M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

Tuesday, July 23, 2019

Consequential Damages and Buyer Power

Here's another in a line of useful cartoons on merger agreement provisions - this time on carveouts for Consequential Damages.  The cartoon also takes the opportunity to describe the "buyer power ratio" recently developed by the ABA Business Law Section and SRS Acquiom. You're likely already familiar with the Deal Points Study that comes out every two years. These studies are generally the gold standard for deal types trying to find out "what's market" with respect to escrows, caps, baskets, and many other moving parts in the merger agreement. The buyer power ratio tries to get a little more granular with its analysis. Basically, if one starts from the position that results of bilateral negotiations are indeterminate, then "what's market" is really just a guess and that being a "good negotiator" (whatever that is) is more important than anything else, hence the salience of the Deal Points studies. They give people an anchor. Buyer Power starts from the proposition that when you have a whale buying a minnow, the whale is likely going to be able to demand better terms. Why? You can guess, the whale is evaluating several possible strategic minnow targets and will select the one that makes sense on the best terms. Unless its a market disrupter, sellers looking for an exit, on average, are going to the need the buyer more often than the buyer needs the particular seller. In any event, the buyer power ratio uses a combination of transaction size and market cap of the buyer to gauge the relative negotiating leverage of the parties. Seen through that lens, what's market looks a little different depending on who is the buyer. 

-bjmq

 

July 23, 2019 | Permalink | Comments (0)

Tuesday, July 16, 2019

Does Revlon Matter?

A star-studded line-up of law profs got together to try to answer this question.  Does Revlon Matter? An Empirical  and Theoretical Study (Cain, Davidoff-Solomon, Griffith, and Jackson) recently posted to SSRN.  Since it came down in 1986, many have tried to make Revlon into more than it was. Revlon was and is a Unocal case, a preliminary inquiry into the question of board motivation in the context of a sale of control. Absent evidence of conflict, courts will grant boards the presumption of business judgment when deciding to sell control (see e.g. QVC).  In any event, Cain et al ask whether notwithstanding Revlon's limited reach if it has an impact  on the way boards negotiate sales of control or structure deals. They conclude it does. 

Abstract: We empirically examine whether and how the doctrine of enhanced judicial scrutiny that emerged from Revlon and its progeny actually affects M&A transactions. Combining hand-coding and machine-learning techniques, we assemble data from the proxy statements of publicly announced mergers over a fifteen year period, 2003-2017, ultimately assembling a dataset of 1,913 unique transactions. Of these, 1,167 transactions are subject to the Revlon standard, and 553 are not. After subjecting this sample to empirical analysis, our results show that Revlon does indeed matter for companies incorporated in Delaware. We find that for Delaware Revlon deals are more intensely negotiated, involve more bidders, and result in higher transaction premiums than non-Revlon deals. However, these results do not hold for target companies incorporated in other jurisdictions that have adopted the Revlon doctrine.

Our results shed light on the implications of the current state of uncertainty surrounding Revlon and provide some direction for courts going forward. We theorize that Revlon is a monitoring standard, the effectiveness of which depends upon the judiciary’s credible commitment to intervene in biased transactions. The precise contours of the doctrine are unimportant provided the judiciary retains a substantive avenue for intervention. Recent Delaware decisions in C&J and Corwin have been criticized for overly restricting Revlon, but we suggest that such concerns are overstated so long as Delaware judges continue to monitor the substance of transactions. Thus, in applying these decisions Delaware judges should focus not on procedural aspects but the substantive component of transactions which Revlon initially sought to regulate.

-bjmq

July 16, 2019 in Delaware, Takeovers | Permalink | Comments (0)

Thursday, June 27, 2019

Griffith on Reps/Warranties Insurance

Here's a new paper by Sean Griffith, Deal Insurance: Representation & Warranty Insurance in M&A Contracting:

Abstract: Efficient contracting depends upon imposing risk on the party with superior access to information. Yet the parties in mergers and acquisitions transactions now commonly use Representation and Warranty Insurance (“RWI”) to shift this risk to a third-party insurer. Because liability and trust go together, RWI would seem to give rise to a credible commitment problem between the transacting parties, and it raises adverse selection and moral hazard problems for the insurer.

This paper examines the emergence of RWI, focusing on three interrelated questions. First, how does RWI affect transactions? Second, why do transacting parties use RWI? And third, why do insurers sell RWI?

The paper follows a two-fold empirical methodology. It develops data both by surveying RWI market participants—insurers, brokers, lawyers, and private equity managers—and also by analyzing a sample of over 400 acquisition agreements, approximately half of which involved RWI.

The results show a broad transfer of mispricing risk from buyers and sellers to insurers. RWI allows sellers to minimize risk at exit and allows buyers to control risk aversion in selecting investments. At the same time, RWI threatens to disrupt the contracting process by introducing problems of credible commitment, moral hazard, and adverse selection. Insurers’ ability to respond to these problems through shifts in the deal market and the underwriting cycle may determine whether RWI ultimately facilitates or impedes mergers and acquisitions.

Reps & Warranties insurance is an interesting innovation in the last decade. Rather than rely on indemnification and/or escrows, private equity sellers, looking for an exit, rely on insurance to give them a clean break from deals when they are exiting through a sale to a third party.  Griffith does a deep dive into the the role of insurance in a sale.

-bjmq

June 27, 2019 | Permalink | Comments (0)

Tuesday, June 25, 2019

Residuals Clauses in NDAs

Another in a series of very helpful cartoons from our friends at the Hogan Lovells M&A team on the use of 'residuals' clauses in nondisclosure agreements. The explanation of how they work here is very clear. Residuals clauses are just one of those things sellers may have to live with.

    

-bjmq

 

Earlier M&A Cartoons here:

June 25, 2019 in Merger Agreements | Permalink | Comments (0)

Wednesday, February 27, 2019

Call for papers: Corporate & Securities Litigation Workshop

Call for papers from the Corp & Securities Litigation Workshop. This has grown into quite an annual scholarly event:

Corporate & Securities Litigation Workshop: Call for Papers

Boston University School of Law, in conjunction with the University of Illinois College of Law, UCLA School of Law, and the University of Richmond School of Law, invites submissions for the Seventh Annual Workshop for Corporate & Securities Litigation. This workshop will be held on Friday, September 27 and Saturday, September 28, 2019 at Boston University School of Law.

Overview

This annual workshop brings together scholars focused on corporate and securities litigation to present their scholarly works. Papers addressing any aspect of corporate and securities litigation or enforcement are eligible, including securities class actions, fiduciary duty litigation, and comparative approaches. We welcome scholars working in a variety of methodologies, as well as both completed papers and works-in-progress.

Authors whose papers are selected will be invited to present their work at a workshop hosted by Boston University.  Hotel costs will be covered.  Participants will pay for their own travel and other expenses.

Submissions

If you are interested in participating, please send the paper you would like to present, or an abstract of the paper, to corpandseclitigation@gmail.com by Friday, May 24, 2019. Please include your name, current position, and contact information in the e-mail accompanying the submission.  Authors of accepted papers will be notified by late June. 

Questions

Any questions concerning the workshop should be directed to the organizers: David Webber (dhwebber@bu.edu), Verity Winship (vwinship@illinois.edu), Jim Park (James.park@law.ucla.edu), and Jessica Erickson (jerickso@richmond.edu).

-bjmq

February 27, 2019 in Litigation | Permalink | Comments (0)

Monday, November 26, 2018

Corwin, not a 'get out of jail free' card

I've seen some hand-wringing among my fellow corporate law scholars that Corwin represents some sort of free pass for bad directors in the context of a sale - a 'get out of jail free' card as it were. Last week before the Thanksgiving holiday, VC Slights gave us a reminder that Corwin may be many things, but it is not that. No 'get out of jail free' cards.

Remember, under Corwin, the Delaware Supreme Court held that "[t]he business judgment rule is invoked as the appropriate standard of review for a post-closing damages action when a merger that is not subject to the entire fairness standard of review has been approved by a fully informed, uncoerced majority of the disinterested stockholders.” 

So, where the litigation involves a challenge to an arm's length sale of the corporation, Corwin is in play, but it requires a fully-informed stockholder vote. In many other situations, including the preliminary injunction phase, courts have shown great deference to the power of an uncoerced, fully-informed stockholder vote to forgive director sins. No difference in the Corwin context. If shareholders know all the facts and accept them by way of an uncoerced 'yes' vote to a deal, courts are loathe to step in and tell shareholders they are wrong. 

That said, there are limits. In Tangoe, the court refused to apply Corwin where the stockholders vote was not fully-informed due to inadequate board disclosures prior to the vote. In Tangoe, the board sought to sell the company following a financial restatement and subsequent delisting by NASDAQ. Shareholders challenged and sought post-closing damages. In refusing the board's motion to dismiss, VC Slights made it clear that getting Corwin protection isn't going to be as easy as all that:

"But, to earn pleading-stage business judgment deference by invoking stockholder approval of a challenged transaction, the directors must demonstrate that they carefully and thoroughly explained all material aspects of the storm to stockholders—how the company sailed into the storm, how the company has been affected by the storm, what alternative courses the company can take to sail out of the storm and the bases for the board’s recommendation that a sale of the company is the best course."

Absent a fully-informed stockholder vote, there is no Corwin protection. And, the burden is going to be on the board to demonstrate that shareholder vote was fully-informed and thus effective. So, fear not. At least for now.

-bjmq 

November 26, 2018 in Cases, Mergers | Permalink | Comments (0)

Monday, November 19, 2018

251(h) mergers, what are they called anyway?

Ever since Delaware adopted §251(h) to deal with the percolating top-up option issue ('you're going to issue how many shares?!'), there has been a small, but nagging issue. What do we call this new kind of merger. Well, lawyers aren't all that creative. The §251 statutory merger is known as a "long-form merger." The §253 statutory merger is known as a "short-form merger." Now, after a few years of market percolation, it seems we have settled on a name for these back-end mergers that clean up the cats-and-dogs following a successful tender offer.

Ladies and gentleman, I introduce you to the §251(h) "medium-form merger."

Meh.

-bjmq 

November 19, 2018 in Tender Offer | Permalink | Comments (0)

Friday, November 16, 2018

Mandatory shareholder arbitration being considered by SEC ... again?

Apparently the whole issue of mandatory arbitration of shareholder disputes has begun to percolate again. The issue is whether the SEC should permit registration statements to go effective with mandatory shareholder arbitration provisions in their corporate charters. This had been percolating for some time as a high priority item for some interest groups, waiting for a Republican administration to push it through. So, here we are, a two years into the Trump Administration and the scuttlebutt is that there is talk of moving forward with this. 

 Commissioner Pierce seems fine with the idea. Commissioner Piwowar is already on the record as good to go with this. Commissioner Clayton (here) and then Commissioner Jackson, on the other hand seem reticent to move away from the status quo (so, no). We'll see where it goes from here, but clearly if this is going to move, now is the time. 

Before things move too quickly, though, just a gentle reminder that under §115 of the Delaware Corporation Law, mandatory arbitration provisions that prevent shareholders from bringing their cases in the Delaware Chancery Court are not permitted to be included in the corporate charter. Section 115 reads as follows:

The certificate of incorporation or the bylaws may require, consistent with applicable jurisdictional requirements, that any or all internal corporate claims shall be brought solely and exclusively in any or all of the courts in this State, and no provision of the certificate of incorporation or the bylaws may prohibit bringing such claims in the courts of this State.  “Internal corporate claims” means claims, including claims in the right of the corporation, (i) that are based upon a violation of a duty by a current or former director or officer or stockholder in such capacity, or (ii) as to which this title confers jurisdiction upon the Court of Chancery. (Emphasis added)

Even if the SEC permits a corporation to go public with such a provision, such a provision would violate state corporate law.

Given that more than 60% of publicly traded companies are incorporated in Delaware, if the SEC were to move forward with permitting mandatory shareholder arbitration, most listed corporations would not be in a position to include such provisions. So, why bother? Indeed, there are lots of good reasons why the SEC shouldn't take a permissive approach towards shareholder arbitration. 

First, I'm no fan of the litigation flotsam that jammed up the courts these past few years. Frankly, the disclosure settlement litigation was mostly just rent seeking in the economic sense. We're all better off without it. However, the creation of law by courts operating in the open is a public good. If shareholder claims were to be moved into arbitration we would lose the value of incremental developments of the law and the value associated with investors as well as managers actually knowing what the law is. All of that becomes a closely held mystery once we move a substantial block of shareholder claim resolution into private arbitration. 

Second, in confidential arbitration bad actors and bad actions go unnoticed. Or, to the extent self-interested managers are successfully sued, there is little prospect for accountability. For example, if a board engages in a self-dealing transaction is sued, then discovery, the trial and then the opinion are all held in confidence - not disclosed via any court filing system and not filed with the SEC, except in the most cursory fashion. That can't be good for "price discovery." Who wants that kind of system? Bad actors. 

So, count me down as a "no" if the SEC is still actively considering this bad idea. 

-bjmq

November 16, 2018 in Corporate, Litigation, Miscellaneous Regulatory Clearances, SEC | Permalink | Comments (0)

Monday, October 22, 2018

Moar MACs Pleez

Ok, so Akorn has attracted a lot of attention - as it should. It's the first ever MAC seen in the wild. Of course, the Chancery opinion is going to get appealed, so it's not the last word on the issue. But for now, there it is and its facts are interesting. At the same time, there is another MAC case percolating in Chancery. You might remember I noted the Channel Medsystems v. Boston Scientific case. I pooh-pooh'ed the claim that an apparent embezzlement of $3 million was not a MAC/MAE under the current understanding of the law. So, is this where I eat crow?  Uh...no. Here's why:

In Channel, the underlying claim is that a Vice President of Quality Assurance embezzled some $3 million from Channel. In order to cover his tracks, he apparently made up/forged receipts for stuff that was never purchased and, importantly, tests that were never conducted. All of this became known after signing of the agreement. In fact, in a surprising coincidence it came to light at basically the same time the problems with Quality Assurance came to light at Akorn. In Akorn, the blame was pinned on the VP for Quality Assurance, just like in Channel. In Akorn, those problems called into question the viability with the FDA of basically all of Akorn's products. In Channel, there is only one product, so that looks the same too. This is starting to look eerily like Akorn Part Deux. OK, Quinn, seems like it's time to eat some crow. Except it's not.

Channel is single product company where the product is still in development. At the time of the deal, getting a good sense of the valuation is hard because the company only has value if the FDA approves the project. That's reflected in the structure of the deal. The deal is basically structured as put/call rather than a typical merger. The transaction has an outside date of Sept 29, 2019. If, before the outside date, the FDA approved Channel's product, then Channel has an option to put the company to Boston Scientific for some $250 million, and Boston Scientific has a reciprocal call option. That's critical.

Boston Scientific is arguing that the embezzlement and the accompanying cover up by the VP has resulted in an MAE and so it's termination of the agreement was proper. Channel is seeking a declaratory judgment that the embezzlement was not an MAE and that the FDA will approve the company's product in the first quarter of 2019.

Let me skip to the chase. If the embezzlement and cover up is material, then one should expect the FDA to refuse to approve the product on schedule and the contracted September 29, 2019 outside will come and go without an approval, and Boston Scientific would not be required to complete the transaction since Channel's put option would not vest. If the embezzlement is not material, then the FDA will approve the product before the outside date and then Channel will put the company to Boston Scientific. In any case, this particular contract has a competent third party ready to do their thing - that is evaluate and determine whether Channel's product should be able to be sold on the market.  Terminating the contract now, claiming there is a MAC, seems premature.

In the claim before the court right now, Boston Scientific's argument looks a lot more like buyer's remorse than it does a MAC. Because if the effect of the embezzlement was really bad, then under the terms of the contract, Boston Scientific will never have to close. If it's not and the product is approved before the outside date, there is no reason for Boston Scientific not to close. 

Anyhow, that's how I see it, buyer's remorse, not a MAC.

-bjmq

October 22, 2018 in Material Adverse Change Clauses | Permalink | Comments (0)

Wednesday, October 10, 2018

A MAC, a MAC!!

Sorry, catching up. It's a 247 page opinion for Chrissakes! It takes a guy some time to read that and the footnotes! What?! 800 plus footnotes?  What are we doing here? Anyway, as this case is no doubt going up for appeal, the Chancery opinion is not going to be the last word on this. Nevertheless, here we go.

So, for those of you not paying attention, in Akorn v. Fresenius Vice Chancellor Laster found - for the first time - that a buyer properly terminated a merger agreement after finding that a seller had breached a representation and that a material adverse effect had occurred. There are a couple of things, I think, worth thinking about at least initially.

First, it's pretty clear that early on the seller, Akorn, was running into market headwinds. The business did not perform nearly as well as it had previously due to the entrance of new competitors in the generics business. This poor performance caused Fresenius to worry and to experience some "buyer's remorse." You'll remember from IBP v Tyson and other cases, buyer's remorse is never going to be enough to cause a MAC.  Nevertheless, seeing the poor performance, Fresenius sought opinion of counsel whether that might be sufficient cause for them to walk away from the deal. Correctly, in my view, NY counsel told them, "No." They were in the business for all its ups and downs and the fact that others entered the market causing Akorn to suffer was not going to be the kind of thing that could permit Fresenius to walk away. 

Then, a fraud was uncovered. An anonymous letter revealed that, basically, all of Akorn's quality assurance programs were basically a fraud. This is a whole different kettle of fish. The effect of having basically faked its quality assurance programs meant that all of the data sent to the FDA were unreliable and that approvals granted to Akorn's drugs and pipeline are now in jeopardy of being pulled. "How about now?", asked Fresenius of its outside counsel. Well, if you are buying a drug company that, post-signing, reveals that it lied to the FDA and that its drugs are no longer going to be marketable for a, what's the word?, a yes, "durationally significant" period of time, that starts to look like what a MAC should look like. A first for Delaware. 

Actually, if the facts as outlined in this opinion aren't a MAC, then you'll never find one. This shouldn't even be close. I'm sure there's a line to be crossed - this is a MAC and this isn't - and if there is, these facts are well over that line.

In any event, I don't want to spend too much time on it. It's going to get appealed and the Delaware Supremes are going to want to have the last word on what a MAC looks like. Thankfully, they constrain themselves to opinions under 40 pages.

-bjmq

 

October 10, 2018 in Material Adverse Change Clauses | Permalink | Comments (0)

What does ab initio mean anyway?

Since Kahn v. M&F Worldwide there have been a series of challenges to the application of the business judgment presumption in the context of controller squeezeout transactions. The crux of these challenges was M&F's ab initio requirement.

You'll remember that in M&F, the court tried to iron out the problems associated with the Kahn v. Lynch standard that were essentially flypaper for litigation in controller squeezeout transactions. It didn't matter how good a job you might have done in structuring a transaction to look like an arm's length deal, under Lynch your deal was still going to be subject to entire fairness review and you were going to get sued. Although entire fairness was the standard of review for a controller squeezeout with robust procedural protections (approval by disinterested special committee or stockholders), Lynch shifted the pleading burden to plaintiffs rather than the board. That was a mistake by the Del. Supreme Court. Rather than reward boards and give controllers an incentive to do the right thing, shifting the burden of proving entire fairness to plaintiffs simply ensured plaintiffs would sue and demand their day in court - guaranteeing that even meritless litigation had settlement value.

M&F sought to address this problem adopting the following standard:

[B]usiness judgment is the standard of review that should govern mergers between a controlling stockholder and its corporate subsidiary, where the merger is conditioned ab initio upon both the approval of an independent, adequately-empowered Special Committee that fulfills its duty of care; and the uncoerced, informed vote of a majority of the minority stockholders.

Of course, no good deed goes unpunished. What does ab initio mean anyway? Does it mean that if the controller's first proposal to the board doesn't stipulate the M&F conditions that the transaction must be subject to entire fairness review under Lynch?  Or is it more forgiving than that? The Chancery Court has taken the position in a series of cases that ab initio should not be read so rigidly. Now, the Delaware Supreme Court has agreed. In Flood v. Synutra, the Court yesterday clarified what it meant by ab initio:

Admittedly, our opinion and the Court of Chancery’s opinion in MFW uses what can be read as ambiguous language to express the requirement that the key dual procedural protections must be in place before economic negotiations so the protections are not used as a bargaining tool in substitution for economic concessions by the controller. In describing this prerequisite to the invocation of the business judgment rule standard of review, we and the Court of Chancery have said the conditions must be in place “ab initio,” before the “procession of the transaction,” “from inception,” “from the time of the controller’s first overture,” and “upfront.”

From these uses, the plaintiff argues that MFW strictly hinges the application of the business judgment rule on the controller including the two key procedural protections in the first offer. A controller gets one chance, as the master of its offer, to take advantage of MFW, and if it fails to do so, that is it. But in an earlier case, the Court of Chancery and we did not embrace this rigid reading of MFW. In the case of Swomley v. Schlecht, the Court of Chancery held that MFW’s “ab initio” requirement was satisfied even though “the controller’s initial proposal hedged on whether the majority-of-the-minority condition would be waivable or not” because the controller conditioned the merger on both of MFW’s dual requirements “before any negotiations took place.” We affirmed that well reasoned conclusion, and adhere to that approach[.] 

Rather than read ab initio literally and rigidly, the Court wants controllers and boards and, most especially potential plaintiffs to have a more flexible reading of ab initio:

A goal scored in the fifth minute of a 90-minute game would be referred to as a goal at the beginning of the match. Enjoying the beginning of fall refers to those few weeks in late September and early October when the weather gets chilly and the leaves start to change color, not just the autumnal equinox. The beginning of a novel is not the first word, but the first few chapters that introduce the reader to the characters, setting, and plot. Indeed, three years after Britain entered World War II, Winston Churchill famously declared that the War had reached “the end of the beginning.” 

So, perhaps this is the beginning of the end of litigation in properly structured controlling shareholder transactions.

-bjmq

October 10, 2018 in Delaware, Litigation | Permalink | Comments (1)

Thursday, September 20, 2018

Two new Vice Chancellors for Chancery

Today, Gov Carney nominated Morgan Zurn and Katherine McCormick to fill the newly created vacancies in the Delaware Chancery Court. This will expand the number of chancellors from five to seven. A few years ago, the Chancery Court was often criticized for being an all-male bastion. With these two new additions, the number of women chancellors will rise to three. 

-bjmq

September 20, 2018 in Delaware | Permalink | Comments (0)

Wednesday, September 19, 2018

MAE Claim in Chancery

Earlier this week, Channel Medsystems sued Boston Scientific (complaint: Medsystems) over Boston Scientific's termination of their merger agreement. Boston Scientific claimed a MAE as the reason to scuttle the deal - in this case it was the apparent embezzlement of $3 million by a Channel Medsystems' employee.  Embezzlement as an MAE? They should probably read IBP  again. Under current law, while it's certainly not good, it's probably not going to be enough to be an MAE. Is a $3 million theft from a company worth $275 million material? Sure! Is it an MAE as described under IBP? Um. Probably not. While few (none) of these cases result in actual MAE's, they do offer parties opportunities to renegotiate the price. For example, in this transaction, a $3 million theft likely  hasn't changed the prospects of the target in any durationally significant manner. So, an MAE isn't going to fly, but it has likely reduced the price level for the target. 

-bjmq

September 19, 2018 in Material Adverse Change Clauses | Permalink | Comments (1)

Friday, September 14, 2018

Brexit wrinkle

Here's a wrinkle to keep in mind. If there is a "no deal" Brexit and the UK crashes out of the EU without any sort of backstop in place, deals that previously would have required EU antitrust review and approval will likely have to submit in both the EU as well as in the UK.  Brexit might be a mess, but it's more work for lawyers - even deal lawyers!

-bjmq

September 14, 2018 in Europe | Permalink | Comments (0)

Thursday, September 13, 2018

The nonsensical market out in appraisal

Just got to thinking about appraisal's market out exception and it strikes me that it doesn't make much sense. Sure, sure, students have a tough time reading and then understanding the statutory provision (thanks drafters). But I mean something different. If you receive stock in a publicly traded corporation or in stock of the acquirer, then no appraisal rights for you. If you receive cash for your stock, you get appraisal rights. Ok. But, the appraisal remedy was originally adopted at a time when consideration in mergers was mostly stock. Dissenting stockholders who didn't want the stock of the acquirer at the exchange ratio agreed to in the merger were given the right to be cashed out - to receive the value of their stock in cash money. So, modern appraisal statutes seem to get this exactly backwards. If you receive stock, no appraisal. If you receive cash (something other than stock of the surviving corporation or publicly traded stock), you have rights. 

Now that we live in the merger price as fair value era, it strikes me that we've moved very far away from appraisal's original intent into a weird place. I wonder whether it's even worth it.

See, now that I'm no longer an Associate Dean you get these random corporate law thoughts.

-bjmq

September 13, 2018 | Permalink | Comments (2)

Wednesday, September 12, 2018

MFW's ab initio requirement

 

This morning the Delaware Supreme Court heard arguments in Flood v. Synutra International. The main issue in the case was the status of MFW's ab initio requirement - whether in a controlling shareholder take-private transaction - the ab initio requirement announced in M& F Worldwide is a brightline requirement or if it's something less than that. The two justices who were most active were Justice Valihura and Chief Justice Strine. Justice Valihura seems to like brightline rules. On the other hand, Chief Justice Strine does not appear to be a big fan of the ab initio requirement. Strine's reluctance to see a "foot fault" on the ab initio requirement as a major problem shouldn't come a big surprise. His Chancery Court opinion that formed the basis for the later Delaware Supreme Court case in M & F Worldwide included no such requirement.

For your viewing pleasure:

 

-bjmq

September 12, 2018 | Permalink | Comments (0)

Monday, April 23, 2018

Call for Papers: Contractual Governance

From our friends at the AALS Section on Business Associations: 

Call for Papers for Section on Business Association Program on
Contractual Governance: the Role of Private Ordering
at the 2019 AALS Annual Meeting

The AALS Section on Business Associations is pleased to announce a Call for Papers from which up to two additional presenters will be selected for the section’s program to be held during the AALS 2019 Annual Meeting in New Orleans on Contractual Governance: the Role of Private Ordering.  The program will explore the use of contracts to define and modify the governance structure of business entities, whether through corporate charters and bylaws, LLC operating agreements, or other private equity agreements.  From venture capital preferred stock provisions, to shareholder involvement in approval procedures, to forum selection and arbitration, is the contract king in establishing the corporate governance contours of firms?  In addition to paper presenters, the program will feature prominent panelists, including SEC Commissioner Hester Peirce and Professor Jill E. Fisch of the University of Pennsylvania Law School.

Our Section is proud to partner with the following co-sponsoring sections: Agency, Partnership, LLC's and Unincorporated Associations, Contracts, Securities Regulation, and Transactional Law & Skills

Submission Information:

Please submit an abstract or draft of an unpublished paper to Anne Tucker, amtucker@gsu.edu on or before August 1, 2018.  Please remove the author’s name and identifying information from the submission.  Please include the author’s name and contact information in the submission email.

Papers will be selected after review by members of the Executive Committee of the Section. Authors of selected papers will be notified by August 25, 2018. The Call for Paper presenters will be responsible for paying their registration fee, hotel, and travel expenses.

Any inquiries about the Call for Papers should be submitted to: Anne Tucker, Georgia State University College of Law, amtucker@gsu.edu or (404) 413.9179.

April 23, 2018 | Permalink | Comments (0)

Monday, April 2, 2018

Corporate & Securities Litigation Workshop - Call for Papers

From our friends at the Workshop for Corporate & Securities Litigation:

The University of Richmond School of Law, in conjunction with Boston University School of Law, University of Illinois College of Law, and UCLA School of Law, invites submissions for the Sixth Annual Workshop for Corporate & Securities Litigation. This workshop will be held on October 19-20, 2018 at the University of Richmond School of Law in Richmond, Virginia. 

Overview
This annual workshop brings together scholars focused on corporate and securities litigation to present their scholarly works. Papers addressing any aspect of corporate and securities litigation or enforcement are eligible, including securities class actions, fiduciary duty litigation, and comparative approaches. We welcome scholars working in a variety of methodologies, as well as both completed papers and works-in-progress.
Authors whose papers are selected will be invited to present their work at a workshop hosted by the University of Richmond. Hotel costs will be covered. Participants will pay for their own travel and other expenses.

Submissions
If you are interested in participating, please send the paper you would like to present, or an abstract of the paper, to corpandseclitigation@gmail.com by Friday, May 25, 2018. Please include your name, current position, and contact information in the e-mail accompanying the submission.  Authors of accepted papers will be notified by late June. 

Questions
Any questions concerning the workshop should be directed to the organizers: Jessica Erickson (jerickso@richmond.edu), David Webber (dhwebber@bu.edu), Verity Winship (vwinship@illinois.edu), and Jim Park (James.park@law.ucla.edu).

April 2, 2018 | Permalink | Comments (0)

Friday, August 18, 2017

Faculty Position - Richmond

Richmond is seeking to fill slots in the corporate area. See notice below:

The University of Richmond School of Law seeks to fill three tenure-track positions for the 2018-2019 academic year, including one in corporate/securities law.  Candidates should have outstanding academic credentials and show superb promise for top-notch scholarship and teaching.  The University of Richmond, an equal opportunity employer, is committed to developing a diverse workforce and student body and to supporting an inclusive campus community.  Applications from candidates who will contribute to these goals are strongly encouraged. 

Inquiries and requests for additional information may be directed to Professor Jessica Erickson, Chair of Faculty Appointments, at lawfacultyapp@richmond.edu

-bjmq

August 18, 2017 in Academic Jobs | Permalink | Comments (0)

Friday, April 21, 2017

Call for Papers: Access to the Courts in the Transactional Setting

CALL FOR PAPERS

AALS Section on Transactional Law and Skills

Access to the Courts in the Transactional Setting

2018 AALS Annual Meeting

San Diego, CA

 

 

This call for papers solicits unpublished papers that analyze the question of access to the courts in a variety of transactional law settings.

From small business disputes, to mandatory consumer arbitration, to restrictions on shareholder lawsuits, it is no longer obvious that parties will have access to courts in the event of a dispute. In many cases small businesses may negotiate for alternative dispute resolution in commercial contracts as more efficient than going to courts. In others, like in the context of consumer contracting, restricting access to the courts is not typically subject of negotiation, and many consumer transactions now come with mandatory arbitration clauses. In recent years, in response to an explosion in shareholder and class action litigation, corporations also began to look to a variety of self-help remedies (often aided by state legislatures), including exclusive forum provisions and fee-shifting provisions among others, to restrict access to the courts by shareholders.

Taken together one could reasonably question whether the current trajectory in common business and consumer settings to limit parties and third parties access to the courts through a variety of transactional mechanisms is good policy or it goes too far.

The Section on Transactional Law and Skills invites submissions from any full-time faculty member of an AALS member school who has written an unpublished paper, is working on a paper, or who is interested in writing a paper on this topic to submit a 1 or 2-page proposal to the Chair of the Section by August 31, 2017. Papers accepted for publication as of August 31, 2017 that will not yet be published as of the 2018 meeting are also encouraged. The Executive Committee will review all submissions and select proposals for presentation as part of our AALS 2018 Section Meeting.

Please direct all submissions and questions to the Chair of the Section, Brian JM Quinn, section chair, at the address below:

Brian JM Quinn
Boston College Law School
885 Centre St., Newton MA 02459
Email: brian.quinn@bc.edu

April 21, 2017 in Conference Announcements | Permalink | Comments (0)