Last month, we published a blog post explaining the basis for our view that Regulation G does not require a GAAP reconciliation when M&A disclosure documents present the management projections used by financial advisors to opine on the financial fairness of merger consideration.  We argued that these projections are not the type of information that Regulation G was adopted to police and that, in view of the bases in Delaware case law and Regulation M-A for including disclosure of these projections, they should be considered exempt from the reconciliation requirements of Regulation G and Item 10(e) of Regulation S-K.  Accordingly, we urged the SEC staff to provide guidance confirming our view.   Continue Reading New SEC Interpretation Helps Limit Reg G as an Enabler of Merger Litigation

The New York City Commission on Human Rights (the “CCHR”) recently released guidance on the New York City salary history law (the “Law”) in the form of frequently asked questions. The guidance clarifies several aspects of the Law, including the application of the Law in the context of corporate acquisitions and the ability of employers to inquire about forfeited deferred compensation and unvested equity.

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As the implementation of China’s first comprehensive cybersecurity law (the “CCL”) progresses, concern is mounting in the international business community regarding the law’s expansive scope, prescriptive requirements and lack of clarity on a range of critical issues. Vocalizing such concern, on September 25, 2017, the United States government asked China to halt its implementation of the CCL and highlighted potential issues with the CCL to members of the World Trade Organization. Since the CCL’s passage, several regulations have been released by the principal agency responsible for its implementation that were intended to implement the provisions of the CCL, but in some cases appear to have further expanded its scope while leaving some critical questions unanswered. In the face of such uncertainties, foreign companies operating in China are advised to familiarize themselves with the requirements of the CCL and its implementation rules and adopt measures to enhance their preparedness for the full implementation of the CCL.

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For additional coverage of topics related to cybersecurity and privacy, we invite you to subscribe to our Cybersecurity and Privacy Watch blog, here.

On September 12, 2017, Governance Watch and Cleary Gottlieb Steen & Hamilton LLP hosted a panel discussion on “Recent Whistleblower Issues.”  Participants in the panel discussion included Matthew Solomon, a partner at Cleary Gottlieb and former Chief Litigation Counsel at the SEC’s Division of Enforcement; Emily Pasquinelli, Deputy Chief of the SEC’s Office of the Whistleblower; David Huntley, Chief Compliance Officer of AT&T; and Steven Durham, a Partner at Labaton Sucharow LLP who specializes in plaintiffs-side whistleblower representations.  The panelists discussed issues critical to U.S. public companies and foreign private issuers relating to federal whistleblower programs.  Below are the key takeaways from the discussion. Continue Reading Recent Whistleblower Issues: Key Takeaways from the Conference Board’s Governance Watch Webcast

On September 21, 2017, the Securities and Exchange Commission (“SEC”) issued helpful guidance to assist companies in complying with the CEO/median employee pay ratio disclosure requirement (the “Rule”) under Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K. The guidance also addresses the issue of SEC enforcement action in respect of pay ratio disclosure.

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The German M&A market has fared well over the summer. The Bain/Cinven consortium successfully closed its takeover bid for Stada at the second attempt. Linde shareholders can now accept the exchange offer to merge with Praxair and the Hong Kong-based CK Group wins out in the bidding for smart-metering specialist ista. Toward the end of the third quarter, TyssenKrupp and Tata Steel announce their intention to enter into a steel joint venture. Fortum is working on the takeover of Uniper. Continue reading.

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.

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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