Guest post by attorneys at Davis Polk & Wardwell LLP
Recent Delaware Decisions Focus on Director Oversight Liability
Two recent Delaware decisions may give ammunition to stockholder plaintiffs seeking to assert claims against directors under a Caremark theory for failing to comply with their oversight obligations. The decisions—Marchand v. Barnhill (“Blue Bell”) and In re Clovis Oncology, Inc. Derivative Litigation—make clear that courts will not give business-judgment rule deference when presented with allegations that directors acted in bad faith by failing to implement or monitor systems of oversight. Although each case was before the courts on a motion to dismiss and therefore did not finally adjudicate the question of director liability, each decision undoubtedly strengthens the plaintiff’s hand in settlement negotiations needed to avoid trial. Importantly, because these claims are for breaches of the duty of loyalty, directors face the risk of personal liability without the protection of exculpation or indemnification, or possibly even D&O insurance coverage.
Guest post by Michael T. Bindner of Frost Brown Todd LLC
A Federal District Court recently called investments in private companies that participate in a multiemployer pension plan (MPP) a “risky gambit” because of the potential for exposing the MMP’s investors to withdrawal liability. This type of liability is sometimes referred to as a “hidden liability” because, in some situations, investors may have exposure for the liability even if they did not affirmatively assume the liability under a purchase agreement.
Guest post by Angela Humphreys and Michael Geldart from Bass, Berry & Sims PLC and Excellere Partners
In an article published in the ACC Docket, the official publication of the Association of Corporate Counsel, Bass, Berry & Sims attorney Angela Humphreys and co-author Michael Geldart, Chief Compliance Officer and Partner at Denver-based private equity investment firm Excellere Partners, provided 10 tips on how companies can prepare for private equity investment and manage the private equity relationship post-transaction.
Guest post by Todd Overman & Richard Arnholt of Bass, Berry & Sims PLC
Given the continued high volume of mergers and acquisitions (M&A) transactions in the federal marketplace, buyers and sellers need to be aware of the developing body of case law at Government Accountability Office (GAO) and Court of Federal Claims (COFC) regarding how acquisitions are impacting pending bids and the steps that parties can take to protect those bids in certain situations.
Guest post by Carlos Juarez from Mayer Brown LLP, Free Writings + Perspectives
US IPO volume has declined by almost a quarter year-over-year, according to EY’s recent Global IPO trends report. To date, $44.5 billion in proceeds have been raised in 127 IPOs, 23% less than at the end of Q3 2018. The third quarter of 2019 alone saw 39 IPOs in the US, which raised $11.9 billion, down 30% by number of deals. Median deal size in Q3 2019 was $125 million, an 8% increase compared to Q3 2018, and the median post-IPO market cap for companies was $708 million according to the report.
Guest post by Rafael González-Gallarza and Álex Pujol, partners at Garrigues Corporate Department
One way to boost the digital economy in the EU would be to help banks making loans to new businesses. To do this, the institutions themselves need to know about venture debt and other possible products, and the European and national authorities need to support a stable legal framework adapted to the business environment including the area of bank finance.