understanding Corporate Governance Through Learning Models of Managerial Competence, which was recently made publicly available on SSRN, we argue that such a focus is incomplete and ignores important factors affecting corporate governance. In particular, it overlooks the crucial element of career concerns: managers care about the inferences that current and future employers draw over time about their abilities from observing their performance.

READ MORE »

Shareholder Proposal Developments During the 2014 Proxy Season

Posted by Amy Goodman & John Olson, Gibson, Dunn & Crutcher LLP, on
Wednesday, July 2, 2014
, , , , , , , ,
More from: , ,

Amy Goodman is a partner and co-chair of the Securities Regulation and Corporate Governance practice group at Gibson, Dunn & Crutcher LLP and John Olson is a founding partner of Gibson, Dunn & Crutcher’s Washington, D.C. office and a visiting professor at the Georgetown Law Center. The following post is based on a Gibson Dunn alert; the complete publication, including footnotes, is available here.

This post provides an overview of shareholder proposals submitted to public companies during the 2014 proxy season, including statistics, notable decisions from the staff (the “Staff”) of the Securities and Exchange Commission (the “SEC”) on no-action requests and information about litigation regarding shareholder proposals.

READ MORE »

Financial Dependence and Innovation

Posted by R. Christopher Small, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on
Wednesday, July 2, 2014
, , , , , ,
More from: ,

The following post comes to us from Viral Acharya, Professor of Finance at NYU, and Zhaoxia Xu of the Department of Finance and Risk Engineering at NYU.

While innovation is crucial for businesses to gain strategic advantage over competitors, financing innovation tends to be difficult because of uncertainty and information asymmetry associated with innovative activities (Hall and Lerner (2010)). Firms with innovative opportunities often lack capital. Stock markets can provide various benefits as a source of external capital by reducing asymmetric information, lowering the cost of capital, as well as enabling innovation in firms (Rajan (2012)). Given the increasing dependence of young firms on public equity to finance their R&D (Brown et al. (2009)), understanding the relation between innovation and a firm’s financial dependence is a vital but under-explored research question. In our paper, Financial Dependence and Innovation: The Case of Public versus Private Firms, which was recently made publicly available on SSRN, we fill this gap in the literature by investigating how innovation depends on the access to stock market financing and the need for external capital.

READ MORE »

Evaluating Pension Fund Investments Through The Lens Of Good Corporate Governance

Posted by Luis A. Aguilar, Commissioner, U.S. Securities and Exchange Commission, on
Tuesday, July 1, 2014
, , , , , , , , , ,
More from: ,

Luis A. Aguilar is a Commissioner at the U.S. Securities and Exchange Commission. This post is based on Commissioner Aguilar’s remarks at the recent Latinos on Fast Track (LOFT) Investors Forum; the full text, 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.

I understand today’s participants include a number of trustees and asset managers for some of the country’s largest public and private pension funds. Without a doubt, pension funds play an important role in our capital markets and the global economy. This is due, in part, to the fast growth in pension fund assets, both in the public and private sectors.

For example, since 1993, total public pension fund assets have grown from about $1.3 trillion to over $4.3 trillion in 2011. Over that same period, total private pension fund assets more than doubled from roughly $2.3 trillion to over $6.3 trillion by 2011. As of December 2013, total pension assets have reached more than $18 trillion. This growth was fueled by many factors, including the rise in government support of retirement benefits, and the increased use by companies of pension plans as a way to supplement wages.

READ MORE »

Agency Problems of Corporate Philanthropy

Posted by R. Christopher Small, Co-editor, HLS Forum on Corporate Governance and Financial Regulation, on
Tuesday, July 1, 2014
, , , ,
More from: ,

The following post comes to us from Ronald Masulis, Professor of Finance at the Australian School of Business, and Syed Reza of the Finance Area at Queensland University of Technology.

While corporate charitable contributions are frequent and often substantial, there is no clear evidence in the literature on whether these expenditures have positive effects on firm revenues or performance or on shareholder wealth. In our paper, Agency Problems of Corporate Philanthropy, which was recently accepted at the Review of Financial Studies, we use contributions of American Fortune 500 firms during 1997-2006 and find in a variety of tests that corporate donations advance CEO interests and suggest that misuses of corporate resources that reduce firm value.

READ MORE »

Page 29 of 61
1 … 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 … 61