By: Thomas Pinney
Many secured loans, especially real estate loans with a lockbox and cash management arrangement, rely on a security interest in the borrower/debtor’s bank accounts to protect the cash generated from operations from third-party creditors. As a recent decision from the United States Bankruptcy Court for the District of Nevada, Charleston Associates, LLC v. RA Southwest land Company, LLC, et al, (In re Charleston Associates, LLC), Adv. Proc. No. 10-01452-MKN (Bankr. D. NV December 12, 2017) points out, simply establishing a cash management regime over the borrower’s funds may not provide a lender with protection once the funds have left the account. (more…)
By: Marc Casarino and Lori Smith
On December 14th, the Delaware Supreme Court provided some welcome news to dealmakers by reversing the lower court decision in Dell v. Magnetar Global in which the lower court ignored the deal price in determining fair value of stock in an appraisal action brought by investors who opposed a management led buyout to Michael Dell and a large private equity firm. In doing so, the Court furthered its recognition of the deal price as indication of fair value when the transaction is the result of an arm’s length, robust process. (more…)
By: Marc Casarino and Lori Smith
In a recent case, the Delaware Court of Chancery made clear the value of implementing a proper special committee to address the influence of a self-interested controlling party on a transaction as well as the requirements for satisfying demand futility for purposes of derivative actions.
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A federal judge in the Southern District of New York recently issued an opinion providing guidance concerning the viability of data breach claims, particularly in the context of a breach of employee information. Sackin v. Transperfect Global, Inc. involves a purported class action filed on behalf of Transperfect employees whose personally identifiable information (PII) was disclosed as a result of a cyber attack. In January 2017, a targeted phishing email was sent to a Transperfect employee designed to look like it had come from the company’s CEO, requesting payroll information regarding Transperfect employees. The Transperfect employee fell for the scheme and sent unencrypted PII to the attacker including names, addresses, Social Security Numbers, and bank account numbers for Transperfect employees. According to the complaint, the disclosure involved thousands of employees. Read more at Cyber News.
By: Ryan Udell, Michael Mentzel and Ian Doherty
When negotiating investments in target companies, a private equity firm will almost assuredly attempt to negotiate the best possible deal for itself and its investors. Any professional that has been a part of such negotiations and transactions understands that in addition to the valuation of the target company and the size of the investment, private equity firms can negotiate director seats, board observer rights, dividends, warrant protection, management services agreements, the right to buy additional securities at a fixed price in the future, and redemption rights. A recent opinion by the Delaware Chancery Court, however, may force some private equity firms to give pause before using their clout over company management to “cash-in” on these negotiated terms. (more…)
By: Marc Casarino and Lori Smith
Provisions designating the law governing contractual disputes are commonplace. However, designation of the governing law does not necessarily establish the jurisdiction within which the dispute must be decided. Parties who do not appreciate this distinction may be surprised that they cannot litigate their dispute in the jurisdiction they selected for the governing law. (more…)
“Taking Care of Business” is a new blog from White and Williams’ Corporate and Securities Group. With the help of our friends in Cyber Law and Data Protection, Tax, Real Estate and Finance, Bankruptcy, Intellectual Property, Labor & Employment and Commercial Litigation, TCB will focus on emerging issues impacting the business community at every stage of the lifecycle from formation to growth and to exit. Whether it be important updates on day-to-day operational matters such as tax planning, employee benefits, commercial contracts, corporate finance, intellectual property, regulatory and data privacy and cybersecurity, or best practices and recent trends or legal developments of note applicable to transactional matters including acquisitions, strategic alliances, private equity and venture capital financings and debt financings, we’ve got you covered. And of course, we will keep you posted on any recent developments on the litigation and bankruptcy fronts too. In short, TCB will be a “one stop shop” for insights and commentary on everything relevant to owning and operating a business.
To give you a sense of the breadth of topics to be covered, today’s blog highlights five current legal issues that are on the minds of many of our clients. (more…)