News & Analysis as of

Private Company Shares

TechConnect - Your Law Firm Link to Industry News - June 2017

by Mintz Levin on

Seniority Matters - There is little doubt that activity in the trading of secondary shares of private companies remains robust. Private companies are staying private longer and there seems to be an unlimited demand to buy...more

Securities Litigation Alert: District Court Says Indirect Purchasers of Shares Can Bring Fraud Claims Against Private Company and...

by Fenwick & West LLP on

In a case with important implications for late-stage private companies, a federal magistrate judge ruled last week that investors in funds holding private company securities can bring fraud claims against the issuer of the...more

Exempt Stock Compensation Limits May Increase

by Seyfarth Shaw LLP on

On April 4, 2017, the House of Representatives passed H.R. 1343, entitled the Encouraging Employee Ownership Act of 2017, increasing the number of shares that can be granted as compensation by an issuer to its employees...more

The Eighth Circuit Applies Insured vs. Insured Exclusion to Non-Insured Co-Plaintiffs

by Cozen O'Connor on

In a significant decision interpreting one of the most frequently litigated exclusions in the world of D&O insurance, the Eighth Circuit recently ruled that an Insured vs. Insured exclusion applied to an insured director’s...more

SEC Staff Issues Guidance Affecting the Registration of Securities for Resale on Form S-3

by Proskauer Rose LLP on

The staff of the Securities and Exchange Commission recently issued interpretive guidance relating to the registration of the resale of shares sold to an investor pursuant to a private placement, if the issuer concurrently...more

Court Confirms Award, Holds Arbitrator Did Not Err In Determining Vesting Status Of Former Executive’s Shares

by Carlton Fields on

The case arose from an arbitration initiated under an employment agreement, after the chief operating officer of ACP Investment Group resigned. Addressing a provision in the agreement that required the COO’s forfeiture of...more

Transactions Update: Purchase Price or Compensation

by McDermott Will & Emery on

Purchase Price v. Compensation - ..Companies are choosing to stay private significantly longer than the vesting period for stock options ..Recent proposals by private companies to buy back stock from current and...more

Introduction of the Empowering Employees through Stock Ownership (EESO) Act

On July 12, 2016, the Empowering Employees through Stock Ownership (EESO) Act (S. 3152) was introduced to the U.S. Senate by Sens. Mark R. Warner (D-VA) and Dean Heller (R-NV). The Act is intended to make it easier for...more

What is the RAISE Act and How Useful will it be to Sellers of Private Company Shares?

With the enactment of the Jumpstart Our Business Startups (JOBS) Act of 2012, private companies have the ability to defer an IPO and SEC reporting, and remain private longer than at any time in the past. One result, however,...more

Court Of Chancery Explains Partnership Distribution Rights And Power of GP

by Morris James LLP on

ESG Capital Partners II L.P. v. Passport Special Opportunities Master Fund L.P, C.A. 11053-VCL (December 16, 2015) This is an interesting decision for 2 reasons. First, the Court explains what might have seemed obvious...more

Blog: How Many Authorized Shares Should I Use In My Certificate of Incorporation?

by Cooley LLP on

One decision to make when incorporating is “How many shares do you want to authorize?” A common misconception is that the number of authorized shares (which appears in the certificate or articles of incorporation) is...more

Beware of the Use of Derivatives in the Purchase and Sale of Private Shares

by Mintz Levin on

The SEC is examining the use of derivatives in the secondary market for shares of private companies. The trading of shares of private companies remains robust, and we are writing this alert to remind everyone that whether you...more

Zhang: BC SC Refuses to Rectify Share Transfer

by Dentons on

In Zhang v. Canada (A.G.) (2015 BSCS 1256), the British Columbia Supreme Court refused to grant rectification of a transaction in respect of which the taxpayers had no common intention to avoid capital gains tax on a share...more

SEC Charges Directors, Officers and Major Investors for Failing to Update Disclosures Prior to Announcements of Going Private...

by Morrison & Foerster LLP on

On March 13, 2015, the U.S. Securities and Exchange Commission announced settlement proceedings against officers, directors, and major shareholders of several companies that were recently taken private for failing to update...more

Careful Estate Planning Required When Transferring S Corporation Shares to Trusts

by BakerHostetler on

S corporation shareholders must be careful not to inadvertently terminate their closely held company’s S election when engaging in estate planning....more

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