Financial Reporting Choices of Large Private Firms

By Jennifer J. Gaver, Paul Mason and Steven Utke January 17, 2018 by renholding

In recent years, there has been an increase in the number of firms opting to either forgo the public equity market or exit the market in favor of private financing.[1] Increasingly, financing for private firms comes from private funds, …

Wachtell Lipton Looks at Acquisition Financing in 2017 and the Year Ahead

By Eric M. Rosof, Gregory E. Pessin, Michael S. Benn, Tijana J. Dvornic and John R. Sobolewski January 17, 2018 by renholding

The credit bull market charged through 2017, with many terrific outcomes for opportunistic borrowers. But even in the best of times, borrowers and their advisors should remain nimble and thoughtful, and 2018 brings much to consider, including the impact on …

SEC Chair’s Remarks at Ceremonial Swearing In of New Commissioners Jackson and Peirce

By Jay Clayton January 17, 2018 by renholding

Good Morning.

I hope that everyone had a very nice weekend and enjoyed the holiday on which we commemorate the life and contributions of Dr. Martin Luther King, Jr.

I note that this August will be the 55^th anniversary

…

The Spotify Listing: Can an “Underwriter-less” IPO Attract Other Unicorns?

By John C. Coffee, Jr. January 16, 2018 by renholding

Press reports indicate that Spotify, the music streaming company, is planning an initial public offering in March or April of this year, and that it plans to use a novel “direct listing” approach that has not previously been used at …

Excluding Shareholder Proposals: When Ratification Creates a Direct Conflict

By Keith F. Higgins January 15, 2018 by renholding

The annual scrum between companies and shareholders seeking to have their proposals included in the company’s annual proxy statement is well underway. One of the bases upon which a company may exclude a shareholder proposal from its proxy statement is …

The Governance Implications of Business Disruption

By Michael W. Peregrine and Kenneth Kaufman January 12, 2018 by renholding

In 2018, corporate boards will increasingly be called upon to respond to how innovative competitors disrupt their companies’ business models. These competitors use technology, scale, and sharp insights into consumers to lower prices, improve products and services, and draw customers …

SEC Chair Clayton Talks Fixed Income Markets

By Jay Clayton January 12, 2018 by renholding

I am delighted to welcome all of you to the inaugural meeting of the Fixed Income Market Structure Advisory Committee, or “FIMSAC” as many of us like to call it.[1] This is a significant day for the Commission. There

…

Corporate Governance, Tax Avoidance, and Finance Constraints

By Onur Bayar, Fariz Huseynov and Sabuhi H. Sardarli January 11, 2018 by renholding

In response to greater financial constraints and more costly external financing, firms may avoid corporate taxes to generate funds for investment. In that sense, outside investors may recognize tax management as a value-increasing activity, especially for a financially constrained firm. …

The Costs of M&A Antitrust Review and Acquirer Lobbying

By Jana P. Fidrmuc, Peter Roosenboom and Eden Quxian Zhang January 10, 2018 by renholding

The process of determining whether big mergers comply with antitrust laws is careful and intensive. The Federal Trade Commission and the Department of Justice reported that in 2011 they examined in detail 40 percent, and initiated second request investigations in …

Wachtell Offers 2018 Checklist for Cross-Border M&A Involving U.S. Targets

By Adam O. Emmerich and Robin Panovka January 10, 2018 by renholding

Global M&A accelerated in the fourth quarter of 2017, driven in part by tech expansion and strong economies in several key markets, and there are many signals pointing to a continued strong pace of transactions, including in the U.S. Overall …

The Economics of Disclosure and Financial Reporting Regulation

By Christian Leuz and Peter D. Wysocki January 9, 2018 by renholding

Disclosure and reporting regulation is a central and recurring policy issue that has received significant attention in academic research on accounting, finance, and economics. Further fueling demand for this research are increasingly frequent requests that policy makers and regulators conduct …

Fried Frank Discusses Delaware Ruling that Corporate Recapitalization Required “Entire Fairness” Review

By Gail Weinstein, Steven J. Steinman, Christopher Ewan, Matthew V. Soran and Andrew J. Colosimo January 9, 2018 by renholding

In NRG Yield v. Crane (Dec. 12, 2017), the Court of Chancery dismissed fiduciary duty claims against directors who approved a corporate recapitalization that was proposed by a controller and would perpetuate its control. The reclassification provided for the issuance …

From Texas Gulf Sulphur to Chiarella: A Tale of Two Duties

By Donald C. Langevoort January 8, 2018 by renholding

The Second Circuit’s en banc decision in SEC v. Texas Gulf Sulphur Corp.[1] (“TGS”) is approaching its 50th anniversary, and it’s still well-known for several important holdings. Perhaps the most celebrated (or condemned) accepted the SEC’s argument …

Gibson Dunn Discusses SEC Guidance on How the New Tax Law Affects Disclosure and Accounting

By Ronald O. Mueller, Elizabeth Ising, Michael Scanlon, Brian Lane and Andrew Fabens January 8, 2018 by renholding

On December 22, 2017, the Securities and Exchange Commission’s Office of the Chief Accountant and Division of Corporation Finance (“Staff”) issued important guidance that provides significant relief and helpful answers on some of the accounting and disclosure issues raised by …

How Dual-Class Share Structures Create Agency Costs

By Kirby Smith January 5, 2018 by renholding

A number of companies have recently gone public with dual-class share structures, allowing founders to retain control. Most of these companies’ articles of incorporation contain a provision that requires any merger consideration to be distributed pro rata among all shareholders. …

Morrison & Foerster Discusses CFPB Report on Consumer Credit Card Market

By Obrea O. Poindexter, Oliver I. Ireland, Jeremy R. Mandell and Jennifer S. Talbert January 5, 2018 by renholding

On December 27, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) released its biennial report on the consumer credit card market (“2017 Report” or “Report”), which summarizes its views on the state of the consumer credit card market over the …

Smart Contracts and the Cost of Inflexibility

By Jeremy M. Sklaroff January 4, 2018 by renholding

The blockchain revolution is upon us. In a seemingly endless wave of coverage focusing on everything from financial services to healthcare to supply chain management, commenters are predicting fundamental changes to technology and business models.

Smart contracts – electronic …

CamberView Discusses ISS Changes to Compensation-Related Methodologies

By Abe M. Friedman, Danielle Geier and David Martin January 4, 2018 by renholding

On December 14, ISS released its Frequently Asked Questions (FAQ) documents on U.S. Compensation Policies and U.S. Equity Compensation Plans as well as a whitepaper on Pay-for-Performance Mechanics designed to help stakeholders understand upcoming changes to its compensation-related methodologies. These …

How Should the Law Classify Decentralized Businesses?

By Carla L. Reyes January 3, 2018 by renholding

In July 2017, the Securities and Exchange Commission (SEC) issued a ruling on The DAO, a decentralized smart-contract based investment fund, determining that the tokens it sold were unregistered securities and warning that other initial coin offerings (ICO) may need …

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The CLS Blue Sky Blog

Columbia Law School's Blog on Corporations and the Capital Markets

January 2018