I chuckled to see this article from DelawareOnline about the new style of judicial robe that Chief Justice Strine is rocking. Legal fashion is “in” baby! Justice of a different stripe?
Let’s not forget that SCOTUS Chief Justice Rehnquist upped the ante in judicial attire when he became Chief Justice in 1994. A local Gilbert & Sullivan troupe takes credit for the inspiration as a few months before Rehnquist’s duds were introduced as they had judges robes in “Trial by Jury” that were almost identical.
As noted in this press release, PwC found that the first half of 2014 saw deal value surge to $982 billion, its highest level since the first six months of 2007, pre-recession. Almost half of the total value was driven by large transformational deals – each one was valued at $10 billion or more.
PwC provides comprehensive data on the full first half of 2014 with key insights including:
– Transformational deals (valued at $10 billion or more) accounted for 49% of overall deal value for the first 6 months of the year
– Deal value increased to $982 billion in the first half of 2014, up from $570 billion for the same period in 2013
– Private equity transactions represented 11% of deal value and 17% of volume
– Cross border deal value increased significantly to $308 billion in the first half of 2014 from $98 billion in the same period of 2013
Recently, we got the question from a member who was marking up a definitive agreement for the purchase of target company – a manufacturer of metal products – whom they believed to be utilizing conflict minerals. The member asked “Has anyone seen and reps and warranties being given for the use/non-use of conflict minerals in stock purchase agreements and, if so, what is being represented/warranted?”
My response was: These reps are pretty boilerplate. In the first example below, note that Oracle/Micros has a covenant that the seller has undertaken commercially reasonable efforts to eliminate conflict minerals from its supply chain:
State and federal courts in California have gone different directions on whether to follow Delaware’s lead in enforcing forum selection provisions in bylaws. In 2011, the Northern District of California had ruled in Galaviz v. Berg that a forum selection provision in Oracle’s bylaws was not enforceable. However, in a recent case, the Superior Court of California followed the Delaware Court of Chancery’s 2013 decision in Boilermakers v. Chevron, in which the Court of Chancery upheld the enforceability of a forum selection bylaw. The California Superior Court dismissed shareholder class actions against Safeway arising from its announced merger on account of a provision in Safeway’s bylaws designating Delaware as the exclusive forum for such cases. In its decision, the Court noted that Galaviz had been decided before Chevron, and that (in contrast to Galaviz) there was no evidence that the alleged wrongdoing had occurred before Safeway adopted its exclusive forum bylaw.
However, in a less favorable development for enforcement of exclusive forum bylaws, the Northern District of California declined to certify the enforceability of such bylaws to the Delaware Supreme Court. This ruling denies the defendant corporation the chance to argue this issue in front of what would likely be a sympathetic tribunal, given the Delaware Supreme Court’s decision in ATP (see Delaware Legislative Update above) regarding fee-shifting provisions in bylaws, and given that Chief Justice Strine authored Chevron while on the Court of Chancery. (Groen v. Safeway, No. RG14716641 (Cal. Super. Ct. May 24, 2014); Bushansky v. Armacost, 3:12-cv-01597 (N.D. Cal. June 25, 2014)).
As noted in this Skadden memo: “On July 15, 2014, the U.S. Court of Appeals for the District of Columbia ruled that President Obama and CFIUS unconstitutionally deprived Ralls Corporation of its property rights by forcing it to divest that property for national security reasons without first providing adequate due process. The court’s precedent-setting decision may add a new layer of uncertainty to CFIUS processes, impact both applicants’ rights and committee procedures, and increase the number of tactical decisions involved in preparing for a CFIUS review.”
This study examines the relationship between proxy contests and how they impact the careers of incumbent directors – and finds that the battles cost nominated directors is 60% greater than non-nominated ones. Here is an excerpt:
We show that proxy contests are associated with significant adverse effects on the careers of incumbent directors. First, following a proxy contest, incumbents lose seats from targeted boards. Three years after the proxy contest, more than 39% of the directors will not be on the board of the targeted company. Furthermore, following a proxy contest, directors experience a significant decline in the number of seats on other boards. The total number of other directorships falls by more than 17% over the three years after the proxy contest.
Overall, facing a direct threat of removal is associated with $1.3-$2.9 million in foregone income until retirement for the median incumbent director. The authors also conclude that there is a causal effect of proxy contests on director careers by studying the difference in career effects between nominated and non-nominated directors on staggered boards that are the target of a proxy contest.
Tune in tomorrow for the webcast – “Divestitures: Nuts & Bolts” – during which Doug Campbell, Jim Rice, Doug Brody and Scott Berry of E&Y will teach us all we need to know about diversitures, including financial, operational & tax considerations…