A recent spike in the use of exclusive forum provisions in M&A deals has made the task of evaluating whether such a provision could be beneficial a vital step on any dealmaker’s checklist.
The recent surge in the use of provisions can be attributed to its general enforcement under judicial review, whether in Delaware or other jurisdictions.
The popular virtual currency, Bitcoin, has a marked history of use in the black market – made practical by its ability to be exchanged anonymously without being easily traced. As a result, this has led to a push for regulations that would increase accountability and reduce criminal activity. On July 23, New York issued a Notice of Proposed Rule Making from the New York State Department of Financial Services on “Regulation of the Conduct of Virtual Currency Businesses.” Those businesses would have to obtain a license to engage in virtual currency business activity essentially by demonstrating that business will be legitimate.
In a recent announcement, AbbVie, a research based biopharmaceutical company, revealed plans to acquire Shire, a biopharmaceutical company for $53 billion. If successful, this merger would provide a significant tax advantage for Chicago-based AbbVie as it would “reincorporate in Britain and reduce its tax bill.”
This case raises important issues concerning the powers of the European Medicines Agency (EMA) and the powers and obligations of a national authority (in this case the Medicines and Healthcare products Regulatory Agency (the MHRA)) when conducting inspections relating to the adequacy of the pharmacovigilance systems of the holder of a marketing authorisation and whether it has complied with its obligations relating to the reporting of suspected adverse reactions associated with the use of its products, particularly where an infringement procedure relating to such matters is pending. In this case the infringement procedure relates to an investigation under the Penalties Regulation (EC) No 658/2007 (the Penalties Regulation)1 being conducted by the EMA; seemingly the first of its kind.
On July 16, 2014, the United States announced another expansion of sanctions in response to events in southern and eastern Ukraine. The United States for the first time imposed sanctions against major Russian companies and banks – Gazprombank, Novatek, Rosneft, Vnesheconombank, which have been placed on a new Sectoral Sanctions Identification (“SSI”) List. While SSI List sanctions are less far-reaching than standard “blocking” sanctions, they could represent a substantial challenge and complication for those doing business in and with Russia. The United States also extended “blocking” sanctions to an additional five Russian individuals, nine Russian/Ukrainian companies, as well as the Luhansk People’s Republic and the Donetsk People’s Republic. The European Union (“EU”) is also reportedly considering broader sanctions against Russian and Ukrainian individuals and companies.
A new real estate investment trust called the American Farmland Company has popped up. American Farmland is run by a group of investors that includes Thomas S.T. Gimbel, who once headed the hedge fund division of Credit Suisse. As food prices have been on the rise, hedge funds have developed a history of buying up cheap farm land. However, American Farmland is looking to do something that very few have done before: allow ordinary investors to purchase stock in American Farmland. Currently, two other real estate investment trusts—Farmland Partners and Gladstone Land Corporation—are trading on the Nasdaq stock exchange. American Farmland would join them to become the third real estate investment trust that owns and leases farmland to trade on a U.S. stock exchange.
Zurich-based investment bank, Credit Suisse, recently reported a second-quarter loss of 700 million Swiss francs (779 million dollars)—the bank’s largest lost since the financial crisis in 2008. The loss stands in contrast to the bank’s net profit of 1.05 billion francs in the previous year. The loss is the aftershock of a settlement Credit Suisse reached with the United States in May by pleading guilty to one count of conspiring to aid tax evasion. The bank was helping Americans hide their money in Swiss accounts in order to avoid paying U.S. taxes. As a result, Credit Suisse agreed to pay $2.6 billion in penalties. In regards to the bank’s recent legal issues, Brady Dougan, the bank’s Chief Executive Officer in the U.S., said that “there is no issue that has taken more of [the bank’s] time over the past five to six years.”
July marks the four year anniversary of the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The law, which was passed by the Obama administration with the intent to prevent the recurrence of events that caused the 2008 financial crises, has been a divisive issue in Washington and Wall Street since its initiation.
On July 16, the U.S. government further expanded the sanctions imposed in response to Russian President Vladimir Putin’s decision to reclaim the Crimean Peninsula as a part of the Russian Federation. These expanded sanctions include the introduction of the Sectoral Sanctions Identifications List (SSI List), which restricts financial transactions with certain entities that operate in the financial and energy sectors of the Russian economy, as identified by the U.S. Treasury Secretary pursuant to Executive Order 13662.1 The new sanctions represent a significant escalation in the tensions between Russia and the United States and target large banks, energy, and defense firms.
On July 15, 2014, the United States Court of Appeals for the District of Columbia remanded Ralls Corporation’s (Ralls) precedent-setting case against the Committee on Foreign Investment in the United States (CFIUS or the committee) and President Obama to district court for the enforcement of Ralls’s right to due process.1 Ralls had argued,inter alia, that CFIUS and the president had unconstitutionally deprived it of its right to property by forcing it to divest that property for national security reasons. The court found that the president had not provided process sufficient to satisfy the Fifth Amendment, and that Ralls was entitled to (a) notice of the official action, (b) review of the unclassified portions of the evidence relied upon by the president in his decision and (c) the right to respond to that evidence. Separately, the court found that the district court also had incorrectly dismissed a number of Ralls’ other claims against CFIUS as moot, and remanded those additional claims for a hearing on the merits. The court’s decision may add a new layer of uncertainty to CFIUS processes, impact both applicants’ rights and committee procedures, and increase the number of tactical decisions involved in preparing for a CFIUS review.