Columbia Law School
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Corporate Governance
The Derivative Nature of Corporate Constitutional Rights
The role of money and business interests in politics continues to stir controversy. As the nation begins another presidential cycle that is expected to break spending records, we will likely hear analysts argue that the Supreme Court’s decision five years …
Adjudicating Corporate Auctions
When a board of directors resolves to sell the corporation, it must structure the sale so as to obtain the highest price reasonably available. In the landmark case Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., the Delaware Supreme …
Gibson Dunn discusses Delaware Supreme Court Ruling Interpreting Advance Notice Bylaws in Favor of Stockholder Seeking to Propose Business and Nominate Directors
On July 2, 2015, in Hill International, Inc. v. Opportunity Partners L.P., No. 305, 2015, the Delaware Supreme Court affirmed a Court of Chancery decision that Opportunity Partnership L.P. (the “Fund”), a stockholder in Hill International, Inc. (“Hill” or …
Thoughts on the Evolution of Stock Exchanges
Can stock exchanges adapt to the challenges of today’s capital markets? As “self-regulatory organizations,” U.S. stock exchanges once enjoyed a nearly exclusive role in coordinating information and trading through interwoven regulatory, mutual, and commercial arrangements with public companies, brokers, and …
Dirks and the Genesis of Personal Benefit
In United States v. Newman, 773 F.3d 438 (2nd Cir. 2014), the Second Circuit overturned the insider trading convictions of two hedge fund managers who received material nonpublic information from public companies via an extended tipping chain. The …
Simpson Thacher discusses SEC Charges Against Computer Sciences Corporation and its Former Executives for Accounting Fraud, Invoking Sarbanes-Oxley’s Clawback Provision
On June 5, 2015, the Securities and Exchange Commission (“SEC”) entered into settled administrative cease-and-desist proceedings with Computer Sciences Corporation (“CSC”) and some of its former executives due to the company’s alleged manipulation of financial results and concealment of problems …
The Power of Shareholder Votes: Evidence from Director Elections
Our paper titled “The Power of Shareholder Votes: Evidence from Director Elections” aims to answer the question: Do shareholder votes matter in uncontested director elections? In principle, shareholders who own a firm should be free to pick the board members …
Gibson Dunn discusses Delaware Court of Chancery Opinion Clarifying Director and Officer Advancement Rights
On May 28, 2015, Chancellor Bouchard of the Delaware Court of Chancery issued an opinion clarifying and strengthening the rights of a former director and officer to receive mandatory advancement under a corporation’s charter. In Blankenship v. Alpha Appalachia Holdings, …
News From California: The 9th Circuit and the SEC Challenge New York
This column will focus on two new and unrelated developments linked only by the fact that they both emanate from California: (1) the Ninth Circuit has handed down a significant decision on insider trading—United States v. Salman[1]—that disagrees …
What’s the Value of a TBTF Guaranty? Evidence from the G-SII Designation for Insurance Companies
Since AIG’s bailout in September 2008, the role of large, complex insurance firms in the global financial system has received much attention. Concern about the global operations, interconnectedness, and non-traditional activities of these large firms prompted the Financial Stability Board …
Practical Board Guidance based on Chief Justice Strine
Both “deal” and “governance” counsel will enjoy sharing with corporate clients the highly practical guidance provided by Chief Justice Leo E. Strine, Jr. in a newly published article in The Business Lawyer.[1] In his article, the Chief Justice …
Returns on Hiring Public Officials
If you think nothing is impossible, try slamming the revolving door of Washington. Despite widespread frustrations, it continues to shuffle employees between government and corporate jobs, and it’s not expected to stop spinning any time soon.
Many on the street …
Simpson Thacher discusses Delaware Chancery Court Ruling that Self-Interested Director Compensation Decisions May, Under Certain Circumstances, Be Subject to Entire Fairness Review
A recent Delaware Chancery Court decision confirms that, as the court held three years ago in Seinfeld v. Slager, there is no shareholder ratification defense for self-awarded director compensation granted under a stockholder-approved option or bonus plan that lacks …
Stock Price Response to Non- and Deferred Prosecution Agreements
In response to perceived corporate governance shortcomings in major U.S. corporations, the U.S. Department of Justice, starting in 2002, substantially increased the execution of non- and deferred prosecution agreements (N/DPAs). High profile N/DPAs and plea agreements executed in 2012 and …
Which Aspects of Corporate Governance Matter in Emerging Markets: Evidence from Brazil, India, Korea, and Turkey
Emerging markets are increasingly important destinations for international capital flows. Yet these markets pose important risks for investors, in addition to the business risks present in every market. For example, in some countries, many public firms are part of family …
When Fiduciary Duties and Entrepreneurial Innovation Collide: AngioScore v. TriReme
Some legal rights and obligations are so venerated and longstanding that they have become virtual absolutes—categorical imperatives that trump other less urgent considerations. But what happens when two such absolutes collide? This was a question that the US District Court …
Corporate Bonds, Bondholders and Corporate Governance
In recent years, corporate bond markets have become an increasingly important source of corporate finance, especially for non-financial companies. Given this worldwide trend, it is crucial for policy makers, regulators and market participants to have access to a comprehensive overview …
The Effect of Regulatory Alteration on Management Earnings Forecast?
In 1999 Kotsovolos, the leading Electronics Supplier in Greece, reported in its initial public offering prospectus an earnings forecast that missed its actual earnings, as announced by its first annual report, by 234%. This inaccuracy is attributed to the mandatory …
Wachtell Lipton discusses SEC’s Proposed Compensation Clawback Rules
The SEC proposed its long-awaited compensation clawback rules under the Dodd-Frank Act. The proposed rules would require public companies to adopt and enforce compensation recovery policies that recoup from executive officers incentive compensation resulting from specified accounting restatements. Failure to …