By: Franca Tavella
On June 21, 2018, the United States Supreme Court decided South Dakota v. Wayfair Inc., et al., which upheld South Dakota’s economic nexus law allowing the state to impose sales tax upon online retailers who sell goods into South Dakota but do not have a physical nexus with that state – i.e., property or employees in the state. In doing this, the Supreme Court overruled the physical presence requirement set forth in Quill Corporation v. North Dakota in 1992.
By: Adam Chelminiak
The Corporation Law Section of the Delaware State Bar Association recently published its proposed amendments to the Delaware General Corporation Law (DGCL) for 2019.1
The amendments reflect a broad effort to modernize the DGCL’s provisions addressing electronic documentation of actions and electronic transmissions of items such as notices and consents. The most significant changes contemplated by the proposed amendments are: (i) the introduction of safe harbor procedures for electronic documentation, execution and delivery of various acts and transactions; (ii) revisions to the default provisions for the delivery of stockholder notices; and (iii) revisions to the provisions governing delivery of stockholder consents by electronic submission. The proposed amendments also include important clarifying changes to the provisions of Section 141(f) with concern to board actions by written consent.
By: Marc Casarino and Lori Smith
In an April 16, 2019 rejection of the trial court’s analysis in Aruba Networks, the Delaware Supreme Court further clarified its recent pronouncements regarding the use of deal pricing as a measure of fair value in statutory appraisals under section 262 of the Delaware General Corporation Law.[1] When a tender offer is made for a target company’s stock, section 262 provides a mechanism for dissenting stockholders to seek judicial appraisal of their stock rather than accepting the deal pricing. The court is charged with valuing the target company as an ongoing business at the time of the transaction, without regard to post-transaction events or any other business combination. In short, a section 262 appraisal should value the target company as a going concern and not as would be valued by a third party in an acquisition. (more…)
By: William Hussey
While April 15th is the due date by which most taxpayers have to file and pay any taxes due for 2018, April 16th marks “Tax Freedom Day” for United States taxpayers this year. Tax Freedom Day is the date each on which U.S. economic output equals the aggregate federal, state and local taxes (some $5.2 trillion) due to all the governmental entities that impose them. So, it is time to celebrate as we are now (largely) working for ourselves for the rest of the year! (more…)
By: Marc Casarino
Delaware courts evaluate a self-dealing transaction with a controlling stockholder through the lens of entire fairness — meaning that both the deal process and price must be deemed fair. The burden of proving entire fairness lies initially with the board of directors and can be a challenging standard to satisfy. There presently are only limited means to blunt the onerous burden of the entire fairness standard. For example, the board of directors can shift the burden of proof to a challenging party if the transaction was approved by a majority of the minority stockholders or by an effective special committee of disinterested directors. Alternatively, where completion of the transaction is predicated at the outset of negotiations upon approval of the majority of the minority stockholders and an effective special committee of disinterested stockholders, the court will defer to the business judgment of the board rather than require proof of entire fairness. (more…)
By: Jeremy M. Miller
In early 2019, J.P. Morgan became the first major United States bank to successfully test a digital coin (the “JPM Coin”) designed to modernize the future of instantaneous payments in commercial transactions. The JPM Coin is neither an official currency nor backed by the full faith and credit of the U.S. government, unlike the dollar. The JPM Coin can be analogized to a “token” and is based on the concept that one JPM Coin held in a JPMorgan Chase N.A. account is considered the equivalent of one dollar. The value of a JPM Coin does not fluctuate like a stock trading in the market. (more…)
By: James P. Anelli and Tanya A. Salgado
New Jersey employers should take note of a newly enacted amendment to the New Jersey Law Against Discrimination (LAD) that directly impacts employment agreements and settlement agreements of discrimination claims. The amendment was signed by Governor Phil Murphy on March 18, 2019 and is effective immediately.
The Wage and Hour Division of the U.S. Department of Labor (DOL) recently issued an opinion letter that addresses whether employees must be compensated for the time they spend participating in an employer-sponsored community service program outside of normal working hours. The specific program reviewed by the DOL did not require employees to participate, did not direct or control the volunteer activities and also provided a reward to the group of employees with the greatest community impact. The winning group’s supervisor then maintained the discretion on how to distribute the award/bonus to each employee in the group based on multiple factors, including, but not limited to, how many hours each employee volunteered during the year.
By: Lori Smith
The other day I had a client ask me to review some form documents that another party wanted to use in connection with the client’s website. The basis of the request was that he thought I had prepared, or at least reviewed, these documents when they were originally created – over 10 years ago (coincidentally I had reviewed them, but had been somewhat critical, in part, at that time as off-market). This got me thinking about how many companies (and lawyers) rely on templates or precedential deal documents collected over many years, without thinking about the specific facts and circumstances of the deal they are doing or the passage of time and how that might implicate the need for updates and revisions.
By: Carl Koerner
I was on a flight one time when the pilot announced a delay to check a mechanical issue. He said it was probably nothing, but “we always prefer to be down here wishing we were up there, than up there wishing we were down here.” It stayed with me. Of late there has been much chatter about the global economy and whether the tea leaves are predicting a correction or worse in our economy at home. So much so, that I wonder if the iconic phrase “winter is coming” will be worn out before the final season of Game of Thrones even begins. Maybe what we are experiencing is just uncertainty before the next big growth spurt. But like our pilot, wouldn’t we all be better off if we prepared for a recession that never comes rather than finding ourselves unprepared for one that does? (more…)
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