Sellers Alleged Breach of Stock Purchase Agreement Did Not Excuse Buyer in M&A Transaction from Its Own Performance

Guest post by Philip D. Amoa, Associate – McCarter & English, LLP

Original Title: Delaware Law Updates: Sellers Alleged Breach of Stock Purchase Agreement Did Not Excuse Buyer in M&A Transaction from Its Own Performance; Right of Set-Off Did Not Apply to Unliquidated Claims

According to the Merriam-Webster Dictionary, the word “unliquidated” is defined as “not calculated or established as a specific amount.” The Post Holdings case (Post Holdings, Inc., and Michael Foods of Delaware, Inc., v. NPE Seller Rep LLC, C.A. No. 2017-0772 AGB [Del. Ch. Oct. 29, 2018]) shed light on how a party’s right of set-off was construed to have limited applicability. The case also showed how a party may be excused from its obligations under a contract.

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Digital Tokens: Rethinking the term “Cryptocurrency”

Guest post by Daniel DeWolf, Rachel Gholston, and Marine Bouaziz of Mintz Edge

What are the similarities between a one dollar bill, a share of a company, and a pre-paid gift card? The answer is……..not so much! The same is true of the similarities between virtual currencies, security tokens, and utility tokens; in truth, not so much. Yet, if you follow the world of digital tokens in the media and popular press, you would think that virtual currencies, security tokens, and utility tokens are all very similar because they are often concurrently and interchangeably discussed under the topic of “cryptocurrency.”  On the news, in numerous blog articles, and even in investment prospectuses, “cryptocurrency” is used to describe virtual currencies, security tokens, and utility tokens even though they are very different concepts, each of which is subject to different legal frameworks and regulations. While each of these items are created on distributed ledgers using blockchain software, from both a legal and a functional perspective, the similarity ends there. We should re-think the use of the word “cryptocurrency,” and instead use the terms that are specific to the categories that have developed: virtual currencies, security tokens, and utility tokens.  In our descriptions below we provide further information on the meanings of each of these categories.

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Is Delaware Really a ‘Sandbagging State’?

Guest post by Daniel E. Wolf, Partner, Kirkland & Ellis LLP

In the private M&A context, “sandbagging” refers to a buyer, who despite having knowledge of a breach of representation or warranty by a seller at some time before closing, proceeds with the closing and then seeks indemnification from the seller for the breach of representation or warranty of which it had prior knowledge.

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Q4 2018 Prime Unicorn Index Reconstitution Report

The Prime Unicorn Index added 15 constituents and dropped 5 in its quarterly reconstitution, for a total of 112 index components as of Q4 2018.

As more high-performing companies defer or eliminate plans to go public, the demand for information and investment exposure to this growing portion of the American economy has soared. The Q4 Prime Unicorn Index Reconstitution Report provides more information on the new 15 constituents and how they compare against the Index.

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The Prime Unicorn Index Announces Quarterly Reconstitution

Year to Date Return on the Index is 25.16% A record 15 private companies joined the Index, while five left.

The Prime Unicorn Index, the first index to track the share price performance of privately-funded U.S. companies, announced today its quarterly reconstitution. The index, which gives equal-weighting to its constituents, has added a record 15 companies that qualify as Unicorns or Approaching Unicorns. Five companies have left the index – two have had successful IPOs and three were acquired.

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Broker-Dealer and Investment Adviser Agrees to Settle SEC Enforcement Action Arising From a Data Security Incident

Guest post by William R. Daugherty and John Busch, Baker & Hostetler LLP

The U.S. Securities and Exchange Commission (SEC) recently announced a consent order settling an enforcement action brought by the SEC against Voya Financial Advisors Inc. (VFA) in connection with a data security incident that occurred in 2016. VFA is a registered broker-dealer and investment adviser with the SEC. The order memorializes the SEC’s agreement to accept $1 million in settlement of the charges alleging that VFA violated both the SEC’s “Safeguards Rule” and “Identify Theft Red Flags Rule.” This was the SEC’s first enforcement action under the Identity Theft Red Flags Rule.

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