Volkswagen’s chief lobbyist, Thomas Steg, was suspended in January after news broke that the German carmaker sponsored inhumane chemical testing on humans and monkeys.

The controversial study was conducted in 2014 amongst growing public concern about the effects diesel exhaust has on human health. The test consisted of scientists exposing ten monkeys to diesel fumes emitted from a Volkswagen Beetle in a sealed chamber. Volkswagen funded the testing in an effort to show that new diesel vehicles were less harmful than old models. However, the company intentionally manipulated the test’s results: the Beetle used for the experiment was altered to emit much lower pollution levels than similar models out on the market.

Steg was in in charge of overseeing Volkswagen’s sustainability matters, which included the European Research Group on Environment and Health in the Transport Sector (EUGT), the organization that employed the testing. EUGT has since been dissolved. According to a Volkswagen senior official, Steg was aware of the monkey testing, but did not make any attempt to stop it.

The news of Steg’s departure follows Volkswagen pleading guilty to conspiracy and fraud charges in 2015, in which they fabricated results of emissions tests by putting software in millions of diesel vehicles. Volkswagen doesn’t appear to be the only automaker being called into question. Records from investigations and government documents revealed that Volkswagen and several other European carmakers heavily funded research in an effort to maintain tax benefits for diesel fuel.

In spite of the recent illegalities, Volkswagen’s 2017 sales did not reveal any significant decline in revenue. Analysts say the coverage of the animal testing may change this.

Volkswagen’s monkey scandal has cost them $30 billion to date.

Volkswagen 30 Billion Later and No More Monkeying Around (PDF)

Earlier this month in Paris, four women emerged victorious in a workplace sexual harassment and discrimination suit against employer H. Reinier, a subsidiary of large French cleaning company, ONET. France’s national state-run rail company SNCF subcontracted with H. Reinier to sanitize its facilities. The plaintiffs cleaned trains in Paris’ Gare du Nord Station.

The women alleged that their team leader subjected them to frequent bullying and lewd acts over multiple years, including groping one of the women as she leaned over to clean a washroom sink. The harassment intensified when the women supported fellow employee, Rachid Lakhal, after he exposed a kickback scheme within the company. Despite repeated complaints to management, the company refused to transfer the employee responsible to another post. Instead, H. Reinier sanctioned the women for complaining about the harassment.

A French labor court heard the women’s claims alongside Lakhal’s whistleblower suit. The court agreed with the plaintiffs and found that H. Reinier failed to implement sufficient measures to protect the women.

The court awarded each of the women 30,000 euros for sexual harassment and discrimination. Lakhal was awarded 100,000 euros, in part for giving testimony that corroborated his co-worker’s claims. The case marks precedent as one of the first times a French court has awarded a whistleblower enhanced recovery for supporting workplace harassment allegations.

The victory against H. Reinier happens to coincide with an ongoing revolution against sexual harassment in France. Following allegations that Harvey Weinstein sexually harassed various French actresses, French journalist Sandra Muller confessed her own sexual harassment encounter on twitter. She branded the hashtag “balancetonporc” or “expose your pig” and has inspired hundreds of other French women to post their own experiences. The movement has also reignited discussion about some of France’s past political scandals, including an incident that forced International Monetary Fund Director Dominique Strauss-Kahn to resign.

Attorney for the plaintiffs against H. Reinier acknowledged that winning a workplace sexual harassment suit is a rare victory in France. Scholars and litigators blame the lack of effective laws and enforcement mechanisms. In fact, France only began providing a civil cause of action for workplace sexual harassment in 1992. However, commentators are hopeful that the recent anti-sexual harassment movement will put pressure on French corporations to root out sexual harassment in the workplace.

As of this article, H. Reinier has yet to terminate the employee responsible for the harassment, but plans to implement risk prevention training for all managers and salaried employees. SNCF stated that they agreed with the court’s decision, but do not plan to cut ties with H. Reinier in the near future.

Four French Women Score Upset Win in Workplace Sexual Harassment Lawsuit (PDF)

Last month, Roark Capital Group, the private equity owner of several fast-food chains, made an all-cash offer to Buffalo Wild Wings Inc. in the hopes of purchasing the chicken wing chain for close to $2.3 billion at reportedly $150 per share. Reports of this potential deal sent shares of the chicken franchise flying up as much as 28 percent.

This takeover bid comes following a difficult year for B-Dubs, as the company struggled due to rising food costs and poor sales. Longtime CEO Sally Smith announced her resignation at the end of the year following a failed proxy battle against activist shareholder Marcato Capital Management. Marcato has since appointed three of its own candidates to the company’s board. Buffalo Wild Wings has yet to name Smith’s replacement.

Some argue Roark’s offer to B-Dubs marks an effort to re-enter the chicken market following a failed attempt to purchase Popeyes.

Earlier this year, Roark Capital Group backed Arby’s Restaurant Group Inc. as the company submitted a rival bid against Burger King to purchase Popeyes Louisiana Kitchen Inc. In this particular bid, shareholders “would have received $40 a share in cash as well as equity in the combined company…with Roark owning 80 percent.” Popeyes ultimately agreed to be bought by Restaurant Brands International Inc. for about $1.8 billion.

The acquisition of Buffalo Wild Wings would fit well in Roark’s restaurant-heavy portfolio of sandwich chain restaurants – Arby’s, Carl’s Jr., and Jimmy John’s, among others.

For now, some are left wondering whether Roark’s $150 per share offer comes even remotely close to the right price for Buffalo Wild Wings stock. Just a year ago the stock reached a high of $175 per share and has climbed as high as $200 a share. It is also worth noting Marcato paid $143 for its own stock. The current bid represents a very modest yield for investors. Other potential buyers have yet to express their interest in purchasing the company for more.

Representatives by Buffalo Wild Wings and Roark have yet to comment on this rumored deal.

Wild Takeover Bid for Buffalo Wild Wings (PDF)

The Japanese Fair Trade Commission (JFTC) launched an investigation on Airbnb last month for violating antitrust laws. Regulators have obtained documents from Airbnb in Tokyo on suspicion that it asked users not to list properties on rival sites.

Upon reading an Airbnb contract, one property manager shared that he reluctantly signed an “exclusivity clause” that prohibited agents and owners from posting their listings on other websites. In exchange, Airbnb provided him with access to availability and other vital data.

Airbnb, however, denies the claims, saying it does not make property postings conditional on exclusivity. “All hosts and partners in Japan who list properties on Airbnb are able to list them on other platforms,” a Singapore-based Airbnb spokesman said.

Airbnb is Japan’s top home-sharing website, with over 50,000 rooms. It competes with hotels and other traditional forms of lodging by letting people rent out their homes or apartments to visitors. The hotel industry views Airbnb and other services as providing unfair competition, since the home-sharing companies provide similar services as the hotel industry without as stringent of licensing requirements and market regulation.

News about Airbnb’s suspected antitrust violations come amid a time of heightened competition in Japan’s vacation rentals market.

Until recently, peer-to-peer lodging (or minpaku) was illegal in Japan. However, this past June, the government passed a new law that allows private citizens to take in fee-paying lodgers for up to 180 days a year without a hotel operator license. A roster of new players have announced their entry to the market following the new minpaku rules, creating a time of intensified competition in the home-sharing market.

Furthermore, Japan is currently facing a tourism boom. As of October, the total number of foreign visitors entering the country reached 23.8 million, making it almost certain to surpass last year’s record of 24 million by the end of the year. This surge in travelers has increased the demand for short-term home rentals.

With increased supply and demand for short-term travel stay in the nation, the JFTC may face suspected antitrust violations with heightened scrutiny. If the investigation finds that Airbnb violated antitrust practices by partaking in actions to diminish business opportunities of rival companies or discourage new businesses to enter the market, the company could be subjected to disciplinary action.

Japanese FTC Tackles Airbnb for Suspected Antitrust Practices (PDF)

With companies like Amazon acquiring Whole Foods, and Broadcomm Limited making an offer to acquire Qualcomm, Inc., M&A deals have been active this quarter despite the slowing trend of M&A deals compared to those in 2016. Added to the list of notable companies in talks of potential mergers are Cineworld Group Plc. (“Cineworld”) and Regal Entertainment Group (“Regal”). Cineworld, a U.K. company and British operator of movie theaters, has offered $3.6 billion to acquire Regal in hopes of creating one of the largest movie theater chains worldwide.

Regal is not an unlikely choice for Cineworld as Regal has been looking for a buyer for the last couple of years. In 2014, Regal chose to drop its plans on selling itself. It then went on to purchase seven Warren Theaters in Kansas and Oklahoma. In 2016, it acquired Carmike Cinemas. Hoping to enhance its user experience and rival companies such as AMC Theaters and Apple and Netflix’s video streaming services, Regal has positioned itself well to dominate the industry with multiple partnerships to diversify its entertainment offerings and strengthen its hold in cinema. A partnership with Cineworld would fortify Regal’s place in the US cinema industry and expand Cineworld’s reach outside of the UK.

When news of the acquisition broke Regal’s shares increased “…as much as 16%…” Cineworld had initally offered Regal an all-cash offer of $23 per share, which analysts found to be a healthy premium over the current trading price of Regal shares. In response to the growing curiosity about the deal, Regal issued the following statement: “No agreement has been reached, and there is no assurance that any transaction will result. Regal Entertainment Group does not intend to make any further comment, or respond to any inquiries, until an agreement, if any, is reached, or discussions have been terminated.”

In a separate statement released by Cineworld later, Cineworld stated that it is in “…advanced discussions to acquire Regal and [is] finalizing due diligence on its offer.” Proposing an all-cash offer, Cineworld is said to “…finance its bid through a mixture of incremental debt and a material equity raise by way of a rights issue, including a commitment to full subscription from its largest shareholder, Global City Holdings.” Global City Holdings, a Polish holding company that owns entertainment and real estate businesses in Europe and Israel, owns 28% of Cineworld.

With Regal remaining rather quiet on this transaction, analysts find this merger to be a strong one. With attendance decreasing at movie theaters and the films failing to meet high box-office expectations, the cinema industry is scrambling to attract moviegoers who appear to be more captivated by Netflix or Amazon’s home productions than traditional Hollywood films. As Regal is the second largest move theater chain in the U.S. and Cineworld is also the second largest movie theater chain in Europe, both companies are poised to become global leaders in the cinema industry.

Regal Entertainment in Talks with Cineworld on a Potential Purchase (PDF)

The Nebraska Public Service Commission provided approval for TransCanada Corporation’s Keystone XL pipeline that would travel over 1,700 miles, transporting crude oil from Hardisty, Alberta, Canada to Steele City, Nebraska. However, the commission did not approve TransCanada’s preferred and proposed route. Rather, the commission approved a modified route that is farther east, adds five miles of pipeline, and is more expensive. This regulatory approval for the $8 billion project, initially proposed in 2008, came through as a 3-2 vote by the commission.

Due to the commission’s approval of an alternate route and not TransCanada’s proposed route, TransCanada has not yet committed to constructing the pipeline. TransCanada Chief Executive Officer Russ Girling said that TransCanada will examine how the new route would “impact the cost and schedule of the project.” This new route introduces a problem for TransCanada, as the company would need to approach landowners affected by the new route and procure new easements. TransCanada had already accomplished this task with many of the landowners that were to be affected by the preferred route.

Another question looms over whether the construction of the project will move forward: whether there is sufficient demand for the pipeline and interested customers that will contract with TransCanada to ship oil over the pipeline. TransCanada did not specifically identify any customers who committed during the open season that was launched in October, but a company statement reflected that TransCanada expects commercial interest to match up with interest initially expressed when the company applied for the pipeline permit.

The construction of the Keystone XL pipeline has long been the center of controversy and protest. Environmental advocates, farmers, ranchers, and other opponents argue that the project will damage the natural resources, endanger available drinking water, and contribute to climate change. Proponents of the pipeline predict that it will provide substantial economic benefits, tax revenue for local governments, reduced fuel prices, and will stimulate job creation.

This commission’s decision comes shortly after an already existing TransCanada pipeline spilled 210,000 gallons of oil in South Dakota.

To challenge the commission’s decision for the newly approved route, opponents can still attempt to stop the construction of the pipeline by attempting to secure an injunction granted by the state court.

Alternate Route for Keystone XL Pipeline Approved by Nebraska Public Service Commission (PDF)

During a conversation at the recent Internet Association’s Virtuous Circle Summit, Reddit’s CEO and co-founder, Steve Huffman, said that Reddit may go public in 2020. Although the plan seems to be pretty far from now, Huffman described the going-public strategy as “inevitable” and “the only responsible choice” to reward both employees and investors of the company.

Huffman and Alexis Ohanian founded Reddit in 2005 and sold the online discussion platform company to Advance Publications, the parent of several newspapers, and Condé Nast, for $10 million to $20 million. Advance then spun off Reddit, but remains a majority owner. In regards to the going-public plan, Steven Newhouse, head of Advance.net at Advance Publications, told Media Ink that it is possible for Reddit to have an IPO in a couple of years if it keeps on the same trajectory.

In addition to the spin-off, Reddit has experienced a number of other rough patches, including the allegations of hacked celebrity photos and child pornography. These controversies were worsened by the unfavorable response from the former CEO, Yishan Wong, who defended Reddit’s hands-off approach by claiming that every man was responsible for his own actions and that the users had the right to choose between right or wrong. Fortunately, Reddit has changed its policy and therefore now bans hateful “subreddits,” or hateful user-created communities.

Nonetheless, Reddit has climbed its way to become the eighth most popular site on the internet. Its advertising revenues have also increased five-fold over the past few years. In all, the company is now valued at $1.8 billion.

Reddit Visions to Go Public in 2020 (PDF)

On November 14^th, 2017, the Boalt Global Corporate Law Society welcomed Bruce Quan, former Associate Professor at Peking University Law School and former Vice Chair of the Public Policy Development Committee of the American Chamber of Commerce in Beijing (AmCham Beijing), for a discussion about his experience in transnational transactions, trends in foreign investment, and implications of President Xi Jinping’s One Road, One Belt initiative.

A graduate of UC Berkeley (’71) and Berkeley Law (’78), Mr. Quan started his career in China in the early 80’s helping foreign companies invest in China. After Chinese leader Deng Xiaoping declared, “To get rich is glorious,” during his famous Southern Tour advocating economic reform, Mr. Quan served as an external observer on the development of the rule of law system in support of those reforms.

When asked about the impact of the recent Communist Party Congress, Quan said that the collective leadership balance set up by Deng is no longer valid, because Xi is now the “sole power,” elevated to the same level as Mao Zedong, as he has unchallenged control over the military and a substantial part of the economy. Quan believes that Xi’s ultimate goal is to challenge the West’s dominance of the global economy. As part of these efforts, China set up its own infrastructure bank as an alternative to the World Bank and the IMF, develops its own homegrown industries, and seeks to limit the influence of foreign companies in China.

Quan characterized Xi’s One Belt initiative as a “mirror image” of the global financial organizations established by the U.S. and its allies after World War II. From China’s perspective, the One Belt is a response to perceived unfair treatment by the IMF and World Bank. Through this initiative, China has built ports around the world, a rail system stretching from East to West that mirrors the historical Silk Road, and provides economic aid to developing countries.

With regards to foreign companies doing business with China, Quan noted that only a handful of Chinese companies can compete world-wide, so China would like to “level the playing field.” As a result, there is not a strong focus on anti-trust, because China is focused on making their state-owned enterprises competitive globally. Furthermore, China is interested in business that will support national interests in the long-term, rather than sectors like entertainment, sports, and real estate, which is why they have tightened foreign investment policies in an effort to crack down on offshore acquisitions by companies like Wanda Group and Fosun International Ltd.

Quan’s advice for corporate lawyers interested in working in China? “It’s pretty darn frustrating. It’s not easy,” noting that one prerequisite for working in China today is fluency in Mandarin. For more information about a specific industry, Quan recommended consulting the AmCham China White Paper, which offers insight about what foreign companies feel are the current issues of doing business in China.

Recap Current Trends in Corporate and Cross-Border Transactions in and with China (PDF)

At an event in New Jersey on November 18, William C. Dudley, President of the Federal Reserve Bank of New York, held a policy roundtable to discuss local economic trends, current monetary policy and the health of the U.S. economy.

A PhD graduate of the University of California, Berkeley, Mr. Dudley was formerly the chief economist of Goldman Sachs for ten years before being appointed president of the Federal Reserve Bank and vice-chairman of the Federal Open Market Committee.

At the event, Dudley stated that the Federal Reserve was considering what it would mean to offer digital currencies at some point in the future, and “whether it may be necessary as an alternative to cash.”  He also claimed that investors should be cautious because the value of virtual currency was not legal tender and it could still be highly unstable.

On November 27, the night before CoinDesk’s crypto conference, Bitcoin hit the record of 10k.  The digital currency has been increasing in value throughout the year and has more than doubled in value since the beginning of October.  Additionally, the global crypto-currency market  rose above $300 billion for the first time on Sunday evening.

Nonetheless, Bitcoins rapid ascent has also raised concerns that the digital currency might reach “bubble territory” and collapse. As Dudley stated during the event, “In terms of Bitcoin, I would be pretty cautionary about it. I think it’s not a stable store of value and it doesn’t really have the characteristics that you’d like to have in a currency.”

Recently, at a separate forum, when asked if Bitcoin and other crypto-currencies were a tulip, Dudley quickly acknowledged that it was still uncertain and that “there was a possibility down the road that central banks could get more involved in offering digital currencies as a substitute for cash.”  Additionally, he said that the Federal Reserve Bank was considering whether digital currencies would be a more effective medium than cash.

Furthermore, Dudley said he wasn’t that concerned about high leverage in financial markets and asset bubbles because the new regulations adopted since the 2007-2009 crisis “meant that the U.S. financial system could bear that stress much, much better than before.”

Amid Bitcoin surge, Dudley says offering digital currency on Fed’s radar (PDF)

In recent years, big companies have been turning to a new place when filing for bankruptcy: Richmond, Virginia. The U.S Bankruptcy Court in Richmond has become a destination wedding spot for failed companies, as debt-ridden large out-of-town corporations plant their bankruptcies in this town, using the court and judges here known to handle complicated bankruptcy cases in a way that’s perceived by many as favorable to debtors.

One of these companies was the San Francisco-based, children’s clothing store chain, Gymboree, who filed for Chapter 11 in Richmond federal court with more than $1 billion in debt. Even though they were based in California, according to Virginia bankruptcy law since Gymboree controlled an LLC that was incorporated in Virginia, it was allowed to file in the commonwealth, benefiting from the loophole in bankruptcy law, which allows for companies to file for bankruptcy in any court district where they have an affiliate.

Likewise, Toys “R” Us also chose Richmond as the place to file for bankruptcy, as a consequence of the company’s recent troubles with heavy debt load that has weighed on the company for years, after the private equity firms Kohlberg Kravis Roberts and Bain Capital purchased the company in a leveraged buyout for about $6 billion in 2005. The famous toy store also faced hardships in competing against warehouse and online sellers, which resulted in the accumulation of a long-term debt totaling more than $5 billion.

But why are these well-known companies choosing Richmond for their bankruptcy filing? First, bankruptcy procedures tend to be extremely arduous and can drag on for years. The Richmond court offers a so-called “rocket docket” that moves cases along much quicker, as exemplified by the Gymboree bankruptcy, which was completed in less than four months. Second, the legal history in that court district contains precedents favorable to companies, such as facilitating the process for companies to walk away from union contracts.

Moreover, and perhaps one of the biggest appeals of Richmond to bankruptcy filing, is the stratospheric rates bankruptcy lawyers are able to charge there. In some cases, the attorneys were making 25 percent more than the highest average rate in 10 of the largest bankruptcies this year. Such was the case for Kirkland & Ellis, the firm that represented Toys “R” Us.

Last, but not less important, in the list of Richmond’s draws for bankruptcy filings, is the fact that the two Judges in that circuit are well known for their expertise in large corporate bankruptcies, and according to local bankruptcy lawyers, can handle cases expeditiously, which makes the strenuous process of bankruptcy slightly easier to execute.

Why Did Richmond, VA, Become a Dream Destination for Bankrupt Companies (PDF)