In Kahn v. M&F Worldwide Corp, the Delaware Supreme Court unanimously affirmed the Court of Chancery’s 2013 decision that a going-private merger with a controlling stockholder may be subject to the deferential business judgment rule, rather than an entire fairness standard of review. The Delaware Supreme Court held that business judgment review is applicable if the merger was conditioned prior to commencement of negotiations on both (1) approval by a committee of independent directors meeting certain requirements and (2) a non-waivable, informed, uncoerced majority-of-the-minority vote because “the simultaneous deployment” of these procedural protections results in the transaction “acquir[ing] the shareholder-protective characteristics of third-party, arm’s-length mergers, which are reviewed under the business judgment standard.”
Delaware Supreme Court Affirms Application of Business Judgment Review to Merger with Controlling Stockholder
Event Recap: Systemic Risk and the Financial Crisis
On February 25, 2014, the Berkeley Center for Law, Business and the Economy (BCLBE) hosted a lunchtime talk on Systemic Risk and the Financial Crisis by Prof. Steven L. Schwarcz. Prof. Schwarcz is a Professor of Law & Business at Duke University and is well known for his research and scholarship in the area of financial regulation and systemic risk. In his lecture, Prof. Schwarcz focused on how regulations should address systemic risk – “the risk that the failure of financial markets or firms harms the real economy by increasing the cost of capital or decreasing its availability.”
Chairman Camp’s Proposals Place REITs in the Crosshairs
On February 25, House Ways and Means Committee Chairman David Camp (R. Mich.) proposed a dramatic overhaul of the U.S. tax code (the Code). While the “Tax Reform Act of 2014,” (the Proposals) contains a number of previously released tax law changes, it also includes an unexpected and unwelcome strike on many public REITs.
Google Responds to Clean Energy Tax Incentives
In this age of innovation, when a majority of prominent companies are moving towards a greener, cleaner world, Google seems to be at the forefront of the initiative. One of the world’s largest technology companies has invested over $1 billion on wind and solar projects. Google believes these innovative, large-scale energy projects can become major sources of power in the future.
Second Circuit Expands the SEC’s Disgorgement Authority in Insider Trading Cases
Can the SEC require an insider trader to disgorge more than he has personally “swallowed”? The United States Court of Appeals for the Second Circuit answered “yes,” thereby expanding the SEC’s disgorgement authority. Insider traders now have to worry about more than just the criminal and civil liability imposed for the profits they have personally realized: they can now be held responsible for what others have gained from their crimes.
Valuing Tech Acquisition Deals: Signal of a New Trend or a Recurring Tech Bubble?
Tech start-ups are proliferating around the world. They introduce technology to every aspect of our lives, from the way we communicate, to the way we care about our health, to the way we store our data. As a result, almost one third of the recent NYSE and NASDAQ IPO filings involved a tech-related corporation. However, when it comes to evaluating their potential, there is plenty of extravagancy involved, and some may say, accidentally turns young start-up founders into millionaires.
Update: Comcast Announces Cable Industry Megamerger
Last fall, talks circulated within the cable industry about a potential buyout of Time Warner Cable (TWC). Last week, Comcast proposed a $45.2 billion dollar, all-stock, friendly bid for TWC. This merger would combine the two largest cable service providers in the country, which immediately raises antitrust concerns.
Google Poised to Execute Long-Delayed Stock Split
Google’s 2-for-1 stock split, which was first floated to investors almost two years ago but delayed by a shareholder lawsuit, has finally been approved by Google’s board on January 30, 2014, following a settlement of the lawsuit.
Outsourcing by Financial Services Companies: Impact of the OCC and FRB Guidelines
Outsourcing has become a critical component of financial institutions’ management of their business operations and control of their costs. In addition, institutions are outsourcing increasingly complex and sensitive banking and financial operations to third parties. In light of these developments, the Office of the Controller of the Currency (OCC) and the Federal Reserve Board (FRB) recently issued guidance on how financial institutions should manage third-party risks.
U.K. Government Moves Towards Ratification of 2001 Cape Town Convention for Airline Industry
Following a public consultation during the latter half of 2010, on December 6, 2013 the U.K. Department for Business Innovation & Skills published its response to a call for evidence on the proposed ratification by the U.K. of the 2001 Convention on International Interests in Mobile Equipment and the associated Protocol on Matters Specific to Aircraft Equipment (together, “the Convention”).