April 2018

The Hidden Cost of Meritless Class Action Lawsuits

By Elisabeth Kempf and Oliver Spalt April 30, 2018 by renholding

Close to 40 percent of all companies listed on major U.S. stock exchanges have been targeted by a securities class action lawsuit at least once between 1996 and 2017, according to the Stanford Securities Class Action Clearinghouse. These lawsuits are …

Arnold & Porter Discusses Regulators’ Clamp-Down on ICOs, Virtual Currencies, and Blockchain Firms

By Andrew Joseph Shipe, Lawton M. Camp, Michael D. Trager, Christopher L. Allen and Anthony Raglani April 30, 2018 by renholding

If there was ever a regulatory grace period for virtual currencies and blockchain technology, it is officially over.  Five federal regulators—The Financial Crimes Enforcement Network of the US Treasury Department (FinCEN), the Securities and Exchange Commission (SEC), the Commodity Futures …

Regulating Offshore Finance

By Will Moon April 27, 2018 by renholding

The Cayman Islands, Bermuda, and the British Virgin Islands are famous as “tax havens” that facilitate the evasion or avoidance of domestic tax. They and a growing number of other offshore jurisdictions in the Caribbean and elsewhere are emerging hubs …

Cahill Gordon Discusses Proposed Amendments to Delaware Corporation Law

By Helene R. Banks, Geoffrey E. Liebmann, Kaitlyn Pasco and Joseph Rosati April 27, 2018 by renholding

The Corporate Council of the Corporation Law Section of the Delaware State Bar Association (the “Corporate Council”) has released proposed legislation[1] to amend certain provisions of the Delaware General Corporation Law (“DGCL”) which if enacted would, among other things, …

How to Regulate Bitcoin Futures

By Margaret Ryznar April 26, 2018 by renholding

Bitcoin is a currency, technology, and, most recently, futures product.  Several clearinghouses have allowed bitcoin futures trading.  For example, CBOE launched trading in bitcoin futures on December 10, 2017, while CME Group did so a week later.[1]  NASDAQ and …

The Middle-Market IPO Tax

By Robert J. Jackson, Jr. April 26, 2018 by renholding

It’s a real honor to be here with you today at the Greater Cleveland Middle Market Forum.* In addition to leading some of the nation’s most promising young companies, you all have done exceptional work making sure that the …

Are Private Equity Returns Too Good to Be True?

By Niklas Huether April 25, 2018 by renholding

Investments in private equity are typically structured as 10 year limited partnerships in which fund managers act as general partners (GPs) and investors act as limited partners (LPs). Since the fund life is broken down into an investment and a …

Cahill Gordon Discusses Conflicting Rulings on Labor Department’s Fiduciary Rule

By Bradley J. Bondi, David S. Slovick and Courtney LaHaie April 25, 2018 by renholding

In a March 15, 2018 decision in Chamber of Commerce of the United States v. United States Department of Labor, the United States Court of Appeals for the Fifth Circuit vacated in its entirety the so-called “Fiduciary Rule” promulgated …

Hedge Funds’ Short-Term Thinking: Does It Matter for Merger Payments?

By Ning Gao, Olga Kolokolova and Achim Mattes April 24, 2018 by renholding

In 2010, Roger Carr, then-chairman of British confectionery Cadbury, waged a grueling five-month battle before losing control of the company to Kraft Foods.  “At the end of the day,” he said, “there were simply not enough shareholders prepared to take …

Latham & Watkins Discusses SEC’s Take on Digital Asset Trading

By Wenchi Hu, Vivian A. Maese, John J. Sikora Jr. and Timothy P. Pisacreta April 24, 2018 by charlesbluesky

Crypto trading platforms worldwide should be aware of recent SEC actions if they provide access to US persons or persons within the US for trading.

Global financial regulatory authorities have begun to take action and release guidance regarding the emerging …

Toys ‘R’ Us and Bankruptcy: Death by Disruption, Not Debt

By Anthony J. Casey and Brook E. Gotberg April 23, 2018 by renholding

As Toys ‘R’ Us heads for liquidation, a common refrain has it that the toy retailer failed to successfully reorganize in Chapter 11 because it took on too much debt.  The 2005 leveraged buyout (LBO) of Toys ‘R’ Us by …

Columbia Law Professors Write Three of Top 10 Corporate and Securities Articles

By Reynolds Holding April 23, 2018 by renholding

Zohar Goshen, Kathryn Judge, and Eric Talley were among the authors of three of the 10 best corporate and securities articles last year, the Corporate Practice Commentator has announced. The Columbia Law School professors were joined by Gabriel Rauterberg, a

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The Bankruptcy Partition

By Douglas G. Baird, Anthony J. Casey and Randal C. Picker April 20, 2018 by renholding

Corporate bankruptcy law is built around the idea of replicating the hypothetical bargain that would occur among creditors of a firm if they could all negotiate ex ante. By the common account, the creditors in that bargain would agree on …

Paul Weiss Offers M&A at a Glance for March 2018

By Matthew W. Abbott, Scott A. Barshay, Angelo Bonvino, Ariel J. Deckelbaum, Jeffrey D. Marell and Taurie M. Zeitzer April 20, 2018 by renholding

M&A activity gained momentum in March 2018, capping the strongest opening quarter in the history of this publication. In the U.S., deal volume returned to January levels, increasing by 109.6% to $174.10 billion, and the number of deals increased by …

Blue Sky Banter Podcast: SEC’s Robert Jackson on Dual Class Shares and More

By Reynolds Holding April 19, 2018 by renholding

Robert Jackson, a commissioner of the U.S. Securities and Exchange Commission and a former professor at Columbia Law School, speaks with Reynolds Holding about becoming a commissioner, the problem of perpetual dual class stock, and what the commission can do

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Cleary Gottlieb on Latest Developments in European Leveraged Finance

By David Billington, Andrew Shutter, Carlo de Vito Piscicelli, Ian Chin and Matthew Podger April 19, 2018 by Carly Goeman

EVOLUTION OF THE TRANSFERABILITY CLAUSE

Early 2000s

• Lenders’ freedom to transfer their participations in large leveraged loans has been gradually eroded by developments introduced through the last few credit cycles.
• By the time of the pre-crisis peak in 2007/2008, the

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Detection of Insider Abuse and Fraud Among U.S. Failed Banks

By John P. O’Keefe and Chiwon A. Yom April 18, 2018 by renholding

The U.S. banking industry has exhibited increasing vulnerability to economic cycles since the easing of post-depression era measures designed to insulate banking from economic instability. Between 1934 and 2017 there were 2,758 commercial and savings bank failures.[1] Nearly 80 …

Simpson Thacher Discusses U.S. Treasury Report on Reforming the Community Reinvestment Act

By Lee Meyerson, Keith Noreika, Mark Chorazak and Spencer Sloan April 18, 2018 by Carly Goeman

On April 3, 2018, the U.S. Treasury Department issued a report detailing a number of recommendations for reforming and modernizing the Community Reinvestment Act of 1977 (“CRA”) framework.  The report, which follows through on the commitment made by Treasury in …

The Dell Appraisal and the Business Judgment Rule

By Donald Margotta April 17, 2018 by renholding

In 2013, Michael Dell and his private equity partner, Silver Lake, brought the previously publicly-held Dell Corporation private at a price of $13.75 per share, a price that was approved by Dell’s board and by a 57 percent majority vote …

Debevoise Discusses FinCEN’s Guidance on the Customer Due Diligence Rule

By Satish M. Kini, Zila Reyes Acosta-Grimes and Robert T. Dura April 17, 2018 by renholding

On April 3, 2018, the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) issued long-awaited frequently asked questions (“FAQs”) regarding its new customer due diligence requirements (“CDD Rule”) that become effective on May 11, 2018.1 As a reminder, on May …