On May 18, 2020, partners Michael Albano and Jennifer Kennedy Park participated in a webcast hosted by The Conference Board entitled “Reopen Ready: Managing Governance and Legal Risks in the New Normal.” Michael Ullmann, Executive Vice President, General Counsel of Johnson & Johnson, also participated on the panel.
Continue Reading Cleary Partners Participate in Panel Discussion on Reopening Considerations

The COVID-19 pandemic has created market conditions ripe for increased cross border investment as businesses scramble for capital and investors target distressed assets.  The Committee on Foreign Investment in the United States (CFIUS) is focused on the trend.  Senior Department of Defense officials have recently and repeatedly stressed the need for the active

While much of the focus today is on restarting segments of the economy and developing action plans to reopen businesses, history outside of corporate America teaches us important lessons on how incentives can play a role in driving effective outcomes.  It shows us that incentives, not just rules, may be the solution businesses need.  Consider the British prisoner dilemma over two centuries ago as a powerful lesson in incentives and how these lessons can be applied to the current pandemic.
Continue Reading Incentives in the Pandemic

This is an updated version of our prior post to address Governor Cuomo’s most recent Executive Orders.

In response to the COVID-19 pandemic, Governor Cuomo declared a disaster emergency and ceased operation of all non-essential businesses in New York state with the March 7 Executive Order 202 and its successor Executive Orders.  In particular, the March 20th Executive Order 202.8 provided temporary suspension of several state law regulatory requirements, including with respect to shareholder meetings of New York corporations.
Continue Reading UPDATE: Cuomo Executive Order Gives New York Corporations Relief on Physical Annual Meetings

On April 8, Institutional Shareholder Services (“ISS”) published additional guidance on application of its benchmark voting policies amid the COVID-19 pandemic.[1] ISS had previously issued its 2020 benchmark policies update to be applied for shareholder meetings on or after February 1, 2020.[2] Noting the societal and economic uncertainty wrought by COVID-19 since its prior update, ISS provides further guidance focused on four key areas:

  • Annual General Meeting (“AGM”) Issues;
  • Poison Pills, Shareholder Rights and Boards/Directors;
  • Compensation Issues; and
  • Capital Structure and Payouts.


Continue Reading ISS Issues Additional Voting Policy Guidance in Response to COVID-19 Pandemic

Last month, we described the increased threat of activists and acquirors seeking to capitalize on the COVID-19 sell-off to build positions in high-value companies at depressed prices.  Even before the current crisis emerged, we recommended that all U.S. public companies regularly review their defense profile and have a shareholder rights plans “on the shelf.” For companies uniquely impacted by the crisis—especially those whose market capitalization has fallen below $1 billion—we suggested they re-assess their vulnerabilities in this new environment and consider whether now was the right time to adopt a rights plan to ward off potential opportunistic behavior. Some companies have done just that—since March 1, 2020, 24 U.S. public companies have adopted a defensive shareholder rights plan (6 other U.S. public companies have adopted NOL rights plans).
Continue Reading ISS and Glass Lewis Issue Guidance for Poison Pills in COVID-19 Pandemic

As the COVID-19 pandemic continues to spread in the U.S. and abroad, public companies are grappling with the ramifications (real or potential) of a senior executive(s) contracting the virus.  Together with senior management, boards of directors should be actively reviewing their emergency preparedness plans, including their emergency succession plans for key executives.  Boards also need to proactively address the possibility that one or more directors become sick, including by reviewing the board’s contingency plans to ensure the board will be able to continue to perform its duties.
Continue Reading The Keys to Emergency Succession: Planning For Boards and Senior Management During a Health Pandemic

On March 30, 2019, Paul Shim and Jim Langston joined Patrick Ramsey, Global Head of M&A at BofA Securities, and Amy Lissauer, Global Head of Activism and Raid Defense at BofA Securities, on a conference call panel titled “The Impact of COVID-19 on Shareholder Activism and Hostile M&A.”

The panelists shared their views on the state of activism and hostile attacks in the current environment, how the activism playbook may evolve, when and how the next wave of activism and hostile attacks is likely to emerge, and what companies can do today to prepare for the storm.

Dial-in Details are as follows:
U.S. toll-free: 888 203 1112
International: +1 719 457 0820
Passcode: 1219818

The replay will be available from Monday, March 30, 2020, at 4:00 p.m. through Wednesday, April 29, 2020, at 2:00 p.m. Eastern.

Continue Reading The Impact of COVID-19 on Activism and Hostile Attacks: Key Takeaways

On March 25, 2020, due to the continuing impact of COVID-19, the SEC issued an order extending its previously-issued conditional relief from certain Exchange Act reporting requirements and proxy delivery requirements.

In particular, the March 25 order provides U.S. public companies with a 45-day extension to file or furnish certain filings otherwise due between March

On March 20, 2020, news outlets reported that four U.S. Senators sold millions of dollars in stock following classified briefings to the Senate on the threat of a COVID-19 outbreak.  Three days later, the Co-Directors of the Securities and Exchange Commission’s (“SEC”) Division of Enforcement, Stephanie Avakian and Steven Peikin, issued a statement reminding market participants of their obligations with respect to material non-public information (“MNPI”) and of the SEC’s commitment to protecting investors from fraud and ensuring market integrity.[1]
Continue Reading Insider Trading Risk During the COVID-19 Outbreak