Corporate Update

David A. Katz and Laura A. McIntosh

Preparing for and Responding to Shareholder Activism in 2017

By David A. Katz and Laura A. McIntosh |

In their Corporate Governance column, David A. Katz and Laura A. McIntosh of Wachtell, Lipton, Rosen & Katz write: Activist investors are taking advantage of favorable conditions in the 2017 market environment to further their activist agendas. Activists are eager to recoup losses from 2016, when the S&P 500 outperformed activist funds as a whole. Companies should review their overall preparedness, take a close look at their potential vulnerabilities to activist attack, and proactively shore up any weaknesses to the extent possible.

John C. Coffee Jr.

The Race to the Bottom: Is the Last Stop New York?

By John C. Coffee Jr. |

In his Corporate Securities column, John C. Coffee Jr. of Columbia University Law School discusses a recent decision of the Appellate Division, First Department, writing: 'Gordon v. Verizon Communications' will ensure that the nuisance suit remains alive and well in New York and should bring the worst of the plaintiff's bar streaming back to New York. Unless the Court of Appeals reverses, New York will become celebrated as the jurisdiction of the judicial rubber stamp.

Philip Berkowitz

Trade Secrets and Whistleblower Disclosures

By Philip Berkowitz |

In his Employment Issues column, Philip Berkowitz discusses the recent whistleblower case 'Erhart v. BofI Holding', writing that 'Erhart' does not represent an isolated occurrence. Banks and indeed all businesses must anticipate that a whistleblower may disclose highly confidential and even privileged records to an enforcement agency or third party. These disclosures, if carried out in good faith and in the reasonable pursuit of a legal claim, are likely to be held to be fully lawful.

William F. Johnson

FIFA Judge Rejects Target-Victim Common Interest Agreement

By William F. Johnson |

In his Corporate Crime column, William F. Johnson discusses the recent high-profile FIFA soccer corruption case in the Eastern District of New York, which serves as a reminder of the protections and the dangers of communications pursuant to a "common interest."

Corinne Ball

Split Increases Uncertainty as to Extent of Safe Harbors

By Corinne Ball |

In her Distress Mergers and Acquisitions column, Corinne Ball of Jones Day discusses a recent Seventh Circuit decision that rekindled a circuit split regarding the interpretation of §546(e), which is one of the "safe harbor" provisions enacted to minimize displacement in the commodities and securities markets in the event of a major bankruptcy affecting those markets. The split results in various levels of risk for participants in financial transactions, depending on the likely venue for a later challenge.

Elliot Pisem and David E. Kahen

Recent Developments Relating to S Corporations

By David E. Kahen and Elliot Pisem |

In their Taxation column, David E. Kahen and Elliot Pisem of Roberts & Holland discuss two recent Tax Court memorandum decisions relating to S corporations and a recent change in IRS policy regarding private letter rulings on common S corporation issues.

Joseph M. McLaughlin and Yafit Cohn

Director Independence to Consider Pre-Suit Demand

By Joseph M. McLaughlin and Yafit Cohn |

Corporate Litigation columnists Joseph M. McLaughlin and Yafit Cohn review a recent Delaware decision that again signals those courts will closely scrutinize personal and business relationships that are asserted as compromising a director's ability to consider a pre-suit demand impartially.

Barbara M. Goodstein

Hague Securities Convention Comes Into Effect

By Barbara M. Goodstein |

In her Secured Transactions column, Barbara M. Goodstein of Mayer Brown discusses the Hague Securities Convention. The vast majority of securities are now held through intermediaries rather than directly, and the number of cross-border transactions has increased exponentially. These developments have created legal uncertainty, which the convention attempts to remedy by offering a uniform set of conflict of laws rules to be applied on a global basis.

David A. Katz and Laura A. McIntosh

Prioritizing Board Diversity

By David A. Katz and Laura A. McIntosh |

In their Corporate Governance column, David A. Katz and Laura A. McIntosh write: In what has been called a "breakout year" for gender diversity on U.S. public company boards, corporate America showed increasing enthusiasm for diversity-promoting measures during 2016. Momentum toward gender parity on boards is building, particularly in the top tier of public corporations.

John C. Coffee Jr.

Trumping the Constitution

By John C. Coffee Jr. |

In his Corporate Securities column, John C. Coffee Jr. analyzes the application of the Emoluments Clause to President-elect Donald J. Trump. He focuses on the specific nature of Trump's conflicts and how they expose him to foreign governmental pressure that will be largely invisible. He writes: Whether or not the Clause applies, tolerating the exposure of the President to foreign pressure is inexcusable.

Philip Berkowitz

Employment Law Expectations of a Trump Administration

By Philip M. Berkowitz |

In his Employment Issues column, Philip M. Berkowitz writes: The election of Donald Trump as President can reasonably be expected to upend the current established order of things in the world of employment law. In fact, President-elect Trump's election campaign, in large measure, was founded on arguments and issues that are uniquely the province of labor and employment lawyers: immigration law, health care, and discrimination law.

Steven M. Witzel and Michael A. Kleinman

Cybersecurity and the Incoming Trump Administration

By Steven M. Witzel and Michael A. Kleinman |

In a Corporate Crime column, Steven M. Witzel and Michael A. Kleinman of Fried, Frank, Harris, Shriver & Jacobson address how a Trump Administration might approach cybersecurity issues, particularly criminal prosecutions and regulatory oversight.

Terence E. Smolev and Christina Jonathan

Criminal Considerations for Fiduciaries

By By Terence E. Smolev and Christina Jonathan |

Terence E. Smolev and Christina Jonathan of Berkman Henoch Peterson Peddy & Fenchel write: Fiduciaries—both individual and corporate—run the risk of being charged with numerous crimes. Some crimes are intentionally committed, while some arise unintentionally but nevertheless create criminal liability. This article provides insight into some of the criminal charges fiduciaries may face.

Verizon Deal With Yahoo Highlights Emerging M&A Trend

By Jennifer Williams-Alvarez |

It remains to be seen whether Yahoo Inc.'s recently revealed data breaches will nix its sale to Verizon Communications. But whatever happens, M&A lawyers say the Yahoo-Verizon deal illustrates the increasing importance of addressing the risk of a data breach when negotiating an acquisition.

Corinne Ball

Filing Under Seal: The Confidential Commercial Information Exception

By Corinne Ball |

In her Distress Mergers and Acquisitions column, Corinne Ball writes: Parties concerned with protecting sensitive information should be ready to provide concrete, factual arguments in favor of filing documents under seal. Recent New York decisions, and the 'In re Motors Liquidation Company' decision in particular, provide guidance to practitioners as to possible effective strategies for protecting such sensitive information.

Elliot Pisem and David E. Kahen

Recent Decision's Implications for Goodwill Under IRC §1060

By David E. Kahen and Elliot Pisem |

In their Taxation column, David E. Kahen and Elliot Pisem write: Seemingly mundane questions concerning the proper allocation of consideration in determining the basis of purchased assets can have a surprisingly large impact. The authors discuss a recent decision of the Court of Federal Claims which illustrated precisely that point when tackling issues of goodwill under IRC §1060.

Joseph M. McLaughlin and Yafit Cohn

Demand Requirement Under Exchange Act §14(a)

By Joseph M. McLaughlin and Yafit Cohn |

In their Corporate Litigation column, Joseph M. McLaughlin and Yafit Cohn, of Simpson Thacher & Bartlett, examine 'In re The Home Depot, Inc. Shareholder Derivative Litigation', which weighed in on a recurring question regarding the demand requirement on which courts have differed: whether pre-suit demand is required for claims alleging a violation of Section 14(a) of the Securities Exchange Act of 1934. 'Home Depot' is the latest in a series of shareholder derivative actions arising from high-profile data breaches to be dismissed in recent years, with the court holding that Delaware's demand requirement applies equally to Section 14(a) claims.

Barbara M. Goodstein

Forest Capital: Is It a Case of UCC Article 8 Versus Article 9?

By Barbara M. Goodstein |

In her Secured Transactions column, Barbara M. Goodstein discusses the recent 'Forest Capital v. Blackrock' case, which brought to the fore the tension between UCC Articles 8 and 9—articles that have not always meshed seamlessly when it comes to the duties of securities intermediaries.

Laurie Webb Daniel of Holland & Knight.

Lawyers Appeal to U.S. Supreme Court to Reverse $2.7M Fee Sanction

By Katheryn Hayes Tucker |

Two Atlanta lawyers have asked the U.S. Supreme Court to overturn a $2.7 million attorney fee sanction against Goodyear Tire & Rubber Co. awarded by the Ninth Circuit, saying the punishment is excessive and violates established rules for making such awards.

Jason Forge, Robbins Geller Rudman & Dowd partner

Trump U. Plaintiffs Reaped 'Unprecedented' Return, Lawyer Says

By Amanda Bronstad |

One day after President-elect Donald Trump agreed to pay $25 million to settle lawsuits over Trump University, he posted on Twitter that the payment was a "small fraction of the potential award." But Jason Forge, one of three plaintiffs attorneys at San Diego's Robbins Geller Rudman & Dowd who was involved in the settlement talks, said the amount each class member can expect to receive is unprecedented.

John C. Coffee Jr.

Clawbacks in the Era of Trump

By John C. Coffee Jr. |

In his Corporate Securities column, John C. Coffee Jr. of Columbia University Law School examines executive compensation and clawback provisions, writing: The case for broad clawbacks comes into clearer focus when one looks closely at a series of recent corporate scandals, which each raise the same jaw-dropping question: What were those guys thinking?

Abbott Laboratories global headquarters in Abbott Park, Illinois

Abbott-Alere Suits Frame Battle Over Merger Gone Sour

By Tom McParland |

The Delaware Court of Chancery appears positioned to once again decide whether to keep afloat a once-promising multibillion-dollar merger that has since struck the rocks in a pair of dueling breach of contract lawsuits.

Mary Jo White.

SEC's White: No SEC Fiduciary Rule Coming Before January

By Melanie Waddell |

In her final House Financial Services panel testimony, White said that the agency is still ‘significantly’ underfunded.

U.S. Supreme Court

FAA Tells Justices to Pass on Flight-Sharing Startup's Case

By Marcia Coyle |

The U.S. Supreme Court should decline to take up a pioneering flight-sharing startup's battle with federal regulators, the Obama administration told the justices on Monday.

Headquarters of the U.S. Securities and Exchange Commission in Washington D.C.

New SEC 'Risk Alert' on Confidentiality Agreements

By Philip M. Berkowitz |

Employment Issues columnist Philip M. Berkowitz discusses a risk alert released by the SEC Office of Compliance Inspections and Examinations on Oct. 24 warning that the agency "is reviewing a variety of documents," including compliance manuals, codes of ethics, employment agreements, and severance agreements, for language that is contrary to SEC regulations on disclosure of information in pursuit of whistleblower claims. This includes policies that would prohibit disclosures of confidential information and require employees to notify or obtain consent from the employer prior to disclosing confidential information. The commission, he writes, is going after companies that have internal policies, practices or agreements that contain offending language.

U.S. Supreme Court in Washington, D.C. October 9, 2016.

Justices Are Divided on City's Standing to Bring Housing Suits

By Tony Mauro |

At issue in the consolidated cases 'Bank of America v. Miami' and 'Wells Fargo v. Miami' is a threshold question of standing, which does not often make headlines but is a crucial factor in gaining access to the courts for plaintiffs seeking redress from corporations. Rec

Can In-House Counsel Be Trusted With High-Stakes Litigation? Macy's Thinks So

By Kristen Rasmussen |

Brian Parsons has handled some big litigation assignments since joining the law department of Macy's Inc. in 2010, including appellate oral arguments and a deposition of a class representative in a nationwide class action. It's the kind of work often done by seasoned law firm partners, Parsons acknowledges.

Device Maker Gains Defense Verdict in Hip Implant Case

By Max Mitchell |

After several high-profile plaintiff's victories in hip implant cases, a Missouri jury has cleared a hip device manufacturer of allegations that its metal-on-metal device was defective.

U.S. Federal Trade Commission Building.

Federal Guidance Warns Against 'No Poaching' and 'Wage Fixing' Pacts

By Rebekah Mintzer |

The Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice have issued guidance signaling their interest in further cracking down on companies that make agreements with others that have the effect of limiting employees' mobility or keeping their wages down.

William F. Johnson

Avoiding Pitfalls Protecting Privilege and Confidentiality

By William F. Johnson |

In his Corporate Crime column, William F. Johnson writes: To maintain maximum protection of legal privilege and confidentiality, corporations and their counsel would be well-advised to take a hard look at their disclosures to regulators and monitors, as recent court decisions have indicated that even compelled, narrowly-tailored disclosure could erode the expectations of privilege and confidentiality historically associated with such disclosures.

Federal Circuit Softens Stance on Patent Eligibility

By Scott Graham |

For the fourth time this year, the U.S. Court of Appeals for the Federal Circuit has rescued software patents that a district found ineligible for patenting.

Supreme Court Offers Little Pep to Cheerleader Uniform Designers

By Scott Graham |

Appellate courts have wrestled for more than 20 years over where to draw the line between a copyrightable design and a useful article's function. The Supreme Court did not appear to be having it any easier on Monday.

Corinne Ball

Decision Challenges Efficacy of Liability Management Strategies

By Corinne Ball |

In her Distress Mergers and Acquisitions column, Corinne Ball of Jones Day discusses the recent Second Circuit decision in 'Chesapeake Energy v. Bank of New York Mellon Trust', writing: 'Chesapeake' involved a dispute between bondholders and the issuing company regarding whether a "make whole" or pre-payment premium was required when the bond issue was refinanced. While the issue was discreet, the efficacy of a resort to the court for a speedy determination is now subject to question if there is an appeal pending—even one without a stay pending appeal.

Final Approval Near in $14.7 Billion VW Emissions Accord, Judge Says

By Amanda Bronstad |

A federal judge said he planned to grant final approval to a $14.7 billion settlement with Volkswagen over an emissions scandal involving its diesel-powered vehicles.

Michelle Banks.

Legal Departments Have Leg Up on Firms in Closing Gender Pay Gap

By Kristen Rasmussen |

A $4 million settlement this year between a group of female in-house claims litigators and Farmers Group Insurance served to highlight that gender pay inequity—and court actions to challenge it—are increasingly found among the upper echelons of Corporate America.

AARP (American Association of Retired Persons) in Washington, D.C.

AARP Sues the EEOC to Enjoin Workplace Wellness Program Regulation

By Rebekah Mintzer |

The AARP filed a lawsuit in federal court in Washington on Monday seeking to enjoin final rules for workplace wellness programs recently issued by the Equal Employment Opportunity Commission, claiming they allow employers to illegally access private health information of employees and use the data in a potentially discriminatory manner.

Elliot Pisem and David E. Kahen

Characterization of Forfeited Deposits and Break Fees

By Elliot Pisem and David E. Kahen |

Elliot Pisem and David E. Kahen of Roberts & Holland discuss surprising and unfavorable results recently stemming from Internal Revenue Code §1234A, which governs the character of gain or loss attributable to the cancellation, lapse, expiration, or other termination of a right or obligation with respect to "property which is (or on acquisition would be) a capital asset."

Consumer Financial Protection Bureau building in Washington, D.C.

CFPB Predicts DC Circuit Ruling Won't Survive Challenge

By C. Ryan Barber |

A lawsuit in North Dakota federal district court could provide an early test of the reach of a federal appeals court decision that confronted what the judges called the “massive, unchecked power” of the Consumer Financial Protection Bureau.

Harry Shearer

'Spinal Tap' Actor Sues to Recoup Profits Owed From Movie

By Amanda Bronstadt |

Harry Shearer has filed a $125 million lawsuit against Vivendi S.A. over profits from the 1984 cult film "This Is Spinal Tap," in which he starred as fictional rock band member Derek Smalls.

U.S. Equal Employment Opportunity Commission building in Washington, D.C.

EEOC Takes on Emerging Issues in New Strategic Enforcement Plan

By Rebekah Mintzer |

The Equal Employment Opportunity Commission unveiled its latest strategic plan Monday, which will prioritize three new pieces of the agency's enforcement agenda: tackling nontraditional employment, protecting Muslims and Sikhs and ensuring the fairness of data-driven employment screening tools.

Joseph M. McLaughlin and Yafit Cohn

SOX Certification Requirement and Clawback Provision

By Joseph M. McLaughlin and Yafit Cohn |

Corporate Litigation columnists Joseph M. McLaughlin and Yafit Cohn provide insight from the case 'SEC v. Jensen', where the U.S. Court of Appeals for the Ninth Circuit provided needed guidance on the scope of distinct requirements under the Sarbanes-Oxley Act—the certification requirement and the clawback provision.

Facebook Takes Shot at IRS in Transfer-Pricing Feud

By Ross Todd |

Facebook Inc. is challenging the federal government's claim that it underpaid taxes, possibly by more than a $3 billion, due to the way it valued assets transferred to its Irish subsidiary in 2010.

U.S. Securities and Exchange Commission building in Washington, D.C.

No Violation 'Too Small' as SEC Sets Enforcement Record

By P.J. D'Annunzio |

The U.S. Securities and Exchange Commission saw a record number of enforcement actions this past fiscal year, a sign the commission is looking beyond headline-grabbing cases involving hundreds of millions of dollars, according to one attorney.

U.S. Department of Justice

Feds Accuse Aetna, Humana of Trying to 'Derail' Antitrust Challenge

By C. Ryan Barber |

U.S. Justice Department lawyers, repudiating the misconduct allegations that Aetna Inc. and Humana Inc. raised in the government's blockbuster antitrust suit, accused attorneys for the health insurers of a "transparent" push to unravel the case before it's ever presented to a judge.

Barbara M. Goodstein

When Can't a Creditor Credit Bid?

By Barbara M. Goodstein |

In her Secured Transactions column, Barbara M. Goodstein, through a discussion of a recent decision in the 'Aéropostale' case in the Southern District of New York, highlights issues and risks that arise when non-traditional lenders find themselves entangled with the debtor in more ways than just debt financing.

Justices Hunt for Intent in Bank Fraud Law

By Marcia Coyle |

The harrowing robbery of Kim Kardashian in Paris, Jesse James’ historical bank heists and even notorious bank robber Willie Sutton played into U.S. Supreme Court arguments on Tuesday as the justices wrestled with the level of intent needed to prove federal bank fraud.

Illinois Joins California in Suspending Business with Wells Fargo

By C. Ryan Barber |

The Illinois treasurer's office suspended billions of dollars in trading activity with Wells Fargo & Co. on Monday, becoming the second state to cut off business with the bank after its $185 million settlement over charges it created as many as 2 million unauthorized accounts.

A logo sign outside of a facility occupied by Aetna Inc. in Blue Bell, Pennsylvania.

Aetna Accuses Feds of 'Serious Delay and Misconduct' in Antitrust Case

By C. Ryan Barber |

In a request for sanctions filed in Washington federal district court, Aetna and Humana lawyers alleged the government withheld about 1 million documents. And they argued the government's alleged obstruction has "gravely undermined" the ability of the health insurers to mount a defense against claims from antitrust enforcers that Aetna's acquisition of Humana would drive up the price of insurance.