Delaware Chancery Court Enjoins Stockholder Vote For Lack Of Adequate Disclosures In Proxy Statement
In Maric Capital Master Fund, Ltd. v. PLATO Learning, Inc., C.A. No. 5402-VCS (Del. Ch. May 13, 2010), the Court of Chancery of the State of Delaware granted plaintiff Maric Capital Master Fund’s (“Maric”) motion for a preliminary injunction to halt a stockholder vote on a proposed merger in which Thoma Bravo, LLC (“Thoma Bravo”) would acquire PLATO Learning, Inc. (“PLATO”). Although the court held that Maric failed to demonstrate a likelihood of success on the merits of its assertion that the directors of PLATO failed to meet their duties under Revlon, Inc. v. McAndrews & Forbes Holdings, Inc., 506 A.2d 173 (Del. 1986), the court nonetheless enjoined the vote based upon a determination that three specific disclosures in the proxy statement were materially misleading. The court ordered that corrective disclosures on those items be issued before the vote could proceed. This decision reflects the Chancery Court’s efforts to ensure that proxy disclosures in advance of stockholder votes are not materially misleading.
Continue Reading Questions & commentsIn A Case Of First Impression, Delaware Chancery Court Holds That Preferred Stockholders Have The Right To Bring Derivative Actions
In MCG Capital Corporation v. Maginn, Civil Action No. 4521-CC, 2010 Del. Ch. LEXIS 87 (Del. Ch. May 5, 2010), the Delaware Court of Chancery granted in part and denied in part the defendants’ motion to dismiss plaintiff preferred stockholder’s complaint alleging both derivative and direct claims. In doing so, the court, for the first time, set forth a rule allowing preferred stockholders to bring derivative suits absent an express limitation in the company’s articles of incorporation or other appropriate document.
Continue Reading Questions & commentsArizona Federal District Court Holds That Securities & Exchange Commission Need Not Allege Wrongdoing On The Part Of CEO When Pursuing Reimbursement Under Section 304 Of Sarbanes-Oxley Act
In Securities & Exchange Commission v. Jenkins, No. CV-09-1510-PHX-GMS, 2010 WL 2347020 (D. Ariz. Jun. 9, 2010), the United States District Court for the District of Arizona held that the responsibility of a CEO under Section 304 of the Sarbanes-Oxley Act of 2002 (the “Act”) to reimburse an issuer for bonuses, incentive compensation and stock sale proceeds he or she received in the year prior to a restatement of the issuer’s financial statements does not require a showing that CEO committed or even knew of misconduct that led to the restatement. This decision marks the first time a court has applied Section 304 of the Act in the absence of allegations that the targeted CEO personally committed any wrongdoing, enforcing strict liability of CEOs and CFOs in the event of a restatement due to corporate (as opposed to their own) misconduct.
Continue Reading Questions & commentsDelaware Chancery Court Dismisses Derivative Plaintiff's Section 220 Books And Records Action
In King v. VeriFone Holdings, Inc., C.A. No. 5045-VCS (Del. Ch. May 12, 2010), the Delaware Court of Chancery dismissed a derivative plaintiff’s Section 220 books and records action on the ground that the purpose for the request — to bolster demand futility allegations in the prematurely filed derivative complaint — was improper. The court criticized plaintiff for filing a derivative complaint before counsel was able to complete his investigation, solely to “win the race to the courthouse.” This decision reflects the Chancery Court’s willingness to impose consequences on plaintiffs who do not follow appropriate procedures in their haste to obtain lead plaintiff status.
Second Circuit Affirms Dismissal Of Securities Fraud Complaint, But Rejects Reform Act Safe Harbor Defense
In Slayton v. American Express Co., No. 08-5442, 2010 WL 1960019 (2d Cir. May 18, 2010), the United States Court of Appeals for the Second Circuit affirmed the dismissal of a securities fraud class action against American Express Company (“Amex”) on the ground that the complaint did not plead a strong inference of defendants’ scienter. While the court affirmed dismissal, it rejected Amex's argument that the alleged misrepresentation was protected by the “safe harbor” for forward-looking statements set forth in the Private Securities Litigation Reform Act of 1995 (“Reform Act”). In doing so, the Court set forth useful guidance for determining when a statement is “forward-looking” and whether cautionary warnings are sufficiently “meaningful” to trigger the protection of the statute’s safe harbor.
Third Thursday Emerging Company Webinar: Preparing for the M&A Exit
Third Thursday Emerging Company Webinars
November 18, 2010
WebEx
Thursday, November 18, 2010
12:00 p.m. - 1:00 p.m.
Presented by Steve LaSala, Partner, Sheppard Mullin
This activity complies with standards for Minimum Continuing Legal Education prescribed by the California State Bar and is approved for 1.0 hour of MCLE credit. Sheppard, Mullin, Richter & Hampton LLP is a State Bar of California approved MCLE provider.
This program has been approved in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of 1 credit hour which may be applied toward the Areas of Professional Practice requirement, and is suitable for non-transitional attorneys.
The WebEx link and dial in will be e-mailed to you once you register. MCLE certificates will be distributed following the webinar.
Questions & comments
Third Thursday Emerging Company Webinar: The Return of the IPO as a Viable Exit - Key Indicators, Considerations and Early Action Items
Third Thursday Emerging Company Webinars
September 16, 2010
WebEx
Thursday, September 16, 2010
12:00 p.m. - 1:00 p.m.
Presented by Louis Lehot, Partner, Sheppard Mullin
Is the IPO drought finally over? Is another IPO boom around the corner? With approximately 119 IPOs in the pipeline and an average of nine pricings per month, versus some months with none at all last year, there is a renewed optimism in the IPO market. A successful IPO is now possible for a strong business with strategic timing. Nonetheless, there are still valid hesitations until recent IPOs show performance and traction as a group.
This webinar will discuss current trends in the IPO market, key considerations before embarking on a process, as well as critical early action items a company should take to be ready to go public in the months ahead.
We hope you'll log in for a timely and lively discussion.
This activity complies with standards for Minimum Continuing Legal Education prescribed by the California State Bar and is approved for 1.0 hour of MCLE credit. Sheppard, Mullin, Richter & Hampton LLP is a State Bar of California approved MCLE provider.
This program has been approved in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of 1 credit hour which may be applied toward the Areas of Professional Practice requirement, and is suitable for non-transitional attorneys.
The WebEx link and dial in will be e-mailed to you once you register. MCLE certificates will be distributed following the webinar.
Questions & comments
Third Thursday Emerging Company Webinar: Doing Business With The Government
Third Thursday Emerging Company Webinars
August 19, 2010
WebEx
Thursday, August 19, 2010
12:00 p.m. - 1:00 p.m.
Presented by Anne Perry, Partner, Sheppard Mullin
This activity complies with standards for Minimum Continuing Legal Education prescribed by the California State Bar and is approved for 1.0 hour of MCLE credit. Sheppard, Mullin, Richter & Hampton LLP is a State Bar of California approved MCLE provider.
This program has been approved in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of 1 credit hour which may be applied toward the Areas of Professional Practice requirement, and is suitable for non-transitional attorneys.
The WebEx link and dial in will be e-mailed to you once you register. MCLE certificates will be distributed following the webinar.
Questions & comments
Third Thursday Emerging Company Webinar: Dealing With Vendors/Distributors and What Happens if They Fail
Third Thursday Emerging Company Webinars
July 15, 2010
WebEx
Thursday, July 15, 2010
12:00 p.m. - 1:00 p.m.
Presented by Ed Tillinghast, Partner, Sheppard Mullin
This activity complies with standards for Minimum Continuing Legal Education prescribed by the California State Bar and is approved for 1.0 hour of MCLE credit. Sheppard, Mullin, Richter & Hampton LLP is a State Bar of California approved MCLE provider.
This program has been approved in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of 1 credit hour which may be applied toward the Areas of Professional Practice requirement, and is suitable for non-transitional attorneys.
The WebEx link and dial in will be e-mailed to you once you register. MCLE certificates will be distributed following the webinar.
Third Thursday Emerging Company Webinar: OUTSOURCING AND OFFSHORING: Business Strategies and Legal Considerations for Emerging Companies
Third Thursday Emerging Company Webinars
June 17, 2010
WebEx
Thursday, June 17, 2010
12:00 p.m. - 1:00 p.m.
Presented by Riaz Karamali, Partner, Sheppard Mullin
This seminar will begin with an examination of how emerging companies can leverage their resources by employing an outsource strategy for various areas of their business, and how the strategy should evolve as the company grows. We will look at best practice approaches to specific subject matter areas such as software development, IT infrastructure, design, manufacturing, or payroll administration, and will cover the pros and cons of onshore, offshore and near-shore outsourcing. In addition, we will take a detailed look at how a customer's business interests and intellectual property rights can best be protected in the contracts documenting the outsource relationship, and will take a hard look at the more contentious issues that typically come up in negotiations with a service provider.This activity complies with standards for Minimum Continuing Legal Education prescribed by the California State Bar and is approved for 1.0 hour of MCLE credit. Sheppard, Mullin, Richter & Hampton LLP is a State Bar of California approved MCLE provider.
This program has been approved in accordance with the requirements of the New York State Continuing Legal Education Board for a maximum of 1 credit hour which may be applied toward the Areas of Professional Practice requirement, and is suitable for non-transitional attorneys.
The WebEx link and dial in will be e-mailed to you once you register. MCLE certificates will be distributed following the webinar.
Questions & comments
