In New Enterprise Associates 14, L.P. v. Rich, the Delaware Court of Chancery held that a covenant not to sue for breach of fiduciary duty, which was contained in a stockholder's agreement and modeled after the NVCA model...more
Suppose that the articles of incorporation provide that a corporation will have two classes of shares, with one class entitled to 90% of all dividends declared and assets upon liquidation and the other class to the remaining...more
Despite political and economic uncertainties, markets and deal activity were resilient in 2019, and strong fundamentals remain in place heading into 2020. Companies continue to face a challenging litigation and enforcement...more
In recent years, fintech has been an attractive sector for growth capital, as evidenced by robust investment and M&A valuations in the sector. While interest remained high in 2019, deal volumes began to level off early in the...more
Here are ten common questions I receive from clients about issuing equity (stock or options) to service providers (advisors/directors/officers/employees/consultants)...more
Add the Eight Circuit to a growing list of courts that have found that a plan of reorganization which proposes better treatment for creditors who have agreed to purchase any leftover securities in an offering (a “backstop...more
In common usage, a founder is an individual who creates or helps create a company, but in legal terms, there is no such thing as a “founder” or “founder’s stock,” only early participants in a company’s organization and...more
Cedarview Opportunities Master Fund L.P. v. Spanish Broadcasting System Inc. C.A. 2017-0785-AGB (August 27, 2018) - How to interpret the provisions of preferred stock is often a difficult task. Any preference must be...more
QC Holdings Inc. v. Allconnect Inc., C.A. 2017-0715-JTL (August 27, 2018) - This decision on a undisputed factual record interpreted a contractual right to put stock by rejecting one side’s argument as “commercially...more
QC Holdings Inc. v. Allconnect Inc., C.A. No. 2017-0715-JTL (Del. Ch. Aug. 28, 2018) - This decision is necessary reading for drafters of redemption rights. It involves the interpretation of a redemption rights agreement...more
Venture capital firms and their director designees on portfolio company boards can find themselves stuck between their fiduciary duty to common shareholders and the terms of preferred investment documents. Before any other...more
A recent decision of the Delaware Court of Chancery (the “Court”) places certain fiduciary constraints on a company’s ability to satisfy its obligations to its preferred equity holders. While investors often seek to acquire...more
Greenlight Capital’s David Einhorn is pushing GM to split its common stock into two classes—one for dividends and the other for all additional earnings—in an effort to boost the carmaker’s market cap. GM’s not on board....more
Alas, poor Erlich! We knew him; ‘a fellow of infinite jest, of most excellent fancy; he hath borne us on his back a thousand times; and now,’ as Jared poetically recounts, “Erlich’s Bachmanity boondoggle has led to his being...more
What may be standard in the corporate world can severely disrupt set-aside status in the highly-regulated government contract space. Take the recently-decided case of Precise Systems. ...more
- In this Issue: - Welcome - About Us - Results Of 2015 SelectUSA Summit - 2015 Upcoming Events - RAISING CAPITAL: Simplifying the U.S. Capital Markets - Recent FDI Success Stories - FDI...more
In my recent article about the impact of separate stock classes on veteran-owned firms, I discussed how having more than one class of voting stock can complicate an ownership analysis under both the Department of Veterans...more
Chapter 75 claims have rarely fared well in the Business Court, though there is not much doubt about why they are included in almost every Complaint in the Court. The prospect of treble damages (per G.S. §75-16) and...more
A recent post-trial decision by Vice Chancellor J. Travis Laster of the Delaware Court of Chancery puts directors serving as designees of preferred investors on notice that they must attempt to maximize value for common...more