Welcome to the latest edition of Fenwick’s Securities Law Update....more
On April 4, 2024, the Delaware Supreme Court issued its opinion in In re Match Group, Inc. Derivative Litigation, clarifying that the heightened entire fairness standard of review applies to judicial review of any transaction...more
On January 30, 2024, the Chancellor of the Delaware Court of Chancery struck down the $55.8 billion compensation plan that Tesla, Inc.’s board of directors had granted to Tesla’s well-known CEO, Elon Musk, finding that the...more
On July 3, 2023, FERC affirmed its earlier determination that Bluescape Energy Partners, LLC’s (“Bluescape”) appointment of a non-independent director to Evergy Inc.’s (“Evergy”) Board of Directors overcomes the rebuttable...more
The Ministerial Committee for Legislation has recently re-approved the draft amendment to the Israeli Companies Law. The aim of this amendment is to improve the corporate governance rules applicable to companies with no...more
In this paper, Seven Gaping Holes in Our Knowledge of Corporate Governance, from the Rock Center for Corporate Governance at Stanford, the authors observe that it “is extremely difficult to produce high-quality, fundamental...more
Being stuck between the choice of either disappointing investors or facing potential personal liability is the very definition of being caught between a rock and a hard place. Tax liability insurance can take you to a more...more
Ligos v. Tsuff, C.A. No. 2020-0435-SG (Del. Ch. Dec. 1, 2022) - The Delaware Supreme Court’s Cornerstone Therapeutics decision established that, although a transaction involving a controller must satisfy entire fairness...more
In December 2021, the Bermuda Monetary Authority (the “BMA”) issued a consultation paper proposing revisions to the Insurance Code of Conduct dated July 2015. On Friday, 28 August 2022 the BMA posted further and final...more
The Delaware Supreme Court recently affirmed a Court of Chancery ruling granting a Special Litigation Committee’s motion to terminate a shareholder derivative action that had survived a motion to dismiss. The split decision...more
In re Kraft Heinz Company Derivative Litigation addresses demand futility in a case involving an insider stock sale. 3G Capital, Inc., a 24.2 percent shareholder in Kraft Heinz, sold 7 percent of its stake in August 2018...more
In our November 2, 2021 blog post, we highlighted a number of considerations for the 2022 proxy season. Based on recent developments, the following are some additional items...more
As we head into a new proxy season, this SEC order involving settled charges against Leaf Group Ltd. might be a good case to keep in mind. In this case, the SEC charged that Leaf did not adequately identify and analyze—and...more
On August 19, 2021, the New York Stock Exchange (NYSE) filed an immediately effective rule change (Rule Proposal) restoring a transaction value and materiality threshold for related party transactions that require independent...more
Recently, a materially revised Chapter 11 restructuring plan of reorganization was negotiated, in part, by a purportedly independent special committee of the board of Purdue Pharma LP. Originally published in Law360 July...more
RCS Creditor Trust v. Schorsch et al., C.A. No: 2017-0178-SG (Del. Ch. Mar. 18, 2021) - Controlling shareholders of a Delaware corporation owe fiduciaries duties, but those duties do not require controllers to sacrifice...more
ISS recently released updated methodology for its Governance QualityScore (GQS) rating system for institutional investors. The new factors relate to areas of emerging concern to investors, with 11 of the 17 new factors...more
Board Decision Making in a Down Cycle - The last several months have been unprecedented in terms of how quickly and drastically business environments have changed. With widespread uncertainty and financial distress...more
Part 1 of a weekly series detailing approaches that Independent Board Members are utilizing to address Coronavirus-related matters and highlighting emerging issues. As veterans of the asset management industry — having...more
The dawn of a new decade brings with it the certainty of ongoing challenges to the conduct of public company directors based on alleged breaches of fiduciary duty. This note is a brief reminder for directors of Delaware...more
On November 12, 2019, the Canadian Securities Administrators (CSA) published Multilateral Staff Notice 51-359 Corporate Governance Related Discourse Expectations for Reporting Issuers in the Cannabis Industry ("MSN51-359") to...more
On November 11, 2019, Institutional Shareholder Services, Inc. (“ISS”) published its proxy voting guidelines updates (the “2020 Updates”) for the 2020 proxy season, effective for meetings on or after February 1, 2020. The...more
The Federal Trade Commission announced its settlement with Facebook on the same day that Robert Mueller testified before the House Judiciary Committee. While this may have been calculated to take Facebook off the front page,...more
Old and In the Way? A recent study by four professors (Ronald W. Masulis, Cong Wang, Fei Xie & Shuran Zhang) finds quite a few faults with older directors...more
The SEC’s settlement with Tesla and Elon Musk teaches us some important corporate governance lessons on monitoring and vetting executive use of social media. As background, on August 7, 2018, the markets were surprised by...more