Sky Blog
The sharp increase in mergers and acquisitions litigation has generated widespread skepticism about the utility of such cases and, along with it, skepticism about the role played by the plaintiffs’ law firms that bring them. Deal suits are broadly perceived …
The pending mergers of Johnson Controls, Inc. with Tyco International plc and Pfizer Inc. with Allergan plc means the value of inversions in the pipeline ($185B) has nearly reached the total value of all inversions completed between January 1, 2010 …
A January 2016 study, Short-Term Investors, Long-Term Investments, and Firm Value, by Martijn Cremers, Ankur Pareek and Zacharias Sautner, provides substantial “empirical” evidence for the fact that, in the current corporate governance environment, short-term investors possess the undue …
On January 22, 2016, Chancellor Andre Bouchard of the Delaware Court of Chancery issued an important decision in In re Trulia, Inc. Stockholder Litigation—likely hammering the final nail in the coffin of “disclosure-only” settlements with broad releases of liability …
The message of the Dow/DuPont merger and split up is simple: No firm is today “too big to target.” Activists can see the transaction as evidence that, even in the rare case where they lose a proxy fight (as they …
There is a frenzied rush for shareholders to get a new ‘right”, the right to put up their own nominees for board membership. Boards of directors, so goes a dominant opinion, are not to be fully trusted to pick the …
On November 19, 2015, in Depomed, Inc. v. Horizon Pharma plc, the Superior Court of California, County of Santa Clara granted Depomed’s request for a preliminary injunction to enjoin Horizon’s hostile exchange offer to acquire Depomed. The injunction was …
How different is private equity from Berkshire Hathaway? The phrase “private equity” has a certain ring to it, suggesting providing shareholder capital to buy and hold businesses. In fact, most private equity firms use substantial debt to acquire companies, charge …
Over the last few years, hedge fund activism has received a great deal of coverage in financial media (and in the mainstream press), has triggered heated debates and been the focus of much academic research. Saviour of capitalism for some, …
In an important ruling last week, the Delaware Supreme Court reaffirmed that control of Delaware companies lies in the boardroom and held that the deferential business judgment rule is the “appropriate standard of review for a post-closing damages action” when …
Takeover disputes can be fiercely contested. Given this, there is an important question about the forum for these disputes. Traditionally, takeover disputes were resolved by the courts. However, in recent years, there has been a trend to have these disputes …
This week, the Federal Trade Commission announced a settlement of charges that Third Point, a well-known activist investor, improperly relied on the “investment-only” exemption to the reporting obligations under the Hart-Scott-Rodino Act. This enforcement action is a harsh reminder of …
Crown jewel lock-up options, a deal protection device common during the 1980s mergers and acquisitions boom, are back. My forthcoming paper, Fleecing the Family Jewels,[1] is the first scholarly paper to examine the reemergence of crown jewel lock-ups …
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 …
Among practitioners, it is a customary cliché to say that all proxy contests—just like all trials—are unique and idiosyncratic. There is some truth to that easy generalization, but it also misses the forest for the trees. Some obvious truths stand …
On March 29, 2015, the National Association of Insurance Commissioners (the “NAIC”) Private Equity Issues Working Group (the “PEI Working Group”) adopted a new section to be added to the NAIC’s Financial Analysis Handbook that provides a narrative guidance to …
In addition to change-of-control benefits (“golden parachutes”), executives often negotiate for personal side-payment at the same time that they are bargaining with an acquirer over the sale of their firm. Side-payments differ from golden parachutes in that they are negotiated …
A watershed moment is coming for shareholder activism and corporate governance generally, as the proxy contest brought by Trian Management Fund, seeking effectively to break up DuPont, enters its final stages (with the vote being less than a month away). …
Delaware corporations and their advisers have been eagerly awaiting the response of the Delaware legislature to the recent surge in appraisal arbitrage and judicial pronouncements allowing this activity and suggesting that lawmakers should step in if they perceive a problem. …
A triad of recent decisions out of the Delaware Court of Chancery highlight the urgent need for legislative reform in Delaware to ameliorate the risk that appraisal arbitrage – now a multibillion dollar industry – poses to transactional vitality and …