Sullivan & Cromwell Discusses Recent Rulings’ Effects on SEC Use of Administrative Forum

Two cases—one recently accepted for review by the Supreme Court, and another recently decided by the Court of Appeals for the Fifth Circuit—could change the manner in which the SEC brings enforcement actions against those accused of violating federal securities laws.

The Supreme Court Accepts Cochran v. SEC

Congress has empowered the SEC to bring civil enforcement actions seeking a variety of sanctions, including monetary penalties, in either a federal court or in agency proceedings before administrative law judges (ALJs) at the SEC.  On May 16, 2022, the Supreme Court agreed to hear a case about when and where the … Read more

Sullivan & Cromwell Discusses FinCEN Update of Ransomware Advisory

On November 8, 2021, the United States Department of the Treasury Financial Crimes Enforcement Network (“FinCEN”) issued an updated version of its Advisory on Ransomware and the Use of the Financial System to Facilitate Ransom Payments, originally issued in the fall of 2020.  Coming as part of a strengthened and more unified federal government focus on the ransomware threat, the Updated Advisory provides additional guidance to regulated institutions on how to detect potential ransomware payments and augments FinCEN’s call for institutions to report suspected ransomware transactions promptly.  FinCEN released the Updated Advisory contemporaneously with a joint enforcement action against a … Read more

Sullivan & Cromwell Discusses Stablecoins Report of President’s Working Group on Financial Markets

The President’s Working Group on Financial Markets (the “PWG”),[1] the Federal Deposit Insurance Corporation (“FDIC”) and the Office of the Comptroller of the Currency (the “OCC”) published the Report on Stablecoins on November 1, 2021.[2] The Report (1) provides a high-level background description of stablecoins, (2) outlines potential risks and regulatory implications, building on prior publications by other regulators and international regulatory bodies, and (3) sets forth recommendations for legislation (or, pending congressional action, interim measures by regulators) to ensure that “payment stablecoins”[3] and payment stablecoin arrangements are subject to a consistent and comprehensive federal prudential framework. … Read more

Sullivan & Cromwell Discusses SPACs in the UK

On July 27, 2021 the FCA published a policy statement setting out its planned amendments to the Listing Rules to remove the presumption of suspension that applies to special purpose acquisition companies (SPACs) when a potential acquisition target is identified (the ‘de-SPAC’ transaction), subject to certain investor protection features. These changes are geared towards making the London Stock Exchange a more attractive listing venue for SPACs and follow the publication of the UK Government’s review of the UK listing regime, as discussed in our client memo of March 3, 2021, and the subsequent consultation by the Financial Conduct Authority (FCA) … Read more

Sullivan & Cromwell Discusses Delaware Chancery’s Rejection of MAE Claim for Covid Effects

On April 30, 2021, then Vice Chancellor (now Chancellor) Kathaleen McCormick of the Delaware Court of Chancery issued a post-trial decision in Snow Phipps Group, LLC v. KCAKE Acquisition, Inc.[1] ordering specific performance of a private equity purchaser’s obligation to purchase a business.  The Court rejected the buyer’s argument that COVID-19 was reasonably expected to cause a sales decline that would mature into a material adverse effect (“MAE”), noting that, although the company sustained a precipitous drop in sales at the outset of the COVID-19 pandemic, it rebounded in the two weeks prior to termination and was not projected … Read more

Sullivan & Cromwell Discusses New York Legislation on End of U.S. Dollar LIBOR

On April 6, 2021, the State of New York adopted long-anticipated legislation addressing the cessation of  U.S. Dollar LIBOR (“LIBOR”).  The legislation provides a statutory approach to so-called “tough legacy” contracts (contracts that (1) reference LIBOR as a benchmark interest rate but do not include effective fallback provisions in the event LIBOR is no longer published or is no longer representative, and that (2), in the case of overnight, 1-month, 3-month, 6-month and 12-month LIBOR, will remain in existence beyond June 30, 2023, or, in the case of the 1-week and 2-month LIBOR, will remain in existence beyond December 31, … Read more

Sullivan & Cromwell Discusses Amendments to Delaware’s General Corporation Law

On July 16, 2020, Delaware’s Governor signed House Bill 341 (the “Amendments”),[1] amending key provisions of Delaware’s General Corporation Law (“DGCL”).  Among other things, the Amendments modify existing statutory provisions governing boards of directors’ power to adopt emergency bylaws, address other emergency board powers and effect changes to provisions enabling the indemnification of corporate officers.  Except as noted below with respect to emergency powers, holding company mergers, the change to the definition of “officer” in DGCL § 145(c) and appraisal rights, the Amendments became effective on July 16, 2020.

Overview of Signficant Changes

Emergency Bylaws

  • Adoption. DGCL §110, which

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Sullivan & Cromwell Discusses Delaware Chancery Ruling in “Panera” Appraisal Case

The Delaware Court of Chancery ruled in In re Appraisal of Panera Bread Company,[1] following a six-day trial, in a 130-page decision issued on January 31, 2020, that the petitioners received more than fair value for each share of Panera Bread Company (“Panera”) in connection with its 2017 acquisition by JAB Holdings B.V. (“JAB”), with the Court relying on the deal price, minus synergies value, as the metric of fair value for the case.  Because Panera had paid the appraisal petitioners the full merger price as permitted by Delaware law, it sought a refund of the amount of … Read more

Sullivan & Cromwell Discusses Key Considerations for Fiscal-Year 2019 SEC Filings

As issuers prepare their Form 10-K and 20-F filings for fiscal year 2019, they should consider recent changes to Securities and Exchange Commission (“SEC”) disclosure rules, trending disclosure topics and the implementation of critical audit matters disclosure in the audit report. This memorandum summarizes several of those disclosure and accounting considerations, and highlights the key changes to SEC rules that will affect Form 10-K and 20-F filings this upcoming reporting season.

General Disclosure Trends

As issuers prepare their annual SEC reports, they should consider a number of disclosure topics that have continued to receive SEC and investor attention over the … Read more

Sullivan & Cromwell Discusses Resolution-Planning Guidance for U.S. Global Systemically Important Banks

On December 20, 2018, the Federal Reserve and the Federal Deposit Insurance Corporation (together, the “Agencies”) issued final guidance (the “Final Guidance”)[1] with respect to future resolution plan submissions under Title I of the Dodd-Frank Act by the eight U.S. Global Systemically Important Banks (U.S. G‑SIBs), including the plan submissions that are due July 1, 2019.[2]  The Final Guidance adopts, and addresses comments provided in response to, the proposed resolution planning guidance the Agencies issued for comment on June 29, 2018 (the “Proposed Guidance”).[3]  Like the Proposed Guidance and the foundational guidance issued by the Agencies in … Read more

Sullivan & Cromwell Discusses Antitrust Developments at Justice Department

On November 15, 2018, Assistant Attorney General Makan Delrahim delivered remarks at the American Bar Association Antitrust Section Fall Forum in which he discussed three recent settlements of ongoing civil and criminal investigations and highlighted efforts by the Antitrust Division of the U.S. Department of Justice (“Division”) to streamline the merger review process.  There are several unusual aspects to the Division’s recent actions, including the Division’s use of Section 4A of the Clayton Act to recover civil damages where the government has been harmed by anticompetitive conduct and the Division’s willingness to police the sharing of information among competitors even … Read more

Sullivan & Cromwell Discusses Hot Topics in Corporate Governance

Corporate Governance, Surveys, Policies and Reports

  • Lazard Report Finds Increased Shareholder Activism in Q1 2018: Lazard’s Quarterly Review of Shareholder Activism for Q1 of 2018 found increased activism by shareholders in terms of number of campaigns initiated, board seats won and capital deployed. Seventy-three new campaigns were initiated in Q1 2018, compared to 67 in Q1 2017 and 62 in Q1 2016. Sixty-five board seats were won in Q1 2018, compared to 41 in Q1 2017 and 100 for the entirety of 2017. $25 billion in capital was deployed in new campaigns for Q1 2018, the most in any

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