Here’s news from Subodh Mishra of ISS’s Governance Exchange: The Council of Institutional Investors is considering changes to its governance policies to support the use of a universal ballot in proxy fights. The proposed addition of language backing the use of a universal ballot in proxy contests to the Council’s director election policy is meant to support the perspective that “the shareholder voting franchise will be enhanced only if proxy contest participants are allowed to circulate a proxy card with all candidates with equal prominence on a single card.” The Council contends that effective circulation and execution of a universal proxy in a 2012 proxy contest involving Canadian Pacific “suggests that reform in this area may be easier to implement than previously understood.”
John Grossbauer of Potter Anderson notes: Last week, Delaware Chancellor Strine delivered this opinion – in In re Morton’s Restaurant Group Shareholders Litigation – granting defendants’ motion to dismiss post-closing litigation challenging the sale of Morton’s to Landry’s. The Chancellor referenced various materials incorporated by the plaintiffs into their complaint, recognizing the discovery that had occurred in the pre-closing phase of the litigation as well as the public filings be Morton’s. He found the business judgment rule would apply, both in light of the independence of a majority the Board and the extensive market check, as well as his finding that, even assuming the former 27.7% stockholder was a controlling stockholder, the fact it did not drive the process to a quick conclusion and shared consideration equally with the other stockholders invoked the “safe harbor” he had referenced in the Synthes decision.
We have posted the transcript for the recent webcast: “Post-Closing Claims: What Really Happens.”
John Grossbauer of Potter Anderson notes: Last week, the Delaware Supreme Court affirmed the decision of the Court of Chancery in Viacom v. Winshall. That decision confirmed a decision by BDO LLP as Resolution Accountants concerning earn-out payments from Viacom arising from the sale of Harmonix Music Systems. The Court broadly construed the authority of the accountants acting as arbitrators to determine the scope of matters the accountants were to resolve. The decision emphasizes the finality of post-closing accounting determinations and the care that must be taken in drafting and following them.
As explored in this article about how Carl Icahn’s tweet in the midst of the Dell deal costs him $2k to make corrective SEC filings, taking to social media when a deal is pending must be done cautiously. In our upcoming webcast – “The Use of Social Media in Deals” – we will be analyzing the parameters, as well as going over examples where social media was leveraged to help deals go through…
This July-August issue of the Deal Lawyers print newsletter was just sent to the printer and includes articles on:
– The Merger Tarantella: Considerations in Post-Merger Corporate Governance
– The In-House Perspective: Post Merger Governance
– Activist Shareholders in the U.S.: A Changing Landscape
– Appraisal Rights: The Next Frontier in Deal Litigation?
– The Standard of Review in Going Private Transactions: Delaware’s Long Awaited Clarification
If you’re not yet a subscriber, try a “Rest of ’13 for Half-Price” no-risk trial to get a non-blurred version of this issue on a complimentary basis.
John Grossbauer of Potter Anderson notes: Last week, Delaware Vice Chancellor Parsons issued this opinion in Merion Capital v. 3M Cogent. The Court in this case awarded petitioners $10.87 per share as the fair value determined under Section 262, compared with a merger price of $10.50. Petitioners had argued for a value of $16.26, and the company had argued for a value of $10.12. In the opinion, the Vice Chancellor gave no weight to the negotiated merger price, citing the Supreme Court’s Golden telecom opinion and the relevant facts. He also gave no weight to the company’s comparable transactions and comparable companies analyses, finding them unreliable here given, among other things, small sample sizes. He then engaged in a detailed and substantive analysis of the competing DCF analyses. Among other things, he discussed the use of management projections, finding them more reliable here than plaintiff’s proffered cash flow numbers. Finally, the Court rejected the argument that interest should not be awarded because petitioners bought their shares after the announcement of the merger and because of alleged delay in prosecution of the appraisal action.
In this podcast, Mark Gerstein of Latham & Watkins discusses the firm’s new global mergers & acquisitions app (and the related daily video series covering the “Word of the Day”), including:
– How long did it take to put together this app?
– What is the best way for practitioners to use it?
– Any surprises since you launched?
– Any plans for other apps?
By the way, Latham also has a new “Anti-Bribery and Anti-Corruption App.” Check it out…
Over on his blog, Ken Adams recently ran this blog about how to handle voluminous schedules…
Tune in tomorrow for the webcast – “Post-Closing Claims: What Really Happens” – to hear Goodwin Procter’s Larry Chu and Shareholder Representative Service’s Paul Koenig analyze what truly happens in deals – including practice tips to make your post-closing claim process go as smoothly as possible. Here are Course Materials to print out in advance…