While the total number of filings declined in comparison to recent years, CFIUS's latest Annual Report to Congress highlights an uptick in penalties and an increased use of enforcement tools relating to national...more
The Situation: Boards of directors face increasingly intense workloads, pressure to respond to developments in real time, and exposure to a higher level of legal risk than ever before....more
The Situation: On June 21, 2024, the U.S. Department of the Treasury ("Treasury") issued a notice of proposed rulemaking to implement President Biden's executive order mandating national security review of certain U.S....more
The electric vehicle company Canoo went public in a de-SPAC transaction in December 2020. After its stock price fell, a stockholder in the SPAC who chose not to redeem his stock sued the SPAC board and its controller for...more
6/20/2024
/ Breach of Duty ,
Business Litigation ,
Corporate Counsel ,
Entire Fairness Standard ,
Fiduciary Duty ,
Investment ,
Manufacturers ,
Merger Agreements ,
Motion to Dismiss ,
Shareholders ,
Special Purpose Acquisition Companies (SPACs) ,
Stock Prices
On April 11, 2024, the Treasury Department announced a prepublication copy of a proposed rule amending the regulations of the Committee on Foreign Investment in the United States ("CFIUS") (the "Proposed Rule")....more
This week, the Federal Trade Commission (“FTC”) voted 3-2 along party lines to finalize a rule that bans noncompete clauses in employment agreements as a per se illegal “unfair method of competition” (“UMC”) under Section 5...more
The Situation: When the Delaware Supreme Court decided Kahn v. M&F Worldwide Corp. (MFW) in 2014 (88 A.3d 635 (Del. 2014)), it provided a pathway for business judgment review for "freeze-out" merger transactions involving...more
In February 2024, the Department of Justice (“DOJ”) announced the results of its 2023 False Claims Act (“FCA”) enforcement efforts. Through those efforts, it obtained more than $2.6 billion in overall recoveries, and of that...more
4/8/2024
/ Anti-Kickback Statute ,
Cybersecurity ,
Department of Health and Human Services (HHS) ,
Department of Justice (DOJ) ,
Enforcement Actions ,
False Claims Act (FCA) ,
Healthcare ,
Healthcare Fraud ,
Life Sciences ,
Medicare Advantage ,
OIG ,
Stark Law
TripAdvisor and its controlling corporation, both publicly traded Delaware companies, announced plans to convert to Nevada corporations. Shareholders sued to enjoin the conversions, alleging that the boards of directors had...more
The Background: After unsuccessfully trying to convince the special committee not to implement a plan to liquidate a business line, which the controlling stockholder believed would destroy value, the controlling stockholder...more
The Case: A Tesla stockholder sued Tesla's board of directors to rescind a performance-based stock option grant awarded to Elon Musk, Tesla's CEO. The option award was worth a total of $56 billion and offered the opportunity...more
2/19/2024
/ Board of Directors ,
Compensation & Benefits ,
Controlling Stockholders ,
Corporate Counsel ,
DE Supreme Court ,
Delaware ,
EBITDA ,
Elon Musk ,
Entire Fairness Standard ,
Equity Compensation ,
Executive Compensation ,
Tesla
In Short -
The Background: On October 10, 2023, the U.S. Securities and Exchange Commission (the "SEC") adopted amendments to the rules that govern beneficial ownership reporting for investors, marking the first update to...more
10/18/2023
/ Beneficial Owner ,
Business Ownership ,
Financial Markets ,
Internal Reporting ,
Investment Adviser ,
Investors ,
Regulatory Reform ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Securities Regulation ,
Shareholders
Under a new U.S. Department of Justice ("DOJ") policy related to mergers and acquisitions ("M&A"), DOJ will decline to prosecute an acquiring company for misconduct by an acquired company where the acquiring company timely...more
The Biden administration has issued a long-anticipated executive order targeting U.S. outbound investment in certain Chinese industries; however, significant steps remain before these measures are fully implemented....more
8/22/2023
/ Advanced Notice of Proposed Rulemaking (ANPRM) ,
Biden Administration ,
China ,
Comment Period ,
Executive Orders ,
Final Rules ,
Foreign Investment ,
National Security ,
Outbound Transactions ,
Popular ,
U.S. Treasury
The Federal Energy Regulatory Commission ("Commission" or "FERC"), sustaining a previous order, holds that the appointment of a non-independent director by an investor to a utility's board creates a per se affiliate...more
In Short -
SPAC Deals: Special purpose acquisition companies ("SPACs") boomed in 2020 as a means of taking early-stage private companies public. Following enhanced scrutiny from the Securities and Exchange Commission and...more
After a record-breaking 2021, deal activity in 2022 dropped by 37%, its largest year-over-year decline since 2001. Facing all the 2022 headwinds, including a difficult and uncertain financing market, the Ukraine war,...more
In Short -
The Situation: Until now, Delaware corporations could eliminate or limit monetary liability for breaches of the duty of care only by directors—but not officers. ...more
The enduring COVID-19 pandemic continued to impact corporate governance practices and trends in 2021, while other notable developments, including a surge in shareholder proposals, changes to the proxy rules, and increased...more
2/4/2022
/ Climate Change ,
Coronavirus/COVID-19 ,
Corporate Governance ,
Environmental Social & Governance (ESG) ,
Infectious Diseases ,
Proxy Season ,
Proxy Statements ,
Publicly-Traded Companies ,
Risk Management ,
Securities Regulation ,
Shareholder Meetings ,
Shareholder Proposals ,
Shareholders
2021 was the year in which superannuation funds took center stage in Australian take-private transactions. In what has been a record year for Australian M&A activity, the weight of money rolling into Australian superannuation...more
"Anti" M&A Activism While the absolute number of companies publicly facing activist demands regarding M&A transactions decreased in 2021 vs. 2020, M&A activism represented an increased share of overall economic demands of...more
China China has increased its efforts to scrutinize global transactions that may implicate national security concerns using its foreign investment security review ("FISR") process....more
Antitrust scrutiny of M&A remained high during 2021, and merging parties continued to make follow-on divestitures designed to obtain antitrust clearance for their main transaction....more
Europe saw a major increase in public M&A activity in 2021, fueled by cheap money and optimism as economies started to emerge from the worst effects of the pandemic. In particular, PE purchasers with dry powder to deploy and...more
What are the trends, risks, and opportunities in 2022?
As dealmakers recover from a record-breaking 2021, we expect another busy year in 2022. While risks in the financing market, the tightening of the regulatory...more