Last year Cleary Gottlieb published a blog post and an alert memorandum highlighting the SEC staff’s renewed focus on whether the use of non-GAAP financial measures (NGFMs) by domestic registrants complies with the requirements of Regulation G.  Recently, a number of plaintiff-stockholders of target companies in M&A transactions have brought purported class actions in federal court alleging that the “Forecasts” section in M&A disclosure documents violates Regulation G.  In support of these M&A disclosure related claims, plaintiffs have been citing our post and memo about these SEC staff initiatives, which relate to earnings releases and periodic reports, even though our prior publications did not address the application of Regulation G to M&A disclosure documents. Continue Reading Setting the Record Straight: Regulation G Does Not Apply to Non-GAAP Financial Projections in M&A Transactions

On 29 August 2017, the UK Government published its response to its recent consultation on UK corporate governance reform. The Government has proposed 12 reforms to the UK corporate governance regime, centered around executive remuneration, employee and other stakeholder representation and corporate governance in large privately-held businesses. In this memorandum, we briefly explore each of the proposed reforms.

Click here, to continue reading.

For the past several years Cleary Gottlieb has published legal and practical information regarding German public M&A transactions.  For the new edition of the compilation Public Bids and Squeeze-Outs in Germany, a Statistical Survey (2002 – 2016), we have collected and analyzed information related to public bids and squeeze-outs in Germany from January 2002 through December 2016. Continue Reading Public Bids and Squeeze-Outs in Germany, a Statistical Survey (2002-2016)

U.S. and European companies continue to receive bids to sell themselves and their significant assets to companies based in the People’s Republic of China.  Evaluation of these proposals requires due diligence of the acquiror’s ownership structure, assets, cash position, and financing sources.  Moreover, even if this due diligence exercise gives rise to satisfactory results, the continued unpredictability of the PRC government (including its recently enhanced foreign exchange control measures), coupled with the ties of some of these buyers and financing sources to governmental entities in the PRC, as well as the challenges that a non-PRC counterparty faces when seeking to enforce contractual obligations and non-PRC judgments in PRC courts, merit the implementation of an array of innovative provisions in M&A Agreements to protect the seller/target.  Several months ago, we reviewed these provisions in a popular post.  This new post updates that earlier post to reflect recent regulatory developments and the evolution of market practice. Continue Reading An Updated Look at How M&A Agreements Handle the Risks and Challenges of PRC Acquirors

A recent ruling in the ongoing Lehman Brothers bankruptcy case serves as an important reminder about the risks of deferred compensation.

The ruling, issued by Judge Shelley C. Chapman of the U.S. Bankruptcy Court for the Southern District of New York, involved employee claims for payment of deferred compensation under the Lehman Brothers’ (formerly known as Shearson Lehman Brothers) deferred compensation plan.  The plan provided that employee claims would be subordinate to those of all other present and future creditors of the plan sponsor.

Click here, to read the full alert.

Cleary Gottlieb and PwC’s Governance Insights Center have teamed up to create the Executive Compensation Series, which looks at the factors motivating boards to increasingly engage with shareholders about executive compensation.

The July and April editions can be found here and here, and a list of past editions can be accessed here.

 

Cleary Gottlieb’s “2017 Securities and M&A Litigation Mid-Year Review” discusses major developments so far this year and highlights significant decisions and trends ahead. In the first half of 2017, the U.S. Supreme Court decided securities cases concerning the application of statutes of repose and the five-year statute of limitations for penalties, and granted petitions for certiorari concerning liability under the Exchange Act and the appropriate forum for class actions asserting Securities Act claims. The circuit and district courts also decided significant securities law issues, including the impact of extraterritoriality at the class certification stage. In the context of M&A litigation, plaintiffs continued to file disclosure-only lawsuits in other fora, in response to the Delaware Court of Chancery’s In re Trulia, Inc. Stockholder Litigation decision. Recent decisions by the Delaware courts clarified the application of the business judgment rule to stockholder-approved transactions and the determination of fair value.

Click here, to read the full alert.

On August 1, 2017, the Delaware Supreme Court issued its highly anticipated decision in the appraisal appeal, DFC Global Corp. v. Muirfield Value Partners, L.P.  The Chancery Court’s decision below had garnered substantial attention for its determination that DFC Global’s fair value was approximately 7.5% higher than the deal price, even though the court found a robust and conflict-free sale process.  On appeal from that decision, DFC Global argued that the Delaware Supreme Court should adopt a presumption in appraisal actions that the deal price in arm’s length and competitive mergers equals fair value.  The appeal drew dueling amicus briefs from two groups of prominent professors, one in favor of this presumption,[1] and one opposed to it.[2] Continue Reading Delaware Supreme Court Declines To Establish A Presumption In Favor Of Deal Price In Appraisal Actions—Or Did It?

We were happy to see many of you at our “Blockchain and FinTech Opportunities” conference on Thursday, July 13.

If you were unable to attend or would like to review a recap of the event, key takeaways from the day’s discussions and videos of the panels can be found here.

Please do not hesitate to contact your friends at Cleary Gottlieb regarding any of the matters raised at the conference, and we hope to see you at an event in the near future.

  • The Impact of New Trends in Asset Management and Investor Expectations
  • The Relationship between the CEO and an Activist Director

The keynote presentation at the 2017 Tulane Corporate Law Institute featured a discussion among

  • Gerald Hassell, Chair and CEO of Bank of New York Mellon;
  • Ed Garden, CIO and Founding Partner of Trian Partners; and
  • Ethan Klingsberg, partner in Cleary Gottlieb’s New York office.

The discussion focused on:

  • How new trends in asset management and investor expectations are impacting boards of publicly traded companies – a topic on which the participants had insights in view of Mr. Hassell’s  experience leading not only a publicly traded issuer with engaged investors but also a business that hosts a growing stable of passive-strategy funds as well as actively managed funds, and Mr. Garden’s experience with asset managers and boards through his roles as a high profile shareholder and board member of publicly traded companies on behalf of Trian.  A transcript of this portion of the discussion was published in the new issue of The M&A Journal that is available here; and
  • Bank of New York Mellon’s experience engaging with and managing its relationship with Trian and Mr. Garden – featuring perspectives from both sides of the relationship and offering guidance useful for directors and executives preparing for or in the midst of handling activism.  A transcript of this portion of the discussion was published in the new issue of The M&A Journal that is available here.