The CEOs of 150 major US public companies recently pledged to act for all of their “stakeholders” – customers, employees, suppliers, communities and yes, even stockholders.[1] Much commentary ensued. But before we get too excited about whether these CEOs are grasping the mantle of government to act on behalf of the citizenry and other people who aren’t paying them, there is the prior question of whether, as a matter of Delaware law, they can. Continue Reading Outlaws of the Roundtable? Adopting a Long-term Value Bylaw

On September 21, 2019, Cleary Gottlieb partners Ethan Klingsberg and Jim Langston, along with moderator Paul Washington, executive director of The Conference Board, Anu Aiyengar, Head of North American M&A at J.P. Morgan and Anthony Kim, Partner at Centerview Partners, discussed M&A risks for boards and management teams arising in connection with:

  • internal forecasts
  • the roles of insiders
  • fundless, LP and lesser-known sponsors

Continue Reading M&A Risks for Boards and Management Teams in 2019-20 – Takeaways from Conference Board Panel Discussion among Cleary Gottlieb, J.P. Morgan and Centerview M&A Advisors

Last week, the Securities and Exchange Commission adopted a rule under which any issuer can “test the waters” for a securities offering before or after filing a registration statement. This new rule extends an accommodation previously available only to emerging growth companies.

Please click here to read the full alert memorandum.

On September 17, 2019, the Department of the Treasury proposed regulations implementing most of the remaining provisions of the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”), which updated the statute authorizing reviews of foreign investment by the Committee on Foreign Investment in the United States (“CFIUS”). Continue Reading Proposed CFIUS Regulations Expand Its Jurisdiction

Bayer enjoys summertime. Bayer brings this summer’s M&A highlight with the sale of its veterinary medicine division to Elanco for approx. USD 7.6 billion. Together with Lanxess, Bayer also sells chemical park operator Currenta to Macquarie for a transaction volume of approx. EUR 3.5 billion. Finally, Bayer lets go of Dr. Scholl’s foot treatment articles to financial investor Yellow Wood for approx. USD 585 million. Japanese speciality chemicals company DIC cinches BASF’s pigment business for approx. EUR 985 million. Volkswagen and Northvolt establish a joint venture to manufacture lithium-ion batteries and China Railway Rolling Stock Corporation succeeds in entering the European market with its acquisition of Vossloh’s European locomotive business. Continue reading.

Standardization can be a virtue and one that M&A lawyers, likely due to self-interest and ego, sometimes resist.  If venture financing and derivatives practices can have widely accepted forms of legal documentation as a starting point, why should M&A be an exception?  Ironically, agreements for takeovers of publicly traded companies – once revered as a rarified realm that only an elite group huddled in skyscrapers in Manhattan could navigate – has evolved considerably toward standard forms thanks to enhanced attention to these publicly filed agreements and an effort by Delaware courts to draw clearer guidelines about precisely what will and will not fly in the world of “public M&A.”  Continue Reading Guidance on Navigating the Atlassian Term Sheet: Understanding the Substantive Implications Behind the Virtues of Standardization in M&A

On August 21, the Securities and Exchange Commission (“SEC”) adopted (1) guidance on the proxy voting responsibilities of investment advisers under the Investment Advisers Act and related rules (the “Advisers Guidance”) and (2) interpretation and guidance on the applicability to proxy voting advice of the rules on proxy solicitation under the Securities Exchange Act (the “Solicitation Guidance”). Continue Reading In its Highly Anticipated Guidance on Proxy Advisory Firms, the SEC Proceeds With Caution

Monday’s Business Roundtable Statement on the Purpose of a Corporation is significant, mostly because it opens the door for more discussion of the idea of “corporate purpose”.  While there are many ways that conversation could go, there are good reasons to believe the discussion will lead to a shift in corporate governance towards more authority and responsibility for corporate boards.  Specifically, boards will be expected to lead on corporate social responsibility issues. Continue Reading The Purposes of a Corporation and the Role of the Board

Last week, the Securities and Exchange Commission issued another in its series of rule proposals to revise the disclosure requirements applicable to reporting companies. Its August 8, 2019 proposal addresses simplification of three items in Regulation S-K that have not been revised for more than 30 years. We also provide a link in the attached to our new Disclosure Simplification Explainer, which maps and provides live links to each of the SEC releases addressing disclosure simplification.

Please click here to read the full alert memorandum.

Cleary Gottlieb’s “2019 Mid-Year Developments in Securities and M&A Litigation” discusses major developments from the first half of 2019 and highlights significant decisions and trends ahead.

In Lorenzo, the most significant securities decision in 2019 so far, the Supreme Court clarified the scope of “scheme liability” under Rule 10b-5(a) and (c). The Court also declined to rule on several significant issues arising from the Ninth Circuit, including whether plaintiffs must show that the defendant acted with scienter when bringing claims under Section 14(e), whether Morrison extends to unsponsored American Depositary Receipts, and the standard for establishing loss causation. Looking ahead, we will be watching for a potential grant of certiorari from the Tenth Circuit’s decision in Scoville, which held that the Dodd-Frank Act permits the SEC to bring fraud claims or claims under Section 17 of the Securities Act based on sales of securities that do not constitute domestic transactions within the meaning of Morrison. With respect to M&A litigation, the Delaware Supreme Court continued to clarify its jurisprudence with respect to appraisal methodology as well as the protection MFW affords to controlled transactions. The Court also released important opinions pertaining to oversight duties for boards of directors and the fiduciary duties of activist investors.