The Sixth Amendment guarantees that criminal defendants “have the assistance of counsel,” which entails the freedom to choose said counsel, so long as he or she is able to pay for it. However, federal forfeiture laws related to asset “freezing” have served as a clever workaround to this Constitutional right for many years. That was until this March when the Supreme Court ruled in a 5-3 decision against such laws in the case of Luis v. United States.
Coal Giant Peabody Files for Bankruptcy
Peabody Energy Corp, the world’s biggest private-sector coal producer, filed for Chapter 11 bankruptcy in St. Louis last week. Although American coal companies have struggled recently, with Alpha Natural Resources and Arch Coal also filing for bankruptcy, Peabody is the largest coal company to file for bankruptcy to date.
New Treasury Rules End Pfizer-Allergan Merger Plans
On April 6, 2016, U.S. pharmaceutical firm Pfizer abandoned its $160 billion planned merger with its Irish counterpart Allergan. The two companies called off what would have been the largest merger in the pharmaceutical sector after the U.S. Treasury announced new rules restricting tax-avoiding “inversions.”
An inversion is a corporate strategy to lower a company’s tax burden by moving its U.S. corporate headquarters to another country with lower corporate tax rates. The U.S. corporate tax rate is currently 35 percent—the highest among developing countries. Ireland, by comparison, has a tax rate of only 12.5 percent. Most U.S. corporations invert overseas by merging with a smaller foreign company and moving overseas, which is exactly what New York-based Pfizer sought in merging with Dublin-based Allergan. Pfizer stood to save over $35 billion in taxes by relocating to Ireland.
Another Day, Another Airline Merger: Alaska Airlines Buys Virgin America
Over the last fifteen years, an era of mergers has left the airline industry in the hands of a few giants. Since 2005, nine of the USA’s biggest airlines have been reduced to just four, with Delta, Southwest, American, and United controlling 80% of the U.S. market. Following in the footsteps of American Airlines’ merger with US Airways in late 2013, a new $2.6 billion dollar merger between Alaska Air and Virgin America seeks to further reshape the airline industry.
Does Climate Change Affect Profitability? S.E.C. Orders Shareholder Vote on Disclosure
The S.E.C. recently ordered oil behemoth Exxon Mobil to include a resolution on its annual shareholder proxy statement that, if approved by shareholders, would require the company to disclose how its future profitability might be affected by climate change and related legislation. This marked a defeat for Exxon, the world’s largest oil producer, which fought against the proposal. While Exxon suggested that it was too vague and that it already provided adequate carbon disclosures, the S.E.C. rejected those arguments. A company spokesman stated that Exxon would provide the board’s position on the proposal in its upcoming proxy materials. It is questionable whether Exxon’s shareholders will approve the measure, as just last year shareholders overwhelmingly rejected adding an independent board member with expertise in climate change.
FIFA: Cultivator of A Corruption Culture or Hapless Victims?
FIFA, the international governing body of world soccer, has asked the United States for a return of money seized due to its implication in corruption scandals. The money it seeks totals over $40 million in salaries, benefits, and misappropriated funds that were used as bribes and for other illegal activities. FIFA claims that they are just another victim of the corrupt members of their organization that used this money in exchange for favorable proceedings and kickbacks. They assert that the illegal actions of these individuals have hurt the FIFA name and public image, and that as a result, they are entitled to restitution. In doing so, FIFA finally admits the existence of corruption within their ranks.
Goldman Sachs Reaches $5 Billion Settlement with U.S. Department of Justice
The United States Department of Justice announced on Monday, April 11, that it had reached a settlement with Goldman Sachs Group, Inc. (“Goldman Sachs”) that would require the global investment banking firm to pay more than five billion dollars in penalties for its role in the housing bubble that many see as having precipitated the worldwide financial crisis that began nearly a decade ago.
Tesla’s Battle for Direct Sales May Look to a 2013 Circuit Court Decision For Guidance
Telsa is an electric automotive company founded in 2003 that aimed to change the car industry. Telsa has a unique market strategy to achieve this goal. Differing from the usual car manufacturing company, Tesla focuses solely on electronic car technologies. Another part of Tesla’s innovative strategy to disrupt the incumbent market leaders is direct sales. This difference is a crucial element for Tesla’s success. Having direct sales to consumers avoids the middleman of dealerships, reduces inventories, and better matches consumer’s desires. This valuable market strategy is under constant threat as states like Texas and Michigan attempt to block direct sales.
Recap: “The Scott Carey Speaker Series — The Global Chairman”
On March 30, 2015 the California Law Review, Berkeley Center for Law & Technology, and Berkeley Business Law Journal welcomed Mitchell Zuklie ‘96, the global Chairman and Chief Executive Officer of Orrick, Herrington & Sutcliffe LLP (Orrick) for a Q&A discussion about his career as one of the country’s leading technology attorneys and his current role managing a major global law firm.
FBI Bypasses Apple to Unlock San Bernadino Shooter’s iPhone
The ongoing technology war involving the conflict between privacy and security has taken a new twist as the FBI hacked into San Bernadino terrorist Syed Farook’s iPhone. Instead of continuing to pursue a lawsuit to force Apple to reveal its encryption secrets, the FBI used an unknown third party to unlock the phone. Apple and news sources have yet to determine the identity of the third party or how exactly the FBI hacked the iPhone. The FBI also has not revealed if they have discovered any material information through the hack.