Guest post by Nick Jones, R. James Straus and Jason C. Williams of Frost Brown Todd LLC
Private equity (“PE”) involvement in the franchising world has increased in recent years. Though historically PE firms have focused primarily on investment in franchisors, PE firms have in recent years increased their focus on franchisee-side investment. Understanding the franchisor’s perspective on PE investment into its franchisee community can help PE firms more effectively negotiate their relationship with the franchisor.
Guest post by Patricia S. Hofstra of Duane Morris LLP
As physician practices, health care entities, private equity and venture capital firms consider physician practice investments and acquisitions, the players need to address the unique nature of physicians and physician practices in order to assure a successful deal. Peter Drucker is quoted as saying that “Only three things happen naturally in organizations: friction, confusion and underperformance. Everything else requires leadership.” With respect to physician practice investments and acquisitions, communication is key to the ultimate success of the transaction.
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.