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About Amy Besser

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Amy Besser has contributed 71 entries to our website, so far.

From Both Sides Now: Looking at Contracts Through a Post-Pandemic Lens

From Both Sides Now: Looking at Contracts Through a Post-Pandemic Lens

Jun 9, 2020

By: Lori S. Smith

A little over a year ago, I wrote a blog post about the danger of relying on precedent. Now, more than ever, clients and their advisors need to revisit contract forms on which they may have been relying for years. While many of us have lived through times that required certain adjustments in how we viewed contractual obligations — recessions, wars, oil embargoes, natural disasters, 9/11 — none of these events had the widespread and long-lasting impact that the current COVID-19 pandemic is having. None of these events shut down the U.S. economy and impacted global supply chains across every industry in the manner we are now experiencing. (more…)

Southern District of New York Reaffirms That Syndicated Bank Loans Are Not Securities

Southern District of New York Reaffirms That Syndicated Bank Loans Are Not Securities

Jun 1, 2020

By: Alexandria E. Kane

On May 22, 2020, Judge Paul G. Gardephe of the Southern District of New York, in Kirschner v. JPMorgan Chase, reaffirmed that syndicated bank loans are not securities. In Kirschner, the plaintiff alleged that a $1.77 billion syndicated bank loan made to Millennium Laboratories LLC (Millennium), a California-based urine testing company and subsequently sold to 70 institutional investors was, in fact, a security — affording it additional protections under the certain state “blue sky” securities laws. The plaintiff alleged that defendants J.P. Morgan Chase Bank, N.A., J.P. Morgan Securities LLC, Citibank, N.A., Citigroup Global Markets, Inc., Bank of Montreal, BMO Capital Markets Corp., SunTrust Bank and SunTrust Robinson Humphrey, Inc., sold debt obligations to the investors but “misrepresented or omitted…material facts in the offering materials they provided and communications they made to Investors regarding the legality of [Millennium’s] sales, marketing, and billing practices” and “the known risks posed by a pending government investigation into the illegality of such practices.” Shortly after the closing of the loan transaction, Millennium lost an important litigation matter that resulted in a $500 million decrease to its valuation and, in addition, entered into a $256 million settlement with the Department of Justice (DOJ) over claims related to alleged healthcare law violations. Within a month of finalizing the DOJ settlement, Millennium defaulted on the loan and filed for bankruptcy. (more…)

M&A Risk Allocation: Drafting and Litigation Considerations in the Era of COVID-19

M&A Risk Allocation: Drafting and Litigation Considerations in the Era of COVID-19

May 4, 2020
By: Marc S. Casarino, Thomas B. Fiddler, Lori S. Smith and Eric B. Porter

Risk allocation between parties is a key consideration in the negotiation of merger and acquisition (M&A) agreements. These contractual provisions are garnering even more attention as deal challenges continue to arise from business disruptions caused by or related to the COVID-19 pandemic. As previously discussed, several lawsuits recently filed in the Delaware Chancery Court reflect key battle lines over whether, and how, pandemic-related operational challenges square with clauses covering material adverse effect (MAE), ordinary course of business covenants, specific performance and other provisions of these agreements. In the past few days, several additional cases have been filed which continue to highlight these issues as well as others, such as failure to provide access to diligence.

(more…)

Choosing Delaware Law Does Not Mean You Can Litigate In Delaware – The Sequel

Choosing Delaware Law Does Not Mean You Can Litigate In Delaware – The Sequel

Apr 17, 2020

By: Marc Casarino and Lori Smith

In our August 2017 alert, we cautioned that Delaware choice-of-law provisions standing alone will not confer jurisdiction in Delaware. To best support an argument for litigating in Delaware, we advised that a combination of contractual provisions distinctly establishing consent to Delaware law, forum and jurisdiction should be incorporated into the parties’ agreement. A pair of recent decisions ratify this advice, and serve as further reminder that failure to expressly cover selection of venue and consent to jurisdiction, in addition to choice of governing law, could frustrate a party’s ability to litigate in Delaware. (more…)

M&A Litigation Rising Amidst COVID-19 Uncertainty: Considerations for Litigators and Deal-Makers

M&A Litigation Rising Amidst COVID-19 Uncertainty: Considerations for Litigators and Deal-Makers

Apr 14, 2020

By: Marc Casarino, Thomas Fiddler, Lori Smith and William Fedullo

Just as no human being is naturally immune to the COVID-19 virus, no industry is immune to its economic effects—and related M&A activity across all industries proves no exception. In the weeks following the issuance of stay-at-home orders in states across the country, multiple lawsuits have been filed by parties to agreements whose terms have been rendered economically dubious, impracticable or contrary to the fundamental assumptions on which the parties relied because of the pandemic: in the Delaware Court of Chancery alone, WeWork has filed suit to compel a Japanese investor to close a $3 billion tender offer; Bed Bath & Beyond has attempted to force 1-800-Flowers to complete a $252 million purchase of its subsidiary, PersonalizationMall.com; and a franchisee has sued its franchisor, CorePower Yoga LLC, for specific performance of a pre-pandemic agreement to buy its thirty-four yoga studios. Though all three of these cases are in the early stages of litigation—only the complaints have been filed—they involve issues and circumstances that are certain to recur in actions throughout the country. These cases represent only the tip of the iceberg when considering the types of litigation that are likely to arise from both pending and closed M&A deals and the issues that M&A attorneys and commercial litigators should be considering in addressing upheaval to the deal market caused by COVID-19. (more…)

Board of Directors Guidance When Addressing Emergency Circumstances Occasioned by the COVID-19 Pandemic

Board of Directors Guidance When Addressing Emergency Circumstances Occasioned by the COVID-19 Pandemic

Apr 2, 2020

By: Marc Casarino, Lori Smith and Gwenn Barney

The COVID-19 pandemic has sent massive shockwaves throughout the global economy. This crises requires business leaders to confront a host of deleterious effects on an emergency basis – the likes of which many companies have never experienced. Boards of directors must remain cognizant of their oversight responsibilities in these trying times. This post offers guidance to directors of Delaware companies for addressing emergency circumstances occasioned by the COVID-19 pandemic. (more…)

Amid Coronavirus Pandemic and Declining Stock Prices, Public Companies Implement Poison Pills to Deter Corporate Raiders

Amid Coronavirus Pandemic and Declining Stock Prices, Public Companies Implement Poison Pills to Deter Corporate Raiders

Mar 24, 2020

By: Alexandria E. Kane and Patrick Devine

On March 19, 2020, Dave & Buster’s Entertainment, Inc. (D&B) announced that it adopted a takeover-defense poison pill to deter activist investors from taking control of the company by accumulating its shares on the open market. This measure came after the stock of D&B decreased almost 90% over a one-month period due to concerns related to the coronavirus and after Kohlberg Kravis Roberts, an investment firm that made its name as a corporate raider in the 1980s, disclosed a 12.7% ownership interest in D&B (including certain cash-settled forward contracts). With experts predicting that shareholder activism will rise as stock prices plummet in the wake of the coronavirus pandemic, other potentially vulnerable public companies should consider following D&B’s lead. (more…)

Delaware Supreme Court Upholds Federal Forum Selection for Securities Act Claims

Delaware Supreme Court Upholds Federal Forum Selection for Securities Act Claims

Mar 23, 2020

By: Marc Casarino, Lori Smith and Adam Chelminiak

On Wednesday, March 18, 2020, the Delaware Supreme Court overturned a Chancery Court decision that had prohibited Delaware corporations from adopting federal forum selection provisions for actions arising under the federal Securities Act of 1933 (Securities Act). In its opinion in Salzberg v. Sciabacucchi[1], the Court held that allowing federal forum selection provisions in a corporation’s governing documents advanced the goals of achieving judicial efficiency in resolving claims and offering flexibility to engage in private ordering. (more…)

Delaware Chancery Court Holds That a Transaction Involving a Conflicted Board Majority Can Be Cleansed If Appropriate Safeguards Are Implemented

Delaware Chancery Court Holds That a Transaction Involving a Conflicted Board Majority Can Be Cleansed If Appropriate Safeguards Are Implemented

Mar 19, 2020

By: Marc Casarino and Ryan Udell

In a legal challenge to a corporate transaction, the applicable standard of review is often outcome determinative. The deferential business judgment rule applies where the board is not majority conflicted. The burden is on the challenger to show bad faith sufficient to overcome the board’s business judgment – a high standard that almost always results in dismissal of the challenge. On the other hand, the more onerous entire fairness review applies to conflicted transactions. Where entire fairness applies, the burden is on the board to prove that the price and approval process were fair. This is a fact-intensive analysis that does not lend itself to dismissal at the pleadings stage. (more…)

HHS Finalizes New Rules Seeking Interoperability for Electronic Health Information

HHS Finalizes New Rules Seeking Interoperability for Electronic Health Information

Mar 13, 2020

By: Lori Smith and Jeremy Miller

On March 9, 2020, the United States Department of Health and Human Services (HHS) issued two new sets of rules under the 21st Century Cures Act designed to provide patients with more control over their health care data. With the goal of interoperability, the final rules developed by each of the HHS Office of the National Coordinator for Health Information Technology (ONC) and Centers for Medicare & Medicaid Services (CMS) require providers, payers and information technology vendors to provide patients with the ability to easily access their electronic health information (EHI) on electronic devices, including smart phones. (more…)

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