Publications
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05.01.2020Conflicted Transactions: Cleansing Process Only Effective if Procedures Are Rigorously FollowedUpdatesIn today’s difficult economic environment, many companies—including those in the portfolios of private equity and venture capital funds—are struggling financially. For some, a transaction in which a private equity sponsor or a venture capital investor has a significant interest may provide a lifeline for the troubled company.
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03.24.2020Board Oversight Is Critical in Crisis ManagementUpdatesThe coronavirus (COVID-19) outbreak and its possible impacts on corporations highlight the importance of the board of directors’ oversight function in times of crisis.
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11.16.2015Proxy Access Update—Preparing for the 2016 Proxy SeasonUpdatesProxy access predominated corporate governance issues for the 2015 proxy season, with over 100 proposals submitted on the topic, compared to 18 in 2014.
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09.08.2009In a Leveraged Buyout With a Controlling Stockholder, Loyal Directors Must Actively Negotiate: Louisiana Municipal Police Employees' Retirement System v. FertittaUpdatesA recent decision by the Delaware Court of Chancery reinforces the responsibility of a board of directors to assertively defend the interests of the noncontrolling stockholders when negotiating with a controlling stockholder in order to satisfy the board's duty of loyalty.
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02.13.2009Proxy Season Reminder: Public Companies Should Consider Updating the Advance Notice Provisions in Their BylawsUpdatesProxy statement preparation and planning for annual meetings of stockholders are in full swing. Along with proxy season comes the possibility that stockholders may submit proposals or nominations for consideration at the annual meeting.
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10.16.2008Hexion v. Huntsman: Delaware Court of Chancery Interprets "Material Adverse Effect" and "Knowing and Intentional Breach" of Merger AgreementUpdatesIn a decision that amplifies how Delaware courts analyze material adverse effect clauses in merger agreements and examines what constitutes bad faith by a buyer, the Delaware Court of Chancery in Hexion Specialty Chemicals, Inc. v. Huntsman Corp., C.A. No. 3841-VCL, 2008 WL 4457544 (Del. Ch. Sept. 29, 2008), dealt the buyer, Hexion Specialty Chemicals, Inc., a stunning blow.
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10.03.2008SEC Adopts Amendments to Rules and Forms for Foreign Private IssuersUpdatesThe SEC recently adopted amendments to rules and forms affecting foreign private issuers.
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02.07.2008SEC Permits Smaller Public Companies to Use Form S-3 Registration Statements for Primary Offerings of SecuritiesUpdatesThe SEC recently amended the eligibility requirements for companies to use Form S-3 registration statements to facilitate more efficient capital market access by smaller public companies.
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01.11.2006SEC Proposal Exempts Compensation Arrangements From the Tender Offer Best-Price RuleUpdatesThe Securities and Exchange Commission recently proposed amendments to its tender offer "best-price rule," which it adopted in 1986 to prevent discriminatory tender offers by requiring that the highest price paid to any security holder in a tender offer must be paid to all other tendering security holders. Several court decisions interpreting the SEC's best-price rule have created uncertainty about whether compensatory and other arrangements made with a target company's officers, employees, directors and shareholders in an acquisition structured as a tender offer will be deemed tender offer consideration that is subject to this rule.
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08.26.2005Delaware Court — Disney Directors Breached "Aspirational Ideals" of Good Corporate Governance, but Not Their Fiduciary DutiesUpdatesIn early August 2005, the Delaware Court of Chancery issued its opinion after a widely publicized three-month trial in In re The Walt Disney Company Derivative Litigation, absolving Disney's directors of liability in connection with the 1995-1996 hiring and firing of former Disney president Michael Ovitz. Ovitz received a severance package of approximately $140 million after his unsuccessful 14-month tenure at Disney.
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02.11.2005Board Self-Evaluations: Do the Benefits Outweigh the Potential Pitfalls?UpdatesNew York Stock Exchange listing standards require boards of listed companies to conduct self‑evaluations at least annually to determine whether the board and its committees are functioning effectively. Although Nasdaq Marketplace Rules are silent on board self‑evaluations, a growing number of companies are considering such evaluations as a matter of best practices.
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08.23.2004Amended Form 8-K: Practical Guidance on Reporting Material Agreements to Help You Meet the Real-Time Reporting ChallengeUpdatesThe SEC's recent amendments to Form 8-K, which are effective for reportable events that occur on or after August 23, 2004, expand the number of reportable events and accelerate the filing deadline for most items to four business days. For events that occur prior to August 23, 2004, companies should analyze their reporting obligations using prior Form 8-K and report information as required under that version of the form (although Form 8-Ks filed on or after August 23 must use the new item numbers, even if the information reported corresponds to the requirements of the prior Form 8-K).
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12.01.2003SEC Adopts Final Nasdaq Corporate Governance RulesUpdatesThe Securities and Exchange Commission recently approved the Nasdaq Stock Market's corporate governance rules, which finalize Nasdaq corporate governance proposals made over the last 18 months. The most significant changes from Nasdaq's most recent corporate governance rule proposals include: Amending the "bright line" tests for director independence, including: A narrower definition of "family member," and Expanded application of the relationships that preclude a finding of independence to apply not only to directors, but also to family members.
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12.01.2003SEC Approves Final NYSE Corporate Governance StandardsUpdatesThe Securities and Exchange Commission recently approved the New York Stock Exchange's corporate governance listing standards, which finalize NYSE corporate governance proposals made over the last 18 months. The most significant changes from NYSE's most recent proposal (in April 2003) include: Accelerating of the effectiveness dates relating to board and committee independence requirements.
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06.26.2003Delaware Court Warns Directors and Officers on Oversight of Executive Compensation: In re The Walt Disney Company Derivative LitigationUpdatesOn May 28, 2003, the Delaware Court of Chancery issued a ruling that could expose directors of The Walt Disney Company (Disney) to personal liability for asserted breaches of their fiduciary duties in the hiring and subsequent termination of Michael Ovitz as Disney president—decisions that resulted in an alleged $140 million payout for a year's work.
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05.15.2003Whistleblower Provisions of the Sarbanes-Oxley Act - Some Practical ConsiderationsUpdatesThe Sarbanes-Oxley Act of 2002 contains two very different provisions addressing corporate "whistleblowers." This Update describes both:
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04.30.2003NASDAQ Refines Director and Committee Rule ProposalsUpdatesThe Nasdaq Stock Market recently issued several revised rule proposals regarding director independence, audit committee composition and function, and related corporate governance issues. This Update summarizes these proposals, which include only a few changes from the original rule proposals discussed in our October 18, 2002 Update.
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04.22.2003Current Issues Checklist Based on Recent 10-K Filing Season and SEC's Fortune 500 ReportUpdatesThe SEC's 2002 "Fortune 500" review of annual reports, coupled with our and our clients' recent 10-K filing season, indicates that the SEC will continue to focus on the following critical disclosure areas in the coming year's periodic reports:
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03.25.2003SEC Proposes Amendments to CEO and CFO Certifications Under Sarbanes-OxleyUpdatesThe SEC recently proposed amendments that would require companies to provide the officer certifications under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 as exhibits to periodic reports. Importantly, the SEC also indicated that Section 906 certifications should be provided as exhibits to periodic reports pending the adoption of final rules.
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02.05.2003Financial Experts and Codes of Ethics: SEC Adopts More Realistic Final RulesUpdatesIn a substantial departure from its proposed "financial expert" definition, the SEC has adopted a more realistic final definition of "audit committee financial expert." The SEC final rules adopted pursuant to Sections 406 and 407 of the Sarbanes-Oxley Act of 2002 will require a public company to disclose, for fiscal years ending on or after July 15, 2003:
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02.05.2003SEC Issues Final Rules Governing Non-GAAP Financial InformationUpdatesThe Securities and Exchange Commission (SEC) has issued final rules for public companies' disclosure of non-GAAP financial measures. The new rules, which implement Sections 401(b) and 409 of the Sarbanes-Oxley Act, adopt new "Regulation G," and amendments to Regulation S-K and Form 8-K. Under these new rules a company must:
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01.18.2003SEC Proposes Rules to Implement Sarbanes-Oxley's Audit Committee Independence RequirementsUpdatesLast week, the SEC released proposed rules to implement the audit committee independence and whistleblower provisions of Section 301 of the Sarbanes-Oxley Act of 2002. Sarbanes-Oxley (Sec. 301) requires the SEC to adopt final rules by April 26, 2003, directing all national securities exchanges and national securities associations ("SROs"), including NYSE and Nasdaq, to prohibit the listing of any security of an issuer that is not in compliance with the audit committee requirements set out in Section 301. The proposed rules cover:
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12.11.2002SEC Brings First Enforcement Actions Under Regulation FDUpdatesThe Securities and Exchange Commission announced on November 25, 2002, its first enforcement actions related to violations of Regulation FD. The SEC imposed cease-and-desist orders on Raytheon Company and its CFO, Siebel Systems, Inc., and Secure Computing Corporation and its CEO.
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10.24.2002"Rapid and Current" Disclosure and Form 8-K Proposals: Where Have the SEC's 8-K Proposals Gone?UpdatesWhat is the status of the SEC's June 17, 2002 8-K proposals? Have they been withdrawn? Overturned by the Sarbanes-Oxley Act of 2002? This Update answers those questions and summarizes Perkins Coie's comment letter to the Securities and Exchange Commission (SEC).
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09.06.2002Recent SEC Final Rules: CEO and CFO Certification of Periodic Reports and Disclosure Controls; Accelerated Form 4 and Annual and Quarterly Report Filing DeadlinesUpdatesLast week the SEC adopted final rules under Sections 302 and 403 of the Sarbanes-Oxley Act of 2002:
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09.05.2002NYSE Files Proposed Final Corporate Governance Rules With SECUpdatesThe Board of the New York Stock Exchange (NYSE) submitted its proposed final listing and corporate governance rules to the Securities and Exchange Commission (SEC) on August 16, 2002, following a two-month comment period in which NYSE received more than 300 comment letters. NYSE's Board largely adopted the final recommendations of its Corporate Accountability & Listing Standards Committee, with some refinements to reflect the Sarbanes-Oxley Act and comment letters received during the comment process.
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07.01.2002SEC Proposes to Restructure Form 8-K and Accelerate Form 8-K FilingsUpdatesFor the first time in 25 years, the Securities and Exchange Commission plans to significantly restructure Form 8-K. Under the SEC's June 17, 2002 proposal, a reporting company would be required to disclose many events on Form 8-K that currently are not required to be disclosed or are included only in annual or quarterly reports. If adopted, the new rules would require Form 8-K disclosure of the following events:
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09.01.2000SEC Introduces New Fair Disclosure RuleUpdatesOn August 10, 2000, the Securities and Exchange Commission (SEC) adopted Regulation FD (Fair Disclosure) in order to promote the full and fair disclosure of information by issuers. Regulation FD, which will become effective on October 23, 2000, targets the perceived problem of "selective disclosure"--when a company makes material nonpublic information available to selected persons, such as securities analysts or institutional investors, who could be expected to trade on the basis of such information before the information is disclosed to the general public.