News & Analysis as of

Shareholders

When a Pro Rata Dividend Triggers Entire Fairness

by Morris James LLP on

In IRA Trust FBO Bobbie Ahmed v. Crane, Consol. C.A. No. 12742-CB, the Court of Chancery dismissed a stockholder challenge to a reclassification implemented through a pro rata dividend to all stockholders. In addressing the...more

Equifax Lax About Hacks, Says Shareholder Lawsuit

by Locke Lord LLP on

In early September, Equifax disclosed a now well-known data breach that ultimately affected a reported 146 million customers in the United States. The breach allegedly occurred in May 2017, as a result of an online security...more

ISS Updates Proxy Voting Guidelines for U.S. Public Companies

by McGuireWoods LLP on

Last month, Institutional Shareholder Services (ISS) updated its proxy voting guidelines for the upcoming proxy season. The updates, summarized in part below, are effective for shareholder meetings on or after Feb. 1, 2018....more

Delaware Supreme Court Stresses Value Of Deal Price In Appraisal Case

by Morris James LLP on

Dell Inc. v. Magnetar Global Event Driven Master Fund Ltd., No. 565, 2016 (December 14, 2017) - In this much-anticipated decision, the Delaware Supreme Court stresses the importance of the deal price to the award in an...more

Debtor’s Subchapter S Status Isn’t Property of the Estate

This post examines an interesting intersection between bankruptcy and tax laws: if a corporation terminates its Subchapter S status pre-bankruptcy, can a bankruptcy trustee bring fraudulent transfer claims against the...more

Delaware Court of Chancery Issues Important Decision on Recapitalizations and Dual-Class Structures Involving Controlling...

On December 11, 2017, the Delaware Court of Chancery issued a decision that will be important for companies looking to implement measures to extend or make changes to dual-class voting structures and for companies with...more

NYSE Proposes to Modify Rules Regarding Delivery of Proxy Materials to Exchange

The NYSE has filed a proposed rule with the SEC to amend the NYSE Listed Company Manual to modify requirements with respect to delivery of proxy materials to the NYSE. ...more

Court Of Chancery Expands MFW To Recapitalization

by Morris James LLP on

IRA Trust FBO Bobbie Ahmed v. Crane, C.A.. 12742-CB (December 11, 2017) - This is an important decision because it extends the holding of MFW to a stock reclassification. Under the 6-part test of MFW, the business judgment...more

Court Of Chancery Enforces Oral Agreement To Add Directors

by Morris James LLP on

Sarissa Capital Domestic Fund LP v. Innoviva Inc., C.A. 2017-0309-JRS (December 8, 2017) - This is a great explanation of when a director is authorized to enter into an oral agreement that is enforceable, here to add two...more

Court Of Chancery Explains Conspiracy Jurisdiction

by Morris James LLP on

Perry v. Neupert, C.A. 2017-0290-VCL (December 6, 2017) - The conspiracy theory of jurisdiction developed in the Istituto Bancario decision is often misunderstood, for good reasons....more

Court Of Chancery Explains Basis For Inspection Of Alleged Wrongdoing

by Morris James LLP on

Silverberg v. ATC Healthcare Inc., C.A. 2017-0242-JRS (December 5, 2017) - While the standard to win the right to inspect corporate records to investigate alleged wrongdoing is a lenient one, it is still not enough to just...more

Trust Fund Tax: Responsible = Liable (?)

by Farrell Fritz, P.C. on

Some shareholders are content with being wholly passive investors in a corporation. Others desire some degree of participation in the day-to-day management of the corporation’s business. Still others are willing to abstain...more

Five Things to Know about the Tax Cuts and Jobs Act

Even with the bill still in Conference, here are some things businesses should follow closely. Both House and Senate Bills call for deemed repatriation of accumulated foreign profits at reduced tax rates. ...more

New Staff Guidance on Shareholder Proposals

by Morrison & Foerster LLP on

On November 1, 2017, the Staff of the SEC’s Division of Corporation Finance released Staff Legal Bulletin No. 14I (“SLB 14I”), which provides new guidance on how the Staff will evaluate arguments for omission of a shareholder...more

New German Money Laundering Act Establishes Additional Transparency Requirements for Certain Listed Companies, European Capital...

by Jones Day on

On 25 June 2017, the new German Money Laundering Act came into force, which primarily implements the 4th European Anti-Money-Laundering Directive (EU 2015/849) into German law. Among others, the Act establishes a new...more

ICSA and The Investment Association Publish Guidance on Board Engagement with Stakeholders, European Capital Markets Update

by Jones Day on

In September 2017, ICSA: The Governance Institute ("ICSA") and The Investment Association published new guidance to help company boards ensure that they consider and understand the interests of their key stakeholders when...more

Court of Appeals Ruling Eases the Way for Shareholders to Bring Derivative Suits Against Cayman Islands Companies in the New York...

On Nov. 20, 2017, the New York Court of Appeals held that in a derivative action brought in a New York court against a company incorporated in the Cayman Islands, the plaintiff need not comply with Rule 12A of the Cayman...more

Pre-Merger Suit Deemed Premature By Chancery, Dismissal Granted

by Fox Rothschild LLP on

In a recent decision by the Delaware Court of Chancery, In re Straight Path Commc’ns Inc. Consol. S’holder Litig., Civil Action No. 2017-0486-SG (Del. Ch. Nov. 20, 20107), Vice Chancellor Glasscock stayed consideration of a...more

Court Of Chancery Determines When A Proxy Is Irrevocable And When It Has Jurisdiction To Decide Equitable Ownership In A Section...

by Morris James LLP on

Zohar II 2005-1 Limited v. FSAR Holdings Inc., C.A. No. 12946-VCS (Nov. 30, 2017) - This is an important decision for two reasons. First, it determines when a proxy is irrevocable under Delaware law. To be irrevocable...more

Book Value Sales

by Alston & Bird on

Corporate groups like to have affiliates sell property to each other at book value. They know what book value is, but may not know fair market value. However, using book value as the sales price, even within consolidated...more

Court Of Chancery Applies Corwin And Test For Control

by Morris James LLP on

Peter Van Der Fluit v. Yates, C.A. No. 12553-VCMR (Nov. 30, 2017) - Briefly, under Corwin, the informed vote of a majority of the disinterested stockholders subjects a transaction to the business judgment rule when the...more

First-Time Conversion of a Mutual Fund to a Closed-End Fund

by Ropes & Gray LLP on

In an industry first, a mutual fund converted to a closed-end fund with the same investment objective and strategy. As described below, the conversion was approved by the fund’s board of trustees (“Board”) and by a majority...more

Glass Lewis Issues 2018 Voting Policies Update

by King & Spalding on

On November 22, 2017, Glass Lewis issued its updated proxy voting guidelines for the upcoming 2018 proxy season. Notable updates applicable to U.S. companies include new or revised policies relating to: ..gender diversity...more

The Numbers Don’t Lie: The SEC Pursues a More Streamlined Enforcement Agenda

One of the most eye-catching items in the recently released 2017 Annual Report of the Enforcement Division of the Securities and Exchange Commission (SEC or the Commission) is the significant decline in enforcement activity...more

Preparing for the Shareholder Proposal Season

On November 16, 2017, Skadden held our webinar “Preparing for the Shareholder Proposal Season.” The panelists were Michael Garland, Assistant Comptroller for Corporate Governance and Responsible Investment in the Office of...more

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