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Delaware Supreme Court Rejects Presumption that Deal Price is Best Estimate of Fair Value; Private Equity Buyer’s Price Deserves Appropriate Consideration

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In DFC Global Corp. v Muirfield Value Partners, L.P. et al, the Delaware Supreme Court declined to adopt a presumption that in an arm’s length merger the deal price is the best estimate of fair value for purposes of an appraisal rights action.  The Supreme Court also found the Chancery... Read More

Topics: Litigation, M&A

SEC Commissioner Supports Mandatory Shareholder Arbitration

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Reuters is reporting that SEC Commissioner Michael Piwowar urged IPO companies to request relief from the SEC to include mandatory arbitration provisions for shareholder disputes. Commissioner Piwowar apparently made the comment in as yet unpublished remarks during an appearance at the Heritage Foundation. In 2012, Carlyle reportedly dropped a mandatory... Read More

Topics: Litigation, Public Companies and Securities

CPA Can’t be a Whistleblower for Non-Public Entities

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Reyher v. Grant Thornton, LLP analyzed whether an employee of a CPA firm is protected by the anti-retaliation provisions of the Dodd-Frank Act for lodging complaints with an employer about suspected illegal activity regarding non-public clients. The Plaintiff discovered what she believed were accounting irregularities in tax matters for non-public... Read More

Topics: Employment, Executive Compensation, Litigation, Public Companies and Securities

Director Equity Grants and Vote Buying Subject to Entire Fairness Review

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In Williams v. Ji et al, the Delaware Court of Chancery examined an alleged scheme in which the Directors of Sorrento Therapeutics, Inc. granted themselves options and warrants for the stock of five subsidiaries over which the corporation had voting control. Shortly before or after the options grants, the board... Read More

Topics: Executive Compensation, Litigation, Public Companies and Securities

Supreme Court to Determine Scope of Whistleblower Protection

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A percolating issue with respect to the SEC’s whistleblower regulations is whether the anti-retaliation protections apply only when suspected misconduct is reported to the SEC, or whether the protections also apply when the whistleblower reports the misconduct internally. Two circuit courts have held internal reporting is protected under the Dodd-Frank... Read More

Topics: Employment, Executive Compensation, Litigation, Public Companies and Securities

Faulty New Computer System Results in SEC Bringing MD&A Related Charges

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The SEC recently brought charges against the CEO and CFO of UTi Worldwide Inc. in a settled enforcement proceeding.  The Company was engaged in multinational freight forwarding and logistics operations. In connection with its freight forwarding business, the Company provided cash outlays for transportation costs, customs, duties, taxes, and other... Read More

Topics: Litigation, Public Companies and Securities