Corporate Update

David A. Katz and Laura A. McIntosh

Cybersecurity Must Be High on the Board Agenda

By David A. Katz and Laura A. McIntosh |

In their Corporate Governance column, David A. Katz and Laura A. McIntosh write: Recent global cyberattacks have rudely reminded corporate America that cybersecurity risk management must be at the top of the board of directors' corporate governance agenda. Companies have no choice but to prepare proactively.

John C. Coffee Jr.

Financial CHOICE Act of 2017: Will Collective Amnesia Triumph?

By John C. Coffee Jr. |

In his Corporate Securities column, John C. Coffee Jr. discusses the core ideas of the CHOICE Act, an "unedited grab bag (extending for nearly 600 pages) of pet ideas and recycled bills." Everyone recognizes that Dodd-Frank could be streamlined and simplified, but gutting it is a different matter.

Philip Berkowitz

Investigations Guidance for Multi-Nationals

By Philip M. Berkowitz |

In his Employment Issues column, Philip M. Berkowitz writes: Multinational companies should have in place well considered protocols for investigating claims of alleged internal wrongdoing. Investigation protocols should provide guidelines that assign investigation roles and responsibilities among various key stakeholders, which may include the general counsel, the chief compliance officer, chief risk officer, head of human resources, and others.

Steven M. Witzel and Nicole R. Love

Should Culpable Whistleblowers Be Eligible for SEC Whistleblower Awards?

By Steven M. Witzel and Nicole R. Love |

In their Corporate Crime column, Steven M. Witzel and Nicole R. Love of Fried, Frank, Harris, Shriver & Jacobson survey and analyze current SEC regulations concerning culpable whistleblowers, SEC orders providing monetary awards to whistleblowers under the program, Chairman Hensarling's proposed legislation, and the potential implications of eliminating monetary awards to culpable whistleblowers. They also present a potential path forward in the form of a compromise.

Corinne Ball

Mootness Protections May No Longer Preclude Review or Protect Counsel

By Corinne Ball |

In her Distress Mergers and Acquisitions column, Corinne Ball writes: The importance of finality of bankruptcy court orders has been confirmed once again. Statutory mootness protecting §363 sales may not prevent or preclude an appeal or subsequent lawsuit, but the good faith purchaser and the transfer nevertheless continue to be insulated from appellate relief or collateral attack. The extent of that protection to other parties is unclear.

Elliot Pisem and David E. Kahen

The Accumulated Earnings Tax: Back From the Grave?

By Elliot Pisem and David E. Kahen |

In their Taxation column, Elliot Pisem and David E. Kahen discuss the structure of the accumulated earnings tax and Chief Counsel Advice 201653017 (Dec. 30, 2016), a memorandum which concluded that the AET may apply to a corporation that lacks ready access to cash or other liquid assets for distribution.

Joseph M. McLaughlin and Yafit Cohn

Scope of the Dodd-Frank Act's Whistleblower Protection

By Joseph M. McLaughlin and Yafit Cohn |

Joseph M. McLaughlin and Yafit Cohn of Simpson Thacher & Bartlett discuss a question generating dispute: Is a corporate employee who reports an employer's possible violation of the securities laws to a supervisor or internal compliance officer—but not to the SEC—considered a "whistleblower" entitled to protection from retaliation under Dodd-Frank? Courts that have considered this question have reached differing conclusions.

Barbara M. Goodstein and Howard Rosen

Financing Rolling Stock: Luxembourg Rail Protocol Steams Ahead

By Barbara M. Goodstein and Howard Rosen |

In this Secured Transactions column, Barbara M. Goodstein and Howard Rosen discuss the Luxembourg Rail Protocol, how it compares to the Protocol on Matters Specific to Aircraft and its relevance to the United States.

Carlos J. Cuevas

Bankruptcy Code Section 548(c) and the Good Faith Defense

By Carlos J. Cuevas |

Carlos J. Cuevas analyzes Bankruptcy Code §548(c), which provides a transferee, the recipient of an alleged fraudulent conveyance, with an affirmative defense to the fraudulent conveyance action.

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.