Corporate Law

• 2/15/2010

  Advising Corporate Clients Requires Judgment Call, With No Simple Answers

  When advising on difficult legal questions, corporate counsel can rarely give the unequivocal answer that clients seek. Instead, counsel must analyze the risks and benefits of all possible courses of action, make a judgment call on the best choice, and explain it to the client who has the final business decision. Attorneys James Ball and Trevor Truman illustrate the point with three brief case studies.

• 12/11/2009

  Leaving Officers In The Dark On Fiduciary Duties Is Too Risky

  Although corporate officers hold significant fiduciary duties, corporate statutes, courts, scholars, and even the plaintiffs' bar largely ignore them. Professors Lyman Johnson and Dennis Garvis study the extent to which inhouse counsel advise officers on their duties and find it insufficient.

• 10/15/2009

  In Defense Of Delaware’s Developing Jurisprudence On Disclosure

  Law profesor Robert Thompson posits that the significant dichotomy in corporation law these days is between state and federal governance regulation. In this context, he examines Delaware's developing jurisprudence of disclosure as a fiduciary duty and finds it a promising, robust deterrent to federal hegemony.

• 9/10/2009

  Breaching Good Faith Under Corporate And Contract Law

  Corporate law professor Mark Loewenstein demonstrates how the vagaries of Delaware corporate case law leave some courts treating the duty (and breach) of good faith as a fiduciary concept while others are applying contract law as the lens. In the corporate arena, courts are fashioning a concept of good faith that may require examination of a director's subjective intent.

• 4/10/2009

  Tread Carefully When Investigating Employees For Wrongdoing

  Attorney David Bayless reminds inside counsel of necessary safeguards when interviewing employees during internal investigations. Employees often assume, erroneously, that house counsel represents their interests. Counsel cannot maximize the employer's position while jeopardizing the employees' legal rights, but sometimes ethical concerns do not preclude dual representation.

• 3/12/2009

  Delaware Cases Contain Surprises On Fee Advancement Bylaws

  Over the last several months, the Delaware chancery court has offered up an surprise. In three cases, courts took interesting stances on bylaws that advance fees and expenses to directors and officers defending a suit for breach of their fiduciary duty. Attorneys John Mark Zeberkiewicz and Blake Rohrbacher outline the holdings and suggest protective responses.

• 2/16/2009

  Amend Corporate Bylaws To Minimize The Risk Of Surprise Activism

  To render it more difficult for activist shareholders to present proposals before management can marshal its defenses, a company could modify its bylaws. Attorneys Keith Gottfried and Barry Genkin propose ten modifications that the board of directors can make without shareholder approval, with an eye to offsetting stealth attacks by activists.

• 2/16/2009

  Revisiting The Void/Voidable Distinction For Stock Issued Defectively

  Corporate counsel sometimes must opine on whether a defect in issuing stock is substantive (which voids the issuance) or technical (which can be cured by board ratification). The void/voidable distinction is a judicial gloss, argue attorneys Stephen Bigler and Seth Barrett Tillman, and not a requirement under Delaware statutes.

• 1/21/2009

  Attorney Priviledge Upheld For Draft Regulatory Documents

  According to SEC Actions blog: "In Roth v. Aon Corporation, Case No. 04 C 6835 (N.D. Ill. Ruling Jan. 8, 2009), the district court concluded that a draft of part of a Form 10-K transmitted to in-house counsel and several employees of the company during preparation remained privileged when the final Form 10-K was filed with the SEC. The opinion is important for those who prepare disclosure documents. It is also significant to the work of in-house counsel since it can be difficult to draw the line between their privileged legal work and non-privileged business dealings."

• 5/12/2008

  Protecting The Law Firm That Renders Third-Party Legal Opinions

  Lawyers routinely render closing opinions to third parties, but if fraud destroys the deal, defrauded parties typically regard the opining law firm as a deep pocket. Potentially disastrous suits recently targeted three major firms, yet little attention has been given to how a law firm can protect itself. Press for arbitration agreements or a cap on damages, urge corporate attorney Donald Glazer and law professor Jonathan Lipson.

• 5/8/2008

  SEC Staff Recommends Commission Action to Facilitate Investment in Small Business

  Washington, D.C., May 7, 2008 - The Securities and Exchange Commission's Division of Investment Management said today that it has prepared a recommendation for consideration by the Commission to increase the availability of capital to certain smaller companies that do not have ready access to the public capital markets or other forms of conventional financing.

• 5/10/2007

  Walking The Tightrope Of Professional Responsibility For Corporate Counsel

  Attorney E. Norman Veasey, who was the chief justice of the Delaware Supreme Court, and attorney Christine Di Guglielmo discuss the tensions that arise for lawyers serving as counsel for a corporation. Counsel's interaction with the board can sometimes clash with the relationships between the lawyer and the CEO (who may hire, fire, and set compensation for in-house counsel). Providing both legal and business advice can also be a source of conflicts.

• 2/15/2007

  Proactive Monitoring Of Financial Information Is More Trouble Than Benefit

  Although some commentators urge corporate counsel to proactively monitor their corporate accounting and reporting, distinguished law professor Steven Schwarcz disagrees. He prefers a reactive approach to financial reporting problems, arguing that the cost of active monitoring outweighs the expected incremental benefits and that a reactive system can achieve the same benefits at a lower cost.

• 2/15/2007

  Advice For In-House Counsel On Monitoring Financial Fraud

  The ACC's Deputy General Counsel exhorts in-house lawyers to accept a larger role in steering companies clear of financial fraud. Deborah House highlights a series of danger signals that should provoke a heightened scrutiny of transactions and internal systems for culpable abuse.

• 12/18/2006

  Stock Buybacks May Create A Conflict Of Interest

  Executives and directors usually extol the many benefits to stockholders when justifying a share buyback program instead of a dividend declaration. Yet the primary benefit may be to the executives who want to sell shares they received by exercising their stock options. For Randy Myers, the buyback decision is grounded in a troubling conflict of interest.