M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

A Member of the Law Professor Blogs Network

Wednesday, February 19, 2014

Annual Destefano Lecture

Mark your calendars.  If you are going to be in NYC in early March, swing by Fordham Law for a talk by former Chief Justice Myron Steele of the Delaware Supreme Court.  Information for the talk is below: 

Steele invite

-bjmq

February 19, 2014 | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 18, 2014

Comcast merger raises questions, but any answers?

 It's no surprise that the proposed Comcast-TWC merger raises questions about consolidation in the cable business.   But it's hard to say that there are any simple answers.  The issues that are raising some of the loudest concerns stem from the fact that this merger will be a merger of number 1 and number 2 in a business where there are only really 5 significant players left.  In all seriousness, questions about the consolidation of the cable business and that issue left the station years ago.  A couple of decades ago there were hundreds of cable businesses in the country.  Through subscriber swaps and consolidation smaller systems we have seen the sector get more and more consolidated over time.  

That's not likely going to change anytime soon, if ever.  Ideally, consumers would benefit from increased competition for the last mile.  We're not going to get that from this transaction.  In fact, to the extent there was marginal competition for franchises along the edges of the consolidated territory, that competition is going away.   The potential for competition for the last mile is really muted.  Verizon has largely given up any hopes of expanding its current base.  Satellite is a poor second choice, really ideally suited for the hard to serve rural areas that cable systems aren't really interested in.   Overbuilders?  They exist, but they are will forever be, niche players. 

So, if consolidation is the way things are going to be, why not more regulation of this natural monopoly?  Perhaps regulation of natural monopolies is out of fashion.  That's unfortunate.  Consoldidation without regulation may be responsible in part for why we pay so much for the service we have.  

 Other issues that get raised by this particular transaction is the tendancy of the cable providers to consolidate vertically as well as horizontally.  As consolidated cable moves up the chain to control content as well as the pipes there are serious questions about access that are raised.  The deal Comcast reached with the government when it purchased NBC Universal last year to treat content fairly is good, but the cable providers still face the economic incentives to shift content whenver they can to their favored providers.  

In any event, perhaps Leo Hindery is correct and that when asked, this transaction will sail through the regulatory process.  Perhaps.  But there are more questions than easy answers with this transaction. 

 -bjmq

Update: Felix Salmon thinks broadband access in the US blows...and is expensive to boot.

 

February 18, 2014 in Antitrust, Miscellaneous Regulatory Clearances | Permalink | Comments (0) | TrackBack (0)

Monday, February 17, 2014

Experiential Learning Survey for Transactional Law

A note below from colleagues at UC Berkeley School of Law who are thinking about the proper role of "experiential learning" in the business law setting.  Your insight would be extremely helpful. Participate if you can.
 
To: Practitioners and Educators in Transactional/Business Law
From: Berkeley Center for Law, Business and the Economy (BCLBE)
                        UC Berkeley School of Law
Re: Assessing skills/competencies for transactional attorneys
Date: 14 Feb. 2014


We write to ask two small (but important) favors of you that are directly related to law schools' pedagogical mission as well as the rapidly changing future of legal education.

As you may know, an ABA task force has recently proposed to establish minimum requirements within ABA-accredited law schools for "experiential" learning related to building practical skills and competencies. (Similar proposals are percolating up from state bar association task forces as well.)  We believe this endeavor to be an intriguing and important invitation for law schools to re-imagine how they deliver legal education, and on this basis we are generally supportive.  At the same time, a challenging question that the ABA and other task forces face is the question of what topics constitute "skills and competencies." Within business law, this challenge is perhaps greatest for attorneys whose practice is principally "transactional" in nature (in contrast to work that is oriented around litigation).  It is unclear how much input transactionally-oriented business law practitioners (attorneys, other professionals, educators) have had on the process of drafting the proposed guidelines, or whether there has been much systematic analysis of what topics constitute important "skills" for entering transactional attorneys. 

To address these gaps, we have developed an on-line survey instrument to help gauge what sorts of core competencies established professionals in transactional practice areas consider important.  We hope the results of the survey will help both practitioners and legal educators assess (and if necessary, work to amend) the current proposed guidelines.  Although largely directed to practicing attorneys, the survey is also open to other professionals who work closely with practicing attorneys in transactional practices (such as bankers, accountants, financial advisers, etc.).  

Here are the two favors we ask of you:
 
(1) Please take a few moments yourself to fill out the survey.  It will not take longer than 5-10 minutes of your time.
(2) Please ask your colleagues, partners, associates, co-workers, and other professional contacts to consider filling out the survey. 
 
The more input we can get from experts in the area the better advice we'll both receive and be able to give.

The survey is available on-line, at

            https://www.surveymonkey.com/s/K6HQFR7

When complete, results of the survey will be made available on the website for the Berkeley Center for Law, Business and the Economy (BCLBE), at http://www.law.berkeley.edu/bclbe.htm.
 
Many thanks for considering this - we very much appreciate it.
 
Eric Talley
Faculty Co-Director, Berkeley Center for Law, Business and the Economy
UC Berkeley
 
-bjmq

February 17, 2014 | Permalink | Comments (0) | TrackBack (0)

Thursday, February 13, 2014

Bouchard a shoe-in for Chancellor?

Delaware Law Weekly (reg requ'd) is reporting that Andre Bouchard may be the only applicant for the job of Chancellor, notwithstanding speculation that Vice Chancellor Laster, Judge Jan Jurden and Young, Conway's David McBride are likely applicants.  

Last month, Bouchard resigned his position as chair of Delaware's Judicial Nominating Committee.  

-bjmq

February 13, 2014 | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 12, 2014

MW - JOSB deal withering on vine

Since Men's Wearhouse announced its tender offer for Joseph A. Bank, that deal -- for a while a deal that seemed like it would be a lot of fun to watch play out -- has basically fallen off the radar.   Increasingly, it's looking like it might not happen afterall.  Men's Wearhouse will probably be okay with that outcome, as will a now cowed JOSB board who stirred this whole hornet's next to begin with. 

Why don't I think it's going to happen? Three things.  First, Men's Wearhouse has already announced that it has no plans to extend the tender offer beyond the March 28 date.   So, the tender offer gets done between now and then or it doesn't happen at all. 

Second, according to a letter from JOSB to MW, the FTC has issued a second request.  In th eHSR premerger notification process, the second request is a big deal and can be a deal stopper -- or at least tie the parties down for a long time as they work out the antitrust concerns of the federal government.  In this case, you can imagine that in their initial HSR filing that JOSB filled it with as much evidence of the anticompetitive effects of the transaction as possible -- remember this is a trasnaction that JOSB initially wanted and extolled.  Now, that they are on the sell side, well, suddenly it doesn't look so good ... for consumers!  

No doubt that the second request will drag this deal well past March 28.  Unless Men's Wearhouse extends its tender offer, the transaction may just be dieing a slow death.

Couple with both of those news that JOSB looking for a deal with Eddie Bauer.  It's not a white knight strategy by any stretch. What they appear to be doing is setting up a Time defense to any potential litigation -- 'we are pursuing our own strategy, no need for us to deviate from it to let you acquire us.'  Sure.  Given the recent history of this transaction, I suppose you can say that with a straight face if you practice long enough.

-bjmq

 

February 12, 2014 | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 11, 2014

Charter prepares for a proxy fight

So, rumors are flying that Charter will nominate its own slate for the Time Warner Cable board today.  This is all part of the ongoing effort by Charter to get the board of Time Warner Cable to the table to negotiate a sale of the corporation.  So far, TWC has said no and sat on its hands, as it's permitted to do.  There is no legal requirement that a fully informed board must depart from its corporate strategy to accept  an unsolicited offer, especially if the board believes it to be unwise. 

TWC hasn't followed the Airgas 'just say no' route - adopt a poison pill and rely on its staggered board to hold off an unwanted suitor.  It hasn't done this so far because frankly it can't.  TWC doesn't have a staggered board.  Its board is up for election every year.    Because TWC can't rely on a staggered board to give it the time to defeat a proposal by Charter, it's vulnerable to a proxy fight.  And without a staggered board, the poison pill isn't much of a defense.

And so no surprise that Charter's next move is the proxy contest.  Charter is seeking to replace TWC's entire board through a proxy contest.  If Charter were to win the contest, that would be a signal from TWC shareholders that they are in favor of a deal with Charter at $132.50.   The new board would face no obstacle to quickly getting a friendly deal done.  Of course, it's a long road between here and there.  Lots of things can happen.

Some have said, well it's possible that shareholders vote out the incumbent board and the new board comes in and does an "Airgas" - that is, the new board decides not to pursue a deal with Charter.  I find that scenario highly unlikely.  Why?  Well, when the short slate of three Air Products nominated directors entered the Airgas board room, the remaining board members were there and able to frame the questions and make all sorts of arguments why the Air Products offer was a bad idea for Airgas.  Those arguments ultimately won the day when the Air Products nominated directors sided with incumbent board members.  

If Charter were to succeed in its proxy contest, the board room atmosphere post-contest would be wholly different.  First, the entire board would be brand new.  There will be no one around the frame questions or argue against a Charter bid.   If Charter learned anything from Airgas, it's probably that they have thoroughly quizzed their nominees and they are convinced that all of them think the acquisition of TWC by Charter is a good idea already.   That's not to say as directors they won't seek to informed themselves before doing a deal, but where you starts affects where you end.

All this being said, I'm confident that Charter would be happier if the effect of the proxy contest were to force the incumbent board to the table to negotiate a friendly deal.

-bjmq

February 11, 2014 in Hostiles, Proxy | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 4, 2014

Chevron seeks to certify question

So, you'll remember the Boilermakers case in which the validity of Chevron and FedEx's forum provision bylaws were challenged in the Delaware Chancery Court.  In that case, Chancellor Strine was asked to rule on the facial validity of the forum selection provisions in the bylaws of both Chevron and FedEx.  The case was important because in Galaviz v Berg, a federal court in California had ruled invalid a forum provision bylaw that was adopted unilaterally by the board after the challenged act occurred.  Although Boilermakers drew a lot of attention - from me as well - I think there was very little doubt by most observers that when asked a Delaware court would say that such a provision was facially valid.  Strine did not disappoint (Boilermakers opinion).  

However, Chancellor Strine was restrained and made it clear that although such a provision was facially valid, he would leave it to other courts - in other jurisdictions - to consider as applied challenges to these provisions.  He also encouraged the parties to bring an appeal so that the Delaware Supreme Court could weigh in on the issue. Although the plaintiffs initially sought an appeal of the Chancellor's ruling, they later voluntarily dismissed it, perhaps believing that a little ambiguity might help them later in other cases.

The issue has now shifted to the West Coast.  There is parallel litigation in front of Judge Tigar in the Norther District of California.  In that litigation, plaintiffs are - among other things - challenging whether the forum selection provision is proper.  Chevron is now moving for the appellate review that Boilermakers avoided in Delaware -- apparently seeing blood, counsel wants to stamp on this victory and get the conclusive word  on the question of the facial validity of forum selection bylaws.  

Chevron has now asked the Calfornia to certify a question to the Delaware Supreme Court on the validity of the forum selection bylaws (Chevron Certified Question Motion).

Delaware is one of the very few states that will entertain certified questions.  They do this because they believe it is important for their franchise for the Supreme Court to always be available to provide definitive guidance on novel corporate law questions as they arise.  In this case, Chevron is asking for Judge Tigar to certify the question of validity of the provision to Delaware.  If Delaware affirms the facial validity of the provision, which I suspect they would, then that would effectively end that challenge.

So, if Judge Tigar certifies this question, the whole show will move back to Dover.  We'll see.

-bjmq

 

February 4, 2014 in Delaware | Permalink | Comments (0) | TrackBack (0)

Thursday, January 30, 2014

Cold water on wireless deals

According to the NYTimes, William Baer threw cold water on the prospects of a wireless merger between Sprint and T-Mobile:

“It’s going to be hard for someone to make a persuasive case that reducing four firms to three is actually going to improve competition for the benefit of American consumers,” he said, without referring to any specific merger proposal. “Any proposed transaction would get a very hard look from the antitrust division.”

Ditto for any potential Charter-Time Warner Cable deal.  In the current environment, getting either of those deals past antitrust authorities will be a long, hard pull. 

-bjmq

January 30, 2014 in Antitrust | Permalink | Comments (0) | TrackBack (0)

Strine confirmed

Yesterday afternoon following a 30 minute confirmation hearing, the Delaware Senate unanimously confirmed Chancellor Leo Strine as the next Chief Justice of the Delaware Supreme Court.  That's a marked difference from Strine's initial appointment to the Chancery Court, which was quite controversial at the time.  Yesterday's event was a much smoother affair, according to Reuters:

The outspoken head of the state's nationally important business court was confirmed unanimously as the chief justice of Delaware's Supreme Court on Wednesday after breezing through legislative approval.

Leo Strine was confirmed by a 20-0 vote in the state Senate's Executive Committee. He said he expected to be sworn in as chief justice in the coming weeks.

DelawareOnline noted that the confirmation - quick as it was - touched on non-corporate subjects, too: 

Strine spoke about a number of issues in his confirmation hearing in committee, saying at one point that Delaware policymakers must discuss ways to reduce the state’s levels of incarceration.

“We cannot continue to have the increases in percentage of our population that’s incarcerated as an answer. That cannot be the long-term answer for our society,” Strine said. “It’s a very complex thing. No one has an easy solution. But the idea that we can continue to incarcerate more and more of our population without having an adverse effect on economic growth and even our feelings about ourselves as a community isn’t realistic.”

OK, so that's that.  Next up ... nominating a replacement for Strine on the Chancery Court.  

-bjmq

January 30, 2014 in Delaware | Permalink | Comments (0) | TrackBack (0)

Wednesday, January 29, 2014

Get to know a jurist: Laster

The Litigation Insider (reg req'd) offers a rare interview of Vice Chancellor Laster.  It's worth a read.  He comments on the Chancery Court's ability to act swiftly (ahem...Chancery Arbitration supporters should pay attention to the answer there), the amount of attention the work of the Chancery now gets, as well as things he has learned over the past five years or so:

Q: Five years later, what have you learned the most as a judge? What do you wish you had known then that you know today?

A: Five years later, I am more sympathetic to small firm attorneys and solo practitioners than I was when I arrived on the court. I had the good fortune to learn the practice of law at Richards, Layton & Finger, one of Delaware’s largest and best-known firms. We litigated primarily against other large firms who had the resources to do things well. Even when I started my own small firm, we worked on cases with and against big firm lawyers, and we maintained high standards. Having been on the bench, I have now seen the wide range of resources that parties can bring to cases. It is not always possible for a small firm lawyer or solo practitioner to devote the resources to a case that a large firm could with a well-heeled client. I would like to be able to send myself an inter-temporal memo with that information. I would also give myself a heads up about the decisions where I’ve been reversed so I could try to get them right.

Ditto that thought about the inter-temporal memo.  How do I get one of those?

-bjmq 

January 29, 2014 in Delaware | Permalink | Comments (0) | TrackBack (0)

Monday, January 27, 2014

Unscrambling eggs

Two recent cases provide examples of the Obama administration's aggressive antitrust policy.  Unlike the previous administration, almost from day one the Obama administration has been more likely to pursue transactions post-closing for antitrust violations.  In the first of the two, the FTC won a victory in a Federal Court in the district of Idaho:

Idaho's largest hospital chain and physician group must unwind their merger, a federal judge ruled, siding with U.S. regulators seeking to broaden antitrust enforcement in health-care acquisitions.

The combination of St. Luke’s Health System Ltd. and the Saltzer Medical Group would raise prices for consumers even though it would improve patient care, U.S. District Judge B. Lynn Winmill in Boise, Idaho said today, ruling in a pair of cases brought by the Federal Trade Commission and local hospitals.

In the second case, the DOJ was able to work out a settlement with Heraeus Electro-Nite LLC that will require it to divest itself of certain assets it acquired from Midwest Instrument Company.   Both companies  manufactured measurement technologies critical in steel manufacturing.

In both cases the transactions giving rise to the government's antitrust investigations were below the HSR filing thresholds, so pre-closing merger clearance was not required.  But, as we are learning, just because your deal may not trigger filing requirements, it doesn't mean that the government won't seek divestiture remedies, including "unscrambling the eggs" in the event the government believes the transaction is anticompetitive. 

-bjmq

January 27, 2014 in Antitrust | Permalink | Comments (0) | TrackBack (0)

Saturday, January 25, 2014

Net neutrality is dead

 Prof. Colbert speaks out against the attack on net neutrality and ... well ... he makes is his point.

The Colbert Report
Get More: Colbert Report Full Episodes,Video Archive

-bjmq

January 25, 2014 | Permalink | Comments (0) | TrackBack (0)

Friday, January 24, 2014

Dwindling Revlon

Lyman Johnson and his co-authors have a paper, The Dwindling of Revlon, appear in the W&L Law Review.  Here's the abstract:

This article traces the dramatic dwindling of the iconic Revlon doctrine. Over the past several years, we observe a paradox in M&A litigation. The number of challenges to “done deal” transactions has skyrocketed, but the number of successful Revlon claims - those procuring a remedy - has plummeted. Having set out to suggest, as a theory and policy matter, that Revlon might be extended into the attempted but failed “no deal” context, we conclude, ironically, that today there is little remedial clout to the Revlon doctrine in any setting.

The overly exalted place of Revlon in the law thought to govern M&A deals endures because it is regarded in narrow, silo-like doctrinal isolation even though it can only be understood as one part of a legal landscape that has dramatically changed since 1986. Revlon, for example, no longer sets the standard in damages cases. Thus, oft-cited statements from the QVC case regarding enhanced substantive scrutiny by courts, and the planning of an initial burden of proof on directors, are outmoded doctrinal vestiges in the personal liability context. As to injunctive relief, only one injunction - out of numerous claims - was granted on a Revlon theory in the six year period from 2008-2013.

By adopting a remedies perspective on Revlon, we thus see that the ongoing debate over what “triggers” Revlon in mixed consideration deals is a debate with small stakes: only pre-closing relief is up for grabs anyway, and that is rarely granted. We should stop regarding Revlon as a robust standalone doctrine. Delaware courts should go further, however. They should renounce Revlon’s faulty focus on short-term value maximization. Then, the corporate objective in the sale setting - of whatever kind - would be the same as it is (and should be) outside the sale setting: to pursue the best option for achieving long-term value.

-bjmq

January 24, 2014 | Permalink | Comments (0) | TrackBack (0)

Thursday, January 23, 2014

Counting noses on SCOTUS

OK, so I don't think the odds of SCOTUS taking the Delaware arbitration appeal are high -- there isn't an obvious circuit split of the type that generally attracts the court's attention.  That said, it's possible that the court might take the case because they want to make more statements about the value of arbitration.  

With that in mind, this little colloquy from EBIA v Arkison which was before the court earlier this month is interesting - if for no other reason that it allows us to do the most ridiculously vain thing ever: count potential votes on the court.  

The issue for the court in EBIA was whether - with the consent of the parties - a Federal bankruptcy judge could enter a final judgment on a fraudulent conveyance claim rather than hear the claim and then make a recommendation for review by a Federal district court.

So, not directly on point, but close enough for this to play out (via Oyez):

Justice Elena Kagan: --Mr. Gannon, could you say a word about the relevance of arbitration here?

Because I've been trying to figure out, if there's an Article 3 problem irrespective of consent when Congress adopts some kind of scheme for alternative adjudication, why schemes of mediation and arbitration wouldn't similarly be constitutionally problematic.

Curtis E Gannon: I -- obviously, we don't think that -- that these schemes here in the bankruptcy judge context and the magistrate judge context, which are -- which are hedged around with lots of procedural protections and statutory protections, rise to that level.

But I do think that a principal difference, if the Court were looking to distinguish arbitration from these types of concerns, is that the arbitration is more purely private.

Although there's statutory authorization, the arbitrators are generally not Federal employees.

Bankruptcy judges, by contrast, are actually units of the district courts.

They are within Article 3.

They are--

Justice Elena Kagan: Yes, but that would suggest that arbitration is more constitutionally problematic because it -- it extends -- you know, it goes -- it's further away from the supervisory authority of the district court.

Curtis E Gannon: --I'm -- I'm loathe to say that it's further away because I think that there may be a separation of powers distinction between--

Chief Justice John G. Roberts: Arbitration is a matter of contract between two parties.

Nothing happens in an arbitration until you get a district court to enter a judgment enforcing the contract.

It seems to me totally different from the situation we're talking about here.

Curtis E Gannon: --Well, I do--

Justice Elena Kagan: A matter of contract versus a matter of consent?

Like I said, you understand the difference.

Chief Justice John G. Roberts: But you -- I'm posing a question to you, I guess.

[Laughter]

Courts enforce contracts all the time.

They don't enter judgments beyond their Article 3 authority simply because the two parties before them agree that they should.

Curtis E Gannon: --That's true, Mr. Chief Justice.

OK, so one for.  And maybe one against?

-bjmq

January 23, 2014 in Delaware | Permalink | Comments (0) | TrackBack (0)

CFIUS and China

An announcement today that Lenovo has agreed to acquire the low-power server business of IBM reminds me that CFIUS just relased its Annual Report for 2012.  OK, it's 2014!  But remember, CFIUS is an ad-hoc committee without even a building in DC.  We can give them a break for being a little slow on the reporting side.

The big news from this most recent report is that China is moving on up to the big time.  Previously, the countries with the largest number of CFIUS filings were France and the UK.  Now, they have been replaced by Chinese filings.  Of course, the total number of transactions covered under the CFIUS regime remains small, but as the Lenovo/IBM deal suggests, these deals are in potentially critical technology areas.

CFISU-Country

-bjmq

January 23, 2014 in Asia, Cross-Border, Miscellaneous Regulatory Clearances | Permalink | Comments (0) | TrackBack (0)

Wednesday, January 22, 2014

DE arbitration seeks SCOTUS review

So, last night Delaware filed a cert petition with the US Supreme Court asking the court to overturn the Third Circuit's ruling with respect to Delaware Chancery arbitration program.  I've written about this before (here and even a law review article here).  In any event, I'm on record that I believe Chancery arbitration is a bad idea that over the long-term will undermine Delaware's corporate law franchise. In any event, when challenged at the District Court, that court found that confidential Chancery arbitration violated the First Amendment's qualified right of access (District Court Opinion).  In a 2-1 opinion on appeal, a panel of the Third Circuit agreed with the District Court (Third Circuit Opinion).  In that opinion, the majority appears to have read my law review piece - no need to cite me, I'm not proud.  In any event, the majority mimics many of the same arguments that I previously argued about the relative merits of the Chancery arbitration program.  

Now, Delaware would like the Supreme Court to weigh in. Here's the petition for certiorari (h/t KWC and The Chancery Daily).

Petitioners make a couple of policy arguments for why it's important why the Chancery arbitration procedure must survive.  It's a matter of national competitiveness, otherwise parties will incorporate overseas and take their disputes overseas, too.  That's a pretty dubious argument.  There is no evidence that any Delaware firm.  I looked at a pile of merger agreements to check to see if there was anything to this argument.  Prior to adoption of the Chancery arbitration procedure, only a handful of mergers relied on anything other than the public courts to resolve disputes between the parties.  There is no evidence that anyone contracted to resolve merger related disputes through international arbitration.  It's just not an issue.  There is no real competitive challenge to the position of the courts with respect to merger litigation at this point.  In rushing to adopt the Chancery arbitration procedure, Delaware is fighting with ghosts.

The second argument for why preservation of the Chancery arbitration procedure is so important is a familiar argument about how the US courts are so inefficient that delayed justice will push parties to seek international arbitration rather than dispute resolution in the US.  Gee, I guess, maybe, but are the Delaware courts arguing that the Delaware courts are so inefficient that the inefficiency of the Delaware courts is pushing Delaware corporations overseas?  Really. Please.  No.  

A third argument -- and this one is tied to the question of confidentiality of arbitration procedure - is that if the court were to uphold the qualified First Amendment right of access the procedure would fall into disuse and that confidentiality is central to the success of the procedure.  Confidentiality is the only real benefit to arbitration?  

Well, honestly, I don't understand how that ties into the argument that the reason why parties are supposedly leaving Delaware is because of the inefficiency of the public courts.  Frankly, it doesn't.  It shifts the goal posts and makes confidentiality the central contribution of the arbitration procedure.  To that I say hogwash. 

OK, if the public courts had proven themselves incapable of protecting trade secrets and other commercially sensitive information, I might listen.  But, under the Chancery Court' s rule 5.1, parties can seek confidential treatment for sensitive materials.   Does Delaware think that its own rules for confidential treatment are inadequate?  I don't think so.   Anyway, to the extent arbitral confidentiality extend beyond areas that 5.1 typically will protect, then why does anyone in a policy position believe that keeping those kinds of facts (possibly management breeches of fiduciary duties or other bad acts by managers) from the public?  I strain to see a policy rationale.

In any event, Delaware might get a day in court on this.  I'd be surprised if they do - though as someone recently reminded me if the court wants to make a statement about arbitration (again), this might be a case they will take.

I'll rehash the actual legal arguments in another post later if the case gets picked  up.

-bjmq

January 22, 2014 in Delaware | Permalink | Comments (0) | TrackBack (0)

Friday, January 17, 2014

Bankers' hours

Emma Jacobs at FT has a take on why the recent fashion of limiting junior bankers hours is doomed to fail.  In short it boils down to things:  the nature of the clients and the nature of the people who work for banks.  [By the way, everything I am about to write is equally true for lawyers.]  

First, clients pay big money.  They want service.  And that typically means they will dump an assignment on you in the afternoon/evening and expect to hear from you the next day.  That means you work all night.  Or, they hand it to you on Friday and expect to see it on Monday.  There goes your weekend.  You don't want to do that?  Fine, they'll find someone else.  

That brings me to Jacobs' second point, the people in these kinds of banker and lawyer jobs are all alpha types.  If you tell them not to work too hard, they will work hard just to show you they can.  In these places there is a culture of hard work.  If you take time off, you're a slacker and not up to par.  For example, this is probably true in many, many places.  You greet a co-worker in the morning and you say,"Hey Jim, how are you?"  What does Jim respond? "Fine"? More likely, he says,"Busy!"  Being busy is a sign of value and worth.  You may feel terrible because you have worked two all nighters in the past week, but you are valuable because you are busy.

Anyway, limits on bankers' [lawyers'] hours are doomed to fail.  They all have smartphones and laptops anyway.  They may not be in the office, but they will be busy!

-bjmq

January 17, 2014 in Friday Culture | Permalink | Comments (0) | TrackBack (0)

Wednesday, January 15, 2014

Next up ... filling the Chancery vacancy

The Delaware Law Weekly has surveyed the field of potential replacements for Chancellor Strine once he moves up to the Supreme Court and comes up with four names:

Andre G. Bouchard, a partner with Bouchard Margules & Friedlander and current chairman of the Judicial Nominating Commission, is viewed as a front-runner to replace Strine. Others who have been mentioned as possible candidates include Superior Court Judge Jan R. Jurden, Chancery Court Vice Chancellor J. Travis Laster and Joseph R. Slights III, a former Superior Court judge and current Morris James partner.

Two things worth noting: First, Andre Bouchard is an Eagle (BC, '83) - so, that's good.  Second, if Vice Chancellor Laster were to slide over to the Chancellor's seat, his position of Vice Chancellor would also have to be filled by someone so the nomination merry-go-round would continue for a few more months.  The same rules with respect to non-partisan appointment of judges applies to the Chancery Court as applies to the Supreme Court.

-bjmq

 

January 15, 2014 in Delaware | Permalink | Comments (0) | TrackBack (0)

Monday, January 13, 2014

Delaware columnist weighs in on Strine

A columnist at the News Journal/DelawareOnline weighs in on the Strine nomination:

Gov. Markell has certainly chosen someone whose national reputation gives new cachet to the court. Leo Strine, at age 49, should be able to tackle any challenge his Supreme Court is bound to face.

-bjmq

January 13, 2014 in Delaware | Permalink | Comments (0) | TrackBack (0)

Courts finds BazaarVoice violated Clayton Act

See update below.

Following BazaarVoice's acquisition of PowerReview in June 2012, the DOJ started an antitrust investigation.  The BazaarVoice's acquisiton fell below the HSR size of person/size of transaction test so it wasn't subject to HSR premerger filing requirements.  

Not being required to make HSR filings, of course, is not the same as being exempt from the antitrust laws. Turns out, no one (other than perhaps Major League Baseball) is exempt from the antitrust laws. The BazaarVoice litigation that was decided by a district court judge in San Francisco last week is another example of the Feds looking back at completed transactions for the anticompetitive effects.  Last week in BazaarVoice, the DOJ  was able to secure an order from the court to undo the transaction (BazaarVoice Opinion).  

Though the remedy is extreme, it shouldn't really be a surprise.  Why?  Here's how the folks at BazaarVoice internally described the benefits of the acquisition of PowerReview:

"Eliminate [Bazaarvoice's] primary competitor and provide relief from ... price erosion."

Hmm. Eliminating your primary competitor and stopping price erosion.  Sounds good to the business types, but to deal lawyers that should sound like fingernails on a chalkboard.    But it gets worse...

Collins, then BazaarVoice's CFO suggested that ... BazaarVoice could either compete against PowerReviews and "crush" them, or dammit lets just buy them now"

Buying your primary competior to eliminate competition?  Bad. Turns out when you buy your primary competitor, reduce competition and generate larger margins for yourself as a result, the DOJ takes notice, even if you weren't required to make an HSR filing.  

Following the transaction, the anticompetitive effects of the deal were obvious to the court, and the DOJ got its order to unscramble the eggs.  You can download the District Court's BazaarVoice Opinion here.

-bjmq

 

Update:  OK, so apologies to those involved, the Court has not yet ordered the taking apart of the deal. What it has done is found that BazaarVoice violated Section 7 of the Clayton Act and has ordered the parties back on January 22, 2014 to discuss what remedy is appropriate.  Clearly, unscrambling the eggs is one possible remedy, but there may be others acceptable to the government and BazaarVoice.  Here's BazaarVoice's Press Release related to the court's decision.

 

 

 

January 13, 2014 in Antitrust | Permalink | Comments (0) | TrackBack (0)