Amendments were adopted to restore market practices impacted by three recent Court of Chancery decisions.
Amendments simplify the approval of a merger by a board of directors, thereby removing the potential for certain...more
The Delaware Court of Chancery issued an order in Palkon v. Maffei on February 20, 2024, holding that a decision by the boards of directors and the controller of TripAdvisor, Inc. (“TripAdvisor”) and Liberty TripAdvisor...more
5/14/2024
/ Appeals ,
Board of Directors ,
Commercial Litigation ,
Controlling Stockholders ,
Corporate Governance ,
DE Supreme Court ,
Delaware General Corporation Law ,
Incorporation ,
Interlocutory Orders ,
Motion to Dismiss ,
Shareholder Litigation
Delaware Supreme Court rejects attempt to limit MFW to controller buyout transactions.
Supreme Court instead holds that all of MFW’s requirements for shifting the standard of review from entire fairness to business...more
The Delaware Court of Chancery issued a post-trial opinion, on January 30, 2024, in Tornetta v. Musk, holding that Tesla’s board of directors (the “Board”) breached its fiduciary duties in awarding CEO Elon Musk (with the...more
2/22/2024
/ Appeals ,
Board of Directors ,
Breach of Duty ,
Business Litigation ,
Commercial Litigation ,
Controlling Stockholders ,
Delaware General Corporation Law ,
Elon Musk ,
Equity Compensation ,
Fiduciary Duty ,
Rescission ,
Shareholder Votes ,
Shareholders ,
Tesla
The past year saw significant developments in the Delaware courts for books and records inspection demands pursuant to Section 220.
In a first-of-its-kind decision, the Court rejected an inspection demand as lacking a...more
Revised deadlines for initial Schedule 13D and Schedule 13G filings:
Schedule 13D: within five business days (rather than 10 calendar days) after crossing the 5% beneficial ownership threshold or losing eligibility to file...more
10/18/2023
/ Amended Rules ,
Beneficial Owner ,
Compliance ,
Consumer Protection Act ,
Deadlines ,
Dodd-Frank ,
Institutional Investors ,
Investment Adviser ,
Passive Investments ,
Reporting Requirements ,
Schedule 13D ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act of 1934 ,
Security-Based Swaps
The SEC adopted new rules requiring public companies to (i) disclose material cybersecurity incidents on Form 8-K within four business days of determining that an incident is material, and (ii) periodically disclose their...more
8/8/2023
/ Cyber Incident Reporting ,
Cybersecurity ,
Disclosure Requirements ,
Form 10-K ,
Form 8-K ,
Investment Company Act of 1940 ,
Popular ,
Proposed Rules ,
Publicly-Traded Companies ,
Regulation S-K ,
Risk Management ,
Securities and Exchange Commission (SEC)
The Delaware Supreme Court affirms the Court of Chancery’s determination that Tesla’s acquisition of SolarCity was the result of fair dealing, reflected a fair price, and was entirely fair—even when the process was...more
Issuers must disclose daily quantitative share repurchase information on a quarterly or semi-annual basis depending on the type of issuer, but not after every repurchase as had been initially proposed -
Issuers must...more
5/15/2023
/ 10b5-1 Plans ,
Disclosure Requirements ,
Federal Register ,
Final Rules ,
Foreign Private Issuers ,
Policies and Procedures ,
Regulation S-K ,
Safe Harbors ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Stock Repurchases
New conditions to the availability of the affirmative defense under the Rule 10b5-1(c)(1), including a cooling-off period before trading can begin for directors, officers, and other persons (other than issuers) -
New...more
The Securities and Exchange Commission (“SEC”) on October 26, 2022, adopted final rules1 directing national securities exchanges and associations,2 to establish listing standards that require public companies to develop and...more
11/23/2022
/ Clawbacks ,
Compensation ,
Disclosure Requirements ,
Dodd-Frank ,
Final Rules ,
Incentive Compensation ,
Indemnification ,
Insurance Industry ,
Reporting Requirements ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act
The U.S. Securities and Exchange Commission (the “SEC”) on August 25, 2022 finalized the “Pay-versus-Performance” disclosure requirements (the “Final Rules”)1 that originally were proposed on April 29, 2015 (the “Proposed...more
9/15/2022
/ CD&A ,
Compensation ,
Disclosure Requirements ,
Dodd-Frank ,
Executive Compensation ,
Final Rules ,
GAAP ,
Performance Standards ,
Principle Officers ,
Securities and Exchange Commission (SEC) ,
Total Shareholder Return (TSR)
The Securities and Exchange Commission (SEC) on January 28, 2022, reopened the comment period with respect to its pending “pay versus performance” proposal (Proposed Rule), which would generally require public companies to...more
2/11/2022
/ CD&A ,
Comment Period ,
Compensation & Benefits ,
Corporate Governance ,
Disclosure Requirements ,
Dodd-Frank ,
Executive Compensation ,
Pay-for-Performance ,
Publicly-Traded Companies ,
Regulatory Agenda ,
Securities and Exchange Commission (SEC) ,
Total Shareholder Return (TSR)
As expected, the U.S. Securities and Exchange Commission released two significant rule proposals for issuers on December 15, 2021—one regarding issuer share repurchases and the other regarding issuer and director and officer...more
On August 6, 2021, the U.S. Securities and Exchange Commission approved rule changes proposed by The Nasdaq Stock Market LLC related to board diversity and disclosure. The board diversity proposal, as approved by the SEC,...more
On September 23, 2020, the United States Securities & Exchange Commission announced the adoption of amendments to its shareholder proposal rule, Rule 14a-8, aimed at modernizing the requirements for submitting (and...more
On May 21, 2020, the U.S. Securities and Exchange Commission (the “SEC”) announced adoption of updates to the financial disclosure requirements of Regulation S-X and related rules applicable to the acquisition and disposition...more
6/2/2020
/ Acquisitions ,
Amended Rules ,
Asset Test ,
Business Development Companies ,
Disclosure Requirements ,
Dispositions ,
Final Rules ,
Financial Reporting ,
Income Test ,
Investment Test ,
Publicly-Traded Companies ,
Registered Investment Companies (RICs) ,
Regulation S-X ,
Securities and Exchange Commission (SEC)
The uncertain economic environment surrounding the COVID-19 crisis has triggered a sharp decline in trading prices for the equity and debt securities of many business development companies (“BDCs”) and closed-end funds...more
5/19/2020
/ Business Development Companies ,
Closed-End Funds ,
Coronavirus/COVID-19 ,
Corporate Issuers ,
Debt Repurchasing ,
Equity Repurchasing ,
Financial Industry Regulatory Authority (FINRA) ,
Insider Trading ,
International Tax Issues ,
Main Street Lending Programs ,
Market Manipulation ,
Restrictive Covenants ,
Risk Management ,
Rule 10b-5 ,
Securities and Exchange Commission (SEC) ,
Securities Exchange Act ,
Tender Offers
The novel coronavirus (COVID-19) is interfering with the normal function of businesses around the world, including in the form of travel restrictions, quarantines, office closures and employees being encouraged (or required)...more
The Delaware Chancery Court rejected an attempt by Tesla’s Board of Directors to dismiss a challenge to CEO Elon Musk’s “extraordinary” 2018 compensation package. Because Musk is also Tesla’s controlling stockholder, the...more
10/21/2019
/ Board of Directors ,
Breach of Duty ,
Burden-Shifting ,
Business Judgment Rule ,
Compensation Committee ,
Conflicts of Interest ,
Controlling Stockholders ,
Elon Musk ,
Entire Fairness Standard ,
Executive Compensation ,
Fiduciary Duty ,
MFW ,
Motion to Dismiss ,
Ratification ,
Shareholder Litigation ,
Tesla
The California state legislature on August 30, 2018 approved SB 826, a bill which, if signed into law by the state governor, will require public companies headquartered in California to have a minimum number of female...more
9/5/2018
/ Article I ,
Board of Directors ,
Chamber of Commerce ,
Constitutional Challenges ,
Diversity ,
Equal Protection ,
Proposed Legislation ,
Publicly-Traded Companies ,
Sex Discrimination ,
State Constitutions ,
State Legislatures
The U.S. Securities and Exchange Commission recently announced1 an expansion of nonpublic review of draft registration statements for initial public offerings, initial registrations of classes of securities under Section...more
The Public Company Accounting Oversight Board (PCAOB) adopted a new auditor reporting standard on June 1, 2017. If approved by the U.S. Securities and Exchange Commission (SEC), the new standard would impose additional...more
6/9/2017
/ Amended Rules ,
Audit Reports ,
Auditors ,
Audits ,
Disclosure ,
Financial Statements ,
Investors ,
PCAOB ,
Publicly-Traded Companies ,
Securities and Exchange Commission (SEC) ,
Transparency
The U.S. House of Representatives’ Financial Services Committee approved the Financial CHOICE Act of 2017 last Thursday, clearing it for a vote before the entire House. The bill contemplates sweeping changes affecting a range...more
It is common practice for purchase agreements in private company M&A transactions to contain one set of rules to determine and resolve disputes regarding a post-closing purchase price adjustment and a separate, often vastly...more
4/13/2017
/ Acquisitions ,
Breach of Contract ,
Buyers ,
Closing Adjustment Cost ,
Contract Drafting ,
Contract Terms ,
GAAP ,
Mergers ,
Non-GAAP Financial Measures ,
Nuclear Power ,
Power Plants ,
Power Purchase Agreements ,
Purchase Agreement ,
Purchase Price ,
Representations and Warranties ,
Sellers