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Simplifying Section 16

On March 20, 2019, the Securities and Exchange Commission issued a release (the Release) adopting amendments to Regulation S-K in an effort to modernize and simplify disclosure requirements. The rule changes became effective...more

SEC Proposes to Modernize Disclosures of Business, Legal Proceedings and Risk Factors Under Regulation S-K

As reported in a press release issued by the Securities and Exchange Comission (the SEC) on Aug. 8, 2019, the SEC voted to propose amendments to modernize Regulation S-K disclosures, in particular, Item 101(a) (the...more

Delaware Court of Chancery Upholds a Seller’s Use of Contractual Provisions to Maintain Attorney-Client Privilege Over Premerger...

In a recent decision, the Delaware Court of Chancery ruled that the seller in a merger could enforce a provision in the merger agreement protecting its privilege over premerger emails with its counsel. Although pursuant to...more

Delaware Supreme Court Allows Caremark Breach of Loyalty Claim To Go Forward

On June 18, in Marchand v. Barnhill, the Delaware Supreme Court reversed a ruling by the Delaware Court of Chancery in a shareholder derivative suit alleging a breach of the duty of loyalty. While the standard for a...more

SEC Issues Statement on LIBOR Transition

On July 12, the staffs of the Division of Corporation Finance, Division of Investment Management, Division of Trading and Markets, and Office of the Chief Accountant (the “Staffs”) of the Securities and Exchange Commission...more

New Provisions Included in Credit Agreement to Sanitize the Vote of Net Short Lenders

In response to the increasingly aggressive activism by holders of net short positions that are in debt by way of credit default swaps, the leveraged loan market has responded with the inclusion in a recent market...more

Federal Reserve Board Chairman Powell Finds That Leveraged Lending Presents No Notable Risks to Financial Stability

Federal Reserve Board of Governors Chairman Jerome H. Powell, in remarks made yesterday in Amelia Island, Florida, at the 24th Annual Financial Markets Conference, sponsored by the Federal Reserve Bank of Atlanta, stated that...more

How the SEC’s Proposed Amendments to Financial Disclosures for Acquisitions Will Affect High-Yield Bond Offerings

On May 3, the Securities and Exchange Commission (the SEC) proposed amendments to its rules governing financial disclosures relating to acquisitions and dispositions of businesses....more

ARRC Details Fallback Language for Floating Rate Notes and Syndicated Loans

The Alternative Reference Rates Committee (ARRC) issued a press release detailing recommended fallback language for floating rate notes and syndicated loans....more

IMF Finds Leveraged Lending an Area of Concern, But Risks Are Mitigated

On April 10, 2019, the International Monetary Fund (IMF) held a press conference to discuss its semiannual Global Financial Stability Report (the GFSR), which assesses key risks facing the global financial system. The GFSR...more

Ranking Member of Senate Finance Committee Demands FSOC Address Risk in Leveraged Loan Market

In an April 11 letter to Treasury Secretary Mnuchin, in his capacity as chair of the  Financial Stability Oversight Council (FSOC), U.S. Sen. Sherrod Brown (D-Ohio), the ranking member of the U.S. Senate Committee on Banking,...more

SEC Settlement in the Curt Schilling 38 Studios Matter Highlights the Section 17(a)(2) Liability of Initial Purchasers in Rule...

On March 20, 2019, an agreement between Wells Fargo Securities LLC (Wells Fargo) and the Securities and Exchange Commission (SEC) to settle litigation involving failed video game company 38 Studios, LLC, headed by former...more

SEC Adopts Amendments to Implement Fast Act Disclosure Modernization and Simplification

On March 20, 2019, the Securities and Exchange Commission (the SEC) voted to adopt amendments to modernize and simplify disclosure requirements for public companies, investment advisers and investment companies. ...more

Renewed Spotlight on Rule 10b5-1 Insider Trading Plans: Promoting Transparent Standards for Corporate Insiders Act

On Jan. 28, 2019, the House of Representatives passed with overwhelming bipartisan support (413 to 3) the Promoting Transparent Standards for Corporate Insiders Act (H.R. 624) (the Act). If passed by the Senate, the Act would...more

FSB Launching Inquiry Into Leveraged Loans

The Financial Stability Board (FSB), an international body composed of representatives from governments, financial institutions, and international standard-setting, regulatory and central bank bodies that monitors and makes...more

Federal Reserve Chairman Powell Testifies That Leveraged Lending Does Not Pose a Systemic Risk to Banks

On Feb. 27, 2019, Federal Reserve Chairman Jerome Powell, during testimony before the House Financial Services Committee, was asked by Representative Gregory Meeks (D-NY, 5th District) whether the Federal Reserve “believes...more

SEC Proposes to Expand "Test the Waters" to All Issuers

Background On Feb. 19, 2019, the Securities and Exchange Commission (the SEC) voted to propose a rule and related rule amendments under the Securities Act of 1933, as amended (the Securities Act)...more

Fifth Circuit Disallows Make-Whole Payment in Bankruptcy

On Jan. 19, 2019, the U.S. Court of Appeals for the Fifth Circuit vacated a bankruptcy court decision awarding Ultra Petroleum Corp. noteholders $201 million in make-whole payments and $186 million in post-petition interest. ...more

FSB to Consider Enhanced Reporting Requirements for Non-Bank Providers of Leveraged Loans

The Financial Stability Board (FSB), an international body established in 2009 to implement and promote effective regulatory, supervisory and other financial sector policies, issued its most recent annual Global Monitoring...more

Delaware Court Strikes Down Federal Forum Selection Provisions in Certificates of Incorporation - Allows Plaintiffs to Bring...

In Sciabacucchi v. Salzberg, C.A. No. 2017-0931-JTL (Del. Ch. Dec. 19, 2018), the Delaware Court of Chancery invalidated provisions in the certificates of incorporation of three Delaware corporations — Blue Apron Holdings...more

Agencies Formally Confirm Lessened Consequences for Noncompliance With Leveraged Lending Guidance

On Sept. 11, 2018, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp., the National Credit Union Administration and the Bureau of Consumer...more

The New Delaware LLC “Divisive Merger” Provision – A Potentially Dangerous Loophole Under Debt Covenants

Effective August 1, 2018, the Delaware Limited Liability Company Act (the Delaware LLC Act) allows a Delaware limited liability company (an LLC) to divide into two or more LLCs and allocate the assets, liabilities, rights and...more

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