Case Law Developments

Subscribe to Case Law Developments via RSS

The 27th Annual Tulane Corporate Law Institute was held on March 19 and 20 in New Orleans.  As in prior years, panelists included preeminent M&A, financing and securities practitioners and members of the Delaware judiciary, as well as prominent investment bankers, proxy solicitors, public relations advisors and journalists.  In this series, we are highlighting three issues among the many topics discussed during the conference.  Last week, we discussed appraisal arbitrage. Today’s topic: forum selection bylaws and recently proposed amendments to DGCL § 115.
Continue Reading Highlights from the 2015 Tulane Corporate Law Institute: Forum Selection Bylaws

The 27th Annual Tulane Corporate Law Institute was held on March 19 and 20 in New Orleans.  As in prior years, panelists included preeminent M&A, financing and securities practitioners and members of the Delaware judiciary, as well as prominent investment bankers, proxy solicitors, public relations advisors and journalists.  During the coming days, we will highlight in a series of posts three issues among the many topics discussed during the conference.  Today’s topic: appraisal arbitrage and recently proposed amendments to DGCL § 262.
Continue Reading Highlights from the 2015 Tulane Corporate Law Institute: Appraisal Arbitrage

On Wednesday, April 1, 2015, the SEC announced its first enforcement action against a company for requiring its employees to sign confidentiality agreements that contained language that had the potential to stifle the whistleblowing process.
Continue Reading SEC Announces First Enforcement Action Against Company for Stifling the Whistleblowing Process by Improperly Using Restrictive Language in Confidentiality Agreements

On March 24, 2015, the U.S. Supreme Court issued Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, in which it clarified the scope of liability for statements of opinion under Section 11 of the Securities Act of 1933. In particular, the Court held that statements of opinion can be actionable as misstatements under Section 11 only if the plaintiff pleads and proves that the speaker did not actually hold the stated belief or if the statement of opinion contains explicit, supporting facts that are untrue.
Continue Reading Supreme Court Clarifies the Scope of Liability for Statements of Opinion Under Section 11 of the Securities Act of 1933

Change-in-control transactions can present complicated questions concerning the attorney-client privilege, should litigation arise.  Does any privilege protect post-signing, pre-closing communications between the acquirer’s and the target’s respective counsel, or are those communications subject to discovery?  And what happens post-closing to pre-closing privileged communications – does the acquiring company also acquire the pre-merger privileged communications of the target?  Recent decisions by courts in New York and Delaware help shed light on these questions and provide useful guidance on how to ensure that all available privileges are preserved.
Continue Reading Attorney-Client Privilege in M&A Transactions

Directors of public companies are increasingly facing pressure from hedge fund and institutional stockholders to engage in accretive combinations with competitors.  But they must balance this pressure against the willingness of antitrust regulators in the United States, Europe, China and beyond to delay transactions and either require significant divestitures or conduct remedies or just block these combinations outright. 
Continue Reading Delaware Chancery Court Provides Guidance on Fulfillment of Fiduciary Duties When Evaluating Antitrust Risk

The widespread practice in private acquisitions of combining a “subsidiary merger” acquisition structure with release, indemnification, and escrow arrangements, which purport to bind the target stockholders, received a jolt from the Delaware Court of Chancery’s recent decision in Cigna v. Audax.
Continue Reading Wake Up Call for Private M&A Deal Structuring

In a typical public company merger agreement, the target is required to continue to operate in the “ordinary course of business” prior to closing.  This covenant provides protection for the buyer who is obligated to complete the acquisition subject only to the fulfillment of limited closing conditions, including, typically, the non-occurrence of a “Material Adverse Effect,” and wants some certainty as to what it will be acquiring come the closing. 
Continue Reading Operating in the Ordinary Course of Business after an Extraordinary Event: Cooper Tire & Rubber v. Apollo (Mauritius) Holdings

The Delaware Supreme Court’s May 8 opinion in ATP Tour, Inc. v. Deutscher Tennis Bund, is a reminder that corporate bylaws can be muscular vehicles for addressing many aspects of corporate affairs, including innovative mechanics for resolving disputes between stockholders and fiduciaries.  The swift response to ATP by the Delaware bar, and the anticipated amendments to the Delaware General Corporation Law, are also reminders that Delaware statutory law can change rapidly in response to emerging events in the marketplace.  Finally, what will remain of ATP after the General Assembly acts (as seems likely) has important implications to the use of bylaws outside of the narrow area ATP addressed—fee-shifting—including, particularly, forum selection clauses.
Continue Reading Muscular Bylaws: ATP’S Lessons of Continuing Relevance

On May 2, 2014, the Delaware Chancery Court denied a motion to preliminarily enjoin Sotheby’s annual stockholder meeting based on allegations by an activist stockholder, Third Point LLC, that the Sotheby’s board of directors violated its fiduciary duties by adopting a rights plan (or “poison pill”) and refusing to provide a waiver from its terms in order to obtain an advantage in an ongoing proxy contest. 
Continue Reading Rights Plans and Proxy Contests: Chancery Court Denies Activist’s Motion to Enjoin Sotheby’s Shareholder Meeting