How Directors’ Oversight Duties and Liability under Caremark Are Evolving

By Jennifer Arlen October 13, 2022 by renholding

Corporate law prohibits companies from pursuing profits through criminal misconduct. It uses the fiduciary duties imposed on boards under the Caremark doctrine,[1] and the threat of personal liability of directors for deliberate breach, to help motivate directors to make …

Paul Hastings Discusses Japanese Poison Pills Without Shareholders’ Blessing

By Toshiyuki Arai July 8, 2022 by renholding

In many jurisdictions, poison pills are devised and implemented by the board of directors without shareholders being involved. Since the 2007 Supreme Court case^[1] (in re Bulldog Sauce) in Japan, however, courts have largely relied on the …

Poison Pills in a World of Activism and ESG

By Caley Petrucci and Guhan Subramanian May 23, 2022 by renholding

Since the creation of the poison pill in the 1980s as a response to hostile takeovers, the corporate world has seen the rise of stakeholder governance, ESG, and stockholder activism and a host of other dramatic developments. The stock market …

The Most Dangerous Branch: Is the Supreme Court Dismantling the Administrative State?

By John C. Coffee, Jr. March 7, 2022 by renholding

At first glance, the question posed above may sound slightly paranoid. Still, sometimes a measure of paranoia may be justified. In any event, this column is less a prediction of the future than a review of what is actually happening, …

Peer Pressure in Corporate Earnings Management

By Constantin Charles, Felix von Meyerinck and Markus Schmid January 24, 2022 by renholding

Corporate earnings are an important source of information for many market participants, yet managers have a certain degree of discretion over the earnings that they report. Given this discretion, there is a large literature that tries to understand whether firms …

Paul Weiss Discusses Federal Jury Verdict Finding Cryptocurrency Products Not Securities

By Meredith R. Dearborn, Roberto J. Gonzalez, Jonathan H. Ashtor, Kristina A. Bunting and Emily M. Glavin November 23, 2021 by renholding

On November 2, 2021, a federal jury in Audet v. Fraser found that four cryptocurrency-related products were not securities under the Securities Exchange Act of 1934 and the Connecticut Uniform Securities Act. This case is significant because it appears to …

Weil Gotshal Discusses Boeing Decision and Board Oversight of Product Safety Risks

By Stephen A. Radin and Joshua Glasser September 20, 2021 by renholding

The Delaware Court of Chancery’s recent decision denying a motion to dismiss in In re The Boeing Company Derivative Litigation, 2021 WL 4059934 (Del. Ch. Sept. 7, 2021), reminds directors and their counsellors of the importance of board and …

Gibson Dunn Offers 2021 Mid-Year Securities Litigation Update

By Monica K. Loseman, Craig Varnen, Jefferson E. Bell, Rachel N. Jackson and Alisha Siqueira September 13, 2021 by renholding

The torrid pace of new securities class action filings over the last several years slowed a bit in the first half of 2021, a period in which there have been many notable developments in securities law. This mid-year update briefs …

Corporate Vote Suppression: A Counter-Response to Eric Robinson

By Jeffrey N. Gordon September 1, 2021 by renholding

I appreciate the engagement by long-term pill observer Eric Robinson with my Corporate Vote Suppression piece. I am also glad that he agrees that the pill in The Williams Companies Shareholder Litigation ought to be struck down, though he narrowly …

Comparative Corporate Governance

By Afra Afsharipour and Martin Gelter August 16, 2021 by renholding

With the increasing internationalization of law and legal scholarship, comparative corporate governance has seen a burgeoning volume of research from a practical, theoretical, and empirical perspective. Practically speaking, both internationally and within individual countries, most corporate governance research deals with …

The Fiduciary Principle and the Best Interests of Average Retail Investors

By Joseph A. Franco June 25, 2021 by renholding

The Securities and Exchange Commission recently offered a full-throated explication of its premise that investment advisers are subject to a federally imposed fiduciary standard under the Investment Advisers Act (IAA).[1] The premise, grounded in cryptic Supreme Court dicta, served …

“Public” Mutual Funds

By Jeff Schwartz April 29, 2021 by renholding

The Big 3 mutual-fund managers (BlackRock, State Street, and Vanguard) have amassed incredibly large public-company holdings through the array of mutual funds they oversee. As a result, they now play a pivotal role in corporate governance in many of the …

Sidley Austin Discusses Delaware Chancery’s Latest Guidance on Poison Pills

By Charlotte K. Newell, Beth Berg, Kai Liekefett and Derek Zaba April 6, 2021 by Nisha Chandra

In a tale of what is old is new again, the Delaware Court of Chancery reviewed the propriety of a poison pill — a bulwark of the 1980s takeover era — but in the context of shareholder activism against the …

ESG Investing After the New Labor Department Rule on “Financial Factors”

By Max M. Schanzenbach and Robert H. Sitkoff March 29, 2021 by renholding

In the wake of the U.S. Department of Labor’s new rule on “Financial Factors in Selecting Plan Investments,” adopted last November and effective as of January 12, 2021, some ERISA fiduciaries and their advisers have expressed concern about the permissibility …

The Agency Costs of Sustainable Capitalism

By Anna Christie March 12, 2021 by renholding

At the World Economic Forum in Davos in January 2020, Larry Fink – the chief executive of the world’s largest asset manager, BlackRock – wore a climate change-themed scarf. It featured the “warming stripes” visual, where the color …

Gibson Dunn Offers 2020 Year-End Securities Litigation Update

By Robert F. Serio, Brian M. Lutz, Monica K. Loseman, Jefferson E. Bell and Mark H. Mixon, Jr. February 23, 2021 by renholding

Notwithstanding the ongoing spread of COVID-19 and unprecedented changes in daily life and the economy, the second half of 2020 marched on to the steady drumbeat of securities-related lawsuits we have observed in recent years, including securities class and stockholder …

Fried Frank Discusses the New Paycheck Protection Program

By Gail Weinstein, Michael T. Gershberg, Libin Zhang, David L. Shaw and Randi Lally January 6, 2021 by renholding

On December 27, 2020, the Economic Aid Act (EAA) was signed into law to provide financial relief to small businesses suffering from the impact of the COVID-19 pandemic. The EAA amends the PPP loan program that was established earlier this …

SEC Chair Clayton Speaks on Regulations for Funds’ Use of Derivatives

By Jay Clayton October 29, 2020 by renholding

Today [October 28], we are considering a new rule to provide an updated and comprehensive regulatory framework for the use of derivatives by registered investment funds, including mutual funds and exchange traded funds (ETFs). I have spoken before on the

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The Conflict Between BlackRock’s Shareholder Activism and ERISA’s Fiduciary Duties

By Bernard S. Sharfman September 29, 2020 by renholding

BlackRock, an investment adviser that primarily markets and manages index funds to millions of passive investors around the globe, has become a leading shareholder activist. Based on the extremely large amount of assets it has under management ($7.3 trillion), its …

ESG, Common Ownership, and Systematic Risk: How They Intersect

By John C. Coffee, Jr. September 14, 2020 by renholding

This brief column will assert that three developments that seem unrelated are in fact closely related and may soon impact U.S. corporate governance with the force of a freight train. This column summarizes a longer article just posted by this …

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