On July 26, 2023, the U.S. Securities and Exchange Commission (the “SEC” or “Commission”) adopted rules to enhance and standardize disclosure requirements related to cybersecurity incident reporting and cybersecurity risk management, strategy, and governance.Continue Reading New SEC Disclosure Rules for Cybersecurity Incidents and Governance and Key Takeaways
SEC and Securities Laws
Nasdaq and NYSE Propose October 2, 2023 as Effective Date in Amendments to its Proposed Clawback Listing Standards
By Michael Albano & Ariel Adler on
[Note: This post has been updated to reflect the SEC’s approval of the Nasdaq and NYSE amendments.]
On Friday, June 9, 2023, the U.S. Securities and Exchange Commission (“SEC”) approved, on an accelerated basis, each of the Nasdaq Stock Market’s (“Nasdaq”) and the New York Stock Exchange’s (“NYSE”) proposed listing standards, as modified by the Exchanges’ respective amendments from last week, implementing the requirement for issuers to adopt and disclose “no fault” clawback policies providing for the recovery of erroneously awarded compensation.[1]Continue Reading Nasdaq and NYSE Propose October 2, 2023 as Effective Date in Amendments to its Proposed Clawback Listing Standards
Private Equity Buyer Permitted to Walk From Deal Based on Capitalization Representation Breach
By Matthew P. Salerno & John A. Kupiec on
In a May 29, 2023 opinion by the Delaware Chancery Court addressing a claim by sellers for specific performance under a merger agreement following buyer’s termination for breach of the capitalization representation, the court found that sellers breached the capitalization representation under the merger agreement based on the post-signing discovery that a former employee held phantom equity in a subsidiary of the target company. Despite buyer’s concession that the financial value of the former employee’s interest in the subsidiary was “minor relative to the deal value,”[1] the court concluded that buyer was entitled to terminate the merger agreement since the capitalization representation was brought down flat at closing (and not subject to any de minimis or materiality qualifier).Continue Reading Private Equity Buyer Permitted to Walk From Deal Based on Capitalization Representation Breach
Corwin Cleansing Denied In Action For Post-Closing Injunctive Relief Under Unocal
On May 1, 2023, the Delaware Court of Chancery addressed an unsettled question under Delaware law—whether a fully informed, uncoerced vote of disinterested stockholders (so-called “Corwin cleansing”[1]) can be applied to defeat claims to enjoin defensive measures under Unocal Corp. v. Mesa Petroleum Co.Continue Reading Corwin Cleansing Denied In Action For Post-Closing Injunctive Relief Under Unocal
Delaware Chancery Court’s Mindbody Decision – Lessons for Private Equity Buyers in Take-Private Transactions
By John A. Kupiec, Mark E. McDonald & Yuan He on
In a recent opinion addressing breaches of fiduciary duties and disclosure violations in connection with a take-private of Mindbody, Inc. by Vista Equity Partners, the Delaware Court of Chancery reinforced the significance (to both buyers and sellers) of avoiding conflicts in a sell-side process and ensuring all material facts are disclosed to the target’s board …
Selected Issues for Boards of Directors in 2023
We have once again asked our colleagues from around our firm to boil down the issues in their fields that boards of directors and senior management of public companies will be facing in the coming year. In the following pages, we present the results for 2023 – focused updates on 18 topics that will surely feature at the top of board agendas throughout the year.Continue Reading Selected Issues for Boards of Directors in 2023