In a win for the Commodity Futures Trading Commission, a federal judge in Washington, D.C., on Tuesday mostly upheld rules on cross-border swaps, rejecting arguments by banking industry trade groups that the agency exceeded its authority by imposing new regulations.
In his Corporate Securities column, John C. Coffee Jr., the Adolf A. Berle Professor of Law at Columbia University Law School, writes: Pershing Square Capital Management L.P. and Valeant Pharmaceuticals International have entered into a short-term marriage of convenience to facilitate Valeant's hostile acquisition of Allergan in a $53 billion deal. As with many relationships, onlookers have questions.
A "theoretical defect" is an insufficient basis for a damages claim, Manhattan Supreme Court Justice Shirley Kornreich said in a decision dismissing a putative commercial class action suit over the delivery of supposedly inferior heating oil.
In a rare move, a Delaware Chancery Court ceded jurisdiction to another state on Monday, ruling that bylaws to select forums are valid even if they're adopted before litigation is filed, and even if they designate a Delaware company's out-of-state home turf as the forum.
Norwegian Cruise Line Holdings has agreed to purchase privately held Prestige Cruises International for $3.03 billion. Also, Amazon.com has announced that it would acquire video game streaming company Twitch Interactive Inc. in a $970 million cash deal.
In his Employment Issues column, Philip M. Berkowitz writes that most courts disfavor enforcement of non-competes, but in recent years, New York courts have provided avenues for enforcing such agreements. Texas has been a far tougher state in which to enforce non-competes. A recent decision, however, makes New York and Texas unlikely partners in the enforceability of non-compete agreements.
Southern District Judge Louis Stanton dismissed claims by the FDIC against Deutsche Bank, Royal Bank of Scotland, Credit Suisse and other banks that sold mortgage-backed securities, ruling that the FDIC waited too long to bring suit.
Adopting an argument that other courts have rejected, a federal judge in Manhattan ruled that the FDIC waited too long to sue Deutsche Bank, Royal Bank of Scotland, Credit Suisse and other banks that sold mortgage-backed securities.
In his Corporate Crime column, Steven Witzel writes: Much has been written on the nature and implications of Bitcoin and other digital currencies, including that they could mark the end of national currencies. The author focuses primarily on recent events in regulatory oversight and law enforcement scrutiny of Bitcoin and other virtual currencies.
The aluminum warehousing industry has been the target of critical media coverage and regulatory scrutiny. But it's not turning out to be fertile ground for antitrust litigation, as a Southern District judge made clear on Friday when she tossed claims against the Goldman Sachs Group Inc., JPMorgan Chase & Co. and Glencore plc.
Power generating company Dynegy Inc. plans to buy power plants and other assets from Duke Energy Corp. and private equity firm Energy Capital Partners in two separate deals worth a combined value of $6.25 billion.
Burger King Worldwide Inc. and Canadian chain Tim Hortons Inc. have agreed to an $11.4 billion tie-up that would send the combined company's headquarters north in what may be the most visible corporate tax inversion yet. Also, Roche Holding announced Monday its $8.3 billion acquisition of InterMune, a suburban San Francisco-based company lung disease drug developer.
In her Distress Mergers & Acquisitions column, Corinne Ball, a partner at Jones Day, writes: A competitor's attempt to take over a debtor through its debt may be subject to judicial scrutiny, as discussed in the decision issued by Bankruptcy Judge Shelley C. Chapman in the LightSquared case. Chapman concluded that separate competitor classification was appropriate, but denied designation and confirmation.
Southern District Judge Katherine Forrest has ruled that London Metal Exchange, a privately held for-profit company, is an "organ" of the U.K. government and therefore shielded by sovereign immunity from claims that it conspired with Goldman Sachs, JPMorgan Chase and others to restrain aluminum supplies and drive up prices.
Coca-Cola Company has agreed to purchase a 16.7 percent stake in Monster Beverage Corporation for $2.15 billion in cash as it looks to accelerate its growth in the booming energy drink business. Also, FleetCor Technologies Inc. has agreed to buy electronic payment processing company Comdata Inc. for $3.45 billion.
David E. Kahen and Elliot Pisem write about a recent First Circuit decision relating to the deductibility for income tax purposes of a portion of payments made in settlement of Medicare fraud claims under the False Claims Act.
In his Corporate Litigation column, Joseph M. McLaughlin analyzes the D.C. Circuit's decision in 'In re Kellogg Brown & Root,' which restores much of the predictability attendant to the availability of attorney-client privilege in the business setting and will likely be the leading decision for some time applying the touchstone principles of corporate attorney-client privilege set forth in 'Upjohn Co. v. U.S.'
In a reversal of trend of U.S. companies moving overseas to save on taxes, Walgreens said on Wednesday it would buy the stake in Alliance Boots it doesn't already own, for $15.3 billion in cash and stock but keep its current Illinois tax address once it takes full ownership of the chain. Also, NorthStar Realty Finance Corp. said on Tuesday it would acquire Griffin-American Healthcare REIT II Inc. for approximately $3.4 billion in cash and stock.
Russian steelmaker OAO Severstal has agreed to sell its North American subsidiaries to U.S. competitors Steel Dynamics and AK Steel Holding Corp. for a combined $2.3 billion. Also, Scientific Games Corporation said on Friday it has agreed to buy Bally Technologies for $5.1 billion in cash and debt.
In her Secured Transactions column, Barbara M. Goodstein, a partner at Mayer Brown, examines challenging questions that arise when assets are or become fixtures, and discusses the treatment generally of these assets under Article 9 of the Uniform Commercial Code.
An Second Circuit panel on Tuesday affirmed a big victory for Barclays plc and its lawyers at Boies, Schiller & Flexner in long-simmering litigation over the collapse of Lehman Brothers, ruling that Barclays is entitled to billions in disputed Lehman assets.
After winning the liability phase of its securities fraud case against Texas entrepreneur Samuel Wyly and the estate of his deceased brother Charles, the SEC has encountered a major setback in its bid to collect $1.4 billion from the duo.
Bargain retailer Dollar Tree Inc. is buying rival Family Dollar Stores Inc. for $8.5 billion in cash and stock in a bid to create one of the largest discount retailers in North America. Also, online property website Zillow will acquire rival Trulia for $3.5 billion.
Thao Do and James Walker, partners at Richards Kibbe & Orbe, discuss (i) the implications of 'Troice' for third-party advisors with respect to aiding and abetting claims in class actions and (ii) how law firms can limit increased exposure to third-party liability.
In their Corporate Governance column, David A. Katz, a partner at Wachtell, Lipton, Rosen & Katz, and Laura A. McIntosh, a consulting attorney for the firm, write: The tactics being used by today's activist investors in their approaches to corporate targets are unprecedented. Boards should be forewarned and forearmed as they pursue their plans for long-term value creation in the current, precarious environment that clearly favors the activist investor.
Italian lottery operator GTECH S.p. has announced that it would acquire Las Vegas-based slot machine maker International Game Technology for $6.4 billion. Albemarle Corporation announced that it plans to acquire competitor Rockwood Holdings for $6.2 billion in a cash and stock deal, a move that will combine two of the world's largest specialty chemical companies.
Reynolds American Inc., maker of Pall Mall and Camel cigarettes, has agreed to buy Lorillard Inc. for $27.4 billion, including debt. If completed, the merger would create a powerful rival to the largest tobacco company in the U.S.
After 14 years of litigation, 200 days of deposition testimony and a wealth of attorneys fees, Convolve Inc.'s billion-dollar infringement case against Seagate Technology and Compaq Computer Corporation (now Hewlett-Packard Company) may finally be at an end.
In his Corporate Securities column, John C. Coffee Jr., the Adolf A. Berle Professor of Law at Columbia University Law School and Director of its Center on Corporate Governance, writes: The transition to dark pools, high frequency trading, and the maker/taker model has come since the adoption of Regulation NMS in 2007. That is one cause, but not the deepest cause. With the privatization of securities markets, markets are no longer self regulators in any meaningful sense, but instead are aggressive profit maximizers. That cannot be changed, but it states the case for closer regulation.
In his Employment Issues column, Philip M. Berkowitz writes that although the Supreme Court's recent decision in 'Fifth Third Bancorp v. Dudenhoeffer' didn't garner the same attention as other employment cases, it may be the most significant, possibly putting at risk the right of Employee Stock Ownership Plan fiduciaries to invest in company stock.
The car service Uber has agreed to limit prices during emergencies, natural disasters or other unusual market disruptions consistent with New York's law against price gouging, the company and state attorney general said Tuesday.
For three years, the patent holder DietGoal Innovations has sued dozens of food and media companies all over the country, alleging infringment of its patent for a system of computerized meal planning—a patent Southern District Judge Paul Engelmayer now says is invalid.
The Justice Department's $8.9 billion settlement with BNP Paribas gave prosecutors a chance to argue that they're not afraid to get tough on big banks. But it also highlighted the roles of two large law firms that counseled BNP on transactions at the heart of the government's case, suggesting that the French Bank relied on questionable advice to justify violating U.S. sanctions regimes.
In his Corporate Crime column, William F. Johnson, a partner at King & Spalding, writes: As the SEC wades into the regulatory pool on high frequency trading, all eyes will be focused on whether subsequent regulations are appropriately and narrowly tailored to promote market stability without limiting the advances that technology has provided for market access and structure.
In her Distress Mergers & Acquisitions column, Corinne Ball, a partner at Jones Day, discusses 'In re LightSquared', in which an activist distressed investor faces the subordination or disallowance of his claim due to what the bankruptcy court determined was the investor's inequitable conduct with the intent to manipulate the bankruptcy proceedings and the bankruptcy court.
Private equity firm Apax Partners has agreed to sell its majority stake in Advantage Sales and Marketing to two other private equity firms, Leonard Green & Partners and CVC Capital Partners. Wisconsin Energy Corporation has announced it will buy energy holding company Integrys Energy Group for $9.1 billion, including debt, a deal that would expand the company's geographic base.
In their Taxation column, Elliot Pisem and David E. Kahen, members of the law firm of Roberts & Holland, write: Rev. Rul. 2014-18 does not appear to reflect any major change in IRS thinking with respect to the treatment of options and SARs under §457A as previously expressed in IRS Notice 2009-8.
In the latest, and perhaps largest, example of a U.S. company ditching its borders, medical device maker Medtronic Inc. announced Sunday it would purchase Dublin-based Covidien in a $42.9 billion deal that would move the combined company to Ireland. Also, Priceline Group said Friday it has agreed to buy online restaurant-reservation service OpenTable.com for $2.6 billion in cash.
In his Corporate Litigation column, Joseph M. McLaughlin writes: Last month, the Delaware Supreme Court ruled that a board-approved provision in a non-stock corporation's bylaws shifting legal expenses in intra-corporate litigation to unsuccessful claimants can be valid in Delaware. Although 'ATP Tour v. Deutscher Tennis Bund' pertained to a non-stock corporation, the decision has provoked an outpouring of debate because its reasoning applies equally to stock corporations.
The D.C. Circuit on Tuesday rebuffed Wells Fargo Bank's request to bar all claims against it in a suit over its mortgage practices brought by the U.S. Attorney's Office for the Southern District just six months after the bank paid $5 billion to settle similar claims in a suit brought by the federal government, 49 states and the District of Columbia.
Moving to expand its product offerings aimed at treating hepatitis C, pharmaceutical giant Merck & Co. announced Monday that it has agreed to buy Cambridge, Ma.-based Idenix Pharmaceuticals, Inc., for $3.85 billion.
Although huge sums have been set aside to reward those who report wrongdoing in the financial markets—$739 million is sitting there, waiting to be paid out—awards to date have barely dented those accounts, according to a new report.
Ventas said on Monday that it will acquire American Realty Capital Healthcare Trust in a stock-and-cash transaction valued at $2.6 billion. Also, four firms have landed roles in connection with the sale of 24 Hour Fitness by Forstmann Little & Co., the New York-based buyout shop that has been liquidating its portfolio following the November 2011 death of its cofounder.
In her Secured Transactions column, Barbara M. Goodstein, a partner at Mayer Brown, explores the characteristics of unitranche credit facilities, the advantages of those structures, and the issues and uncertainty that surround them.
By Christopher L. Garcia and Amanda Burns Shulak
In their White-Collar Crime column, Christopher L. Garcia and Amanda Burns Shulak of Weil, Gotshal & Manges write: Recently, the SEC has had some missteps, most notably at trial. The losses in those cases were likely the result of the SEC having brought enforcement actions for conduct that was not provable based on the available evidence. Each of the cases suffered from proof issues that made them difficult cases to win.
Although agreeing that an order for sanctions against a Jordanian bank for not producing records in a lawsuit filed by terrorism victims was flawed, the DOJ is arguing that it would be premature for the U.S. Supreme Court to hear the bank's appeal.
Even amid the ongoing backlash against patent trolls, FindTheBest.com's response to infringement claims by accused troll Lumen View Technology stands out from the crowd, with FindTheBest's CEO vowing to "slaughter" Lumen View in court.
At least a dozen firms are advising on telecommunications giant AT&T's proposed $48.5 billion acquisition of DirecTV. Also, Darden Restaurants has agreed to sell Red Lobster to private equity firm Golden Gate Capital for $2.1 billion in cash.
Apple Inc. has lost a skirmish in its battle to rein in the company's court-appointed antitrust monitor, Michael Bromwich, failing to persuade a judge to slash one of Bromwich's recent bills or to limit his access to Apple top brass.
Two global legal giants are raising their mugs to the formation of a $5 billion coffee joint venture between Mondelez International and rival D.E Master Blenders 1753, and Skadden Arps has snagged the lead role representing Hillshire Brands on a $6.6 billion acquisition of Pinnacle Foods.
In his Corporate Securities column, John C. Coffee Jr., the Adolf A. Berle Professor of Law at Columbia University Law School and Director of its Center on Corporate Governance, writes: Two recent developments have changed the playing field of corporate governance. In their wake, every pundit has announced that this is the heyday of hedge fund activism.
Legal battles over Facebook Inc.'s initial public offering continue to dog the social media company and its bankers, which tried and failed to escape a consolidated securities class action over the IPO in December.
In his Employment Issues column, Philip M. Berkowitz writes: Despite the significant brouhaha over the agreements at issue in 'eBay,' the settlement with the DOJ is far from a death knell for no-poaching agreements.
In his Corporate Crime column, Steven Witzel, a partner at Fried, Frank, Harris, Shriver & Jacobson, writes: If sustained, the decision in 'United States v. Grimm' may significantly limit the government's ability to prosecute otherwise time-barred actions and provides defendants with new grounds to assert statute of limitations defenses.
The healthcare industry continues to dominate the M&A market with the announcement last week that Zimmer Holdings has agreed to acquire rival medical device specialist Biomet Inc. The cash-and-stock deal is worth $13.35 billion. Also, six major firms have tuned in for the latest episode in Comcast's dramatic $45 billion acquisition of Time Warner Cable.
Investors who put their money in a fund that invested heavily with Bernard Madoff cannot get damages from the administrator of the fund, Bank of New York Mellon, a Manhattan commercial division judge has ruled, dismissing a suit filed by a group of law firms on behalf of a class of investors.
In her Distress Mergers and Acquisitions column, Corinne Ball, a partner at Jones Day, writes about a recent Third Circuit decision in which the court held that prepetition personal injury claims that relied upon the "mere continuation" theory of successor liability were, in reality, causes of action that were property of the bankruptcy estate and thus eligible for settlement, release and discharge through the bankruptcy court.
A Southern District judge has dismissed a $124 million fraud case in which two asset management firms claimed that Twitter bamboozled them into creating an artificial market for its private shares, thereby making it easier for Twitter to justify its $10 billion valuation.
Freshfields Bruckhaus Deringer and Hogan Lovells are helping Novartis undergo a massive restructuring involving a series of transactions worth more than $20 billion. Also, Post Holdings, maker of cereal and other dry goods, confirmed last week that it has agreed to buy Michael Foods from its private equity owners for $2.45 billion.
In their Taxation column, Elliot Pisem and David E. Kahen, members of Roberts & Holland, write about a recent decision of the Court of Federal Claims relating to a court-ordered forfeiture by a corporate executive found to have engaged in illicit insider trading.
Following a series of multimillion-dollar thefts and losses, federal regulators want to step up their oversight of virtual currency bitcoin. But bitcoin—a nationless digital money that uses cryptography to control its creation and transaction—doesn't fit neatly in any regulatory box.
In-house legal departments saw the number of regulatory actions increase in U.S. companies for the third year in a row, according to the latest Annual Litigation Trends survey released Tuesday by Norton Rose Fulbright. About 20 percent of responders said their companies faced a regulatory/investigation matter in 2013, up from 9 percent in 2012.
Another employment class action brought on behalf of unpaid interns cleared a hurdle last week, when a Southern District judge conditionally certified a class of interns suing Viacom Inc. But plaintiffs lawyers behind a crush of intern cases still have to contend with the Second Circuit, which is considering two appeals that could derail the litigation—or open the floodgates for even more claims.
Buyout firm The Blackstone Group has agreed to buy Denver-based industrial manufacturer Gates Global from its current owners in a $5.4 billion deal announced Friday. Also, India's Sun Pharmaceutical Industries will become the world's fifth-largest generic drug maker with its $3.2 billion buy of struggling rival Ranbaxy Laboratories.
In his Corporate Litigation column, Simpson Thacher & Bartlett partner Joseph M. McLaughlin reviews recent decisions which, while not upending familiar principles of privilege and work product protection available in the internal investigation context, remind clients and practitioners that immunity from disclosure will not attach or be preserved without careful attention to the structure and conduct of internal investigations.
In her Secured Transactions column, Barbara M. Goodstein, a partner at Mayer Brown, writes: The growing divergence between New York UCC law and the remainder of the states should be of enormous concern. As New York statutes lag further behind other states, the incidence and risk of erroneous UCC section cross-references in legal documents and memoranda rises.
Hewlett-Packard Co. shocked investors in August 2011, when former CEO Leo Apotheker pulled the plug on the company's much-touted WebOs operating system and signaled a wholesale shift in business strategy. A month later, Apotheker was ousted, and HP was hit with a securities fraud class action accusing the company of snookering shareholders into thinking it planned to build a vast "ecosystem" of millions of WebOs-enabled devices, including tablets, PCs and printers.
Privately-held Swiss trading house Mercuria Energy Group has agreed to buy JPMorgan Chase's physical commodities trading unit in a deal worth $3.5 billion. Also, Media General announced Friday that it has agreed to acquire LIN Media LLC in a $1.6 billion cash-and-stock deal that, if completed, will create the second-largest local television broadcasting company in the country.
In their Corporate Governance column, David A. Katz, a partner at Wachtell, Lipton, Rosen & Katz, and Laura A. McIntosh, a consulting attorney for the firm, write: Shareholder activism is poised to have an even greater impact in the M&A context this year and companies should be aware of and prepared for this possibility if they pursue an M&A transaction.
In a speech last week before the Consumer Federation of America, U.S. Securities and Exchange Commission head Mary Jo White touted the agency's efforts to protect individual investors, describing the mission as "a constant focus of the SEC."