You don’t need to spend much time in New York City to understand that in recent years, everyone has developed their own book of horror stories featuring nightmarish delays on the city’s long-deteriorating subway system and countless hours spent locked in traffic jams in and around Manhattan. On March 31, 2019, Governor Andrew Cuomo and the New York State legislature took steps to fix the subway system by passing a budget which includes a “congestion pricing” plan for New York City.[1] Congestion pricing is a policy which imposes fees on drivers in crowded urban environments in order to reduce traffic…
Author: mzacharias
Statutory Inspection Rights Alongside the rights to vote and sell shares, the ability to inspect corporate books and records is an important stockholder right. This type of action is frequently used to allow stockholders to investigate corporate mismanagement, prepare for a proxy fight, or possibly serve as a precursor to derivative litigation.[1] To mitigate potential stockholder abuse of this right, statutes and courts demand a showing of a “proper purpose” for the inspection.[2] Many courts, including ones in Delaware, require that stockholders present “some evidence” to suggest a “credible basis” for corporate mismanagement or a breach of fiduciary duty to…
The Wall Street Journal reports that since 2011, “three dozen hedge funds have converted into family offices.”[1] Recent statistics indicate that family offices hold a combined assets under management (AUM) of over $4 trillion.[2] And yet, they are largely operating under the radar, as news coverage and public knowledge regarding family offices is scarce. This blog post will explore (1) the origins of family offices; (2) their current legal status under U.S. securities regulations; and (3) the implications of their recent surge in popularity. The Family Office Exchange defines a family office as “a unique family business that is created to provide…
To generate profits and protect their intellectual property rights, it is important that companies establish and maintain their trade secrets.[1] However, in some cases, companies can benefit from cooperation as opposed to competition.[2] There are instances in which companies may band together in order to leverage their own positions.[3] By doing so, companies can efficiently pool their resources to fuel their research and development departments while enjoying shared protection of their intellectual property.[4] This is precisely the type of agreement that Cambridge Antibody Technology, Micromet AG, and Enzon Pharmaceuticals have engaged in.[5] Pursuant to this agreement, each company is authorized…
Wells Fargo & Company (“Wells Fargo”) is an American multinational financial services company.[1] It currently holds the title as one of the reigning ‘Big Four Banks’ in the United States.[2] Its current market capitalization of $222.96 billion makes it the world’s fourth largest-bank,[3] and with $1.95 trillion in total assets, it also qualifies as the third largest bank in the U.S.[4] In 2013, Wells Fargo was recognized by the Environmental Protection Agency for its excellent, pioneering work in the reduction of greenhouse gas emissions.[5] Certainly, Wells Fargo is an exemplary model for any company seeking to reach the pinnacle of…
On February 19, 2019, the Securities and Exchange Commission (“SEC”) voted to propose an expansion of a reform implemented by the Jumpstart Our Business Startups Act (“JOBS Act”), where emerging growth companies (“EGCs”) have been permitted to gauge investor interest in a possible initial public offering (“IPO”) by allowing discussions with particular investors prior to filing a registration statement.[1] According to SEC Chairman Jay Clayton, “[e]xtending the test-the-waters reform to a broader range of issuers is designed to enhance their ability to conduct successful public securities offerings and lower their cost of capital, and ultimately to provide investors with more…
An analysis of Wall Street’s 2018 trading performance shows stock indexes registering at an unprecedented low since the 2008 financial crisis.[1] According to the S&P 500 and Dow Jones Industrial Average, 2018 experienced a bull market, [2] and sustained a crippling 6.2 and 5.6 percent in losses, respectively.[3] In fact, 2018’s financial data further reveals that the NASDAQ Composite plunged 3.9 percent, eliminating a decade of gains.[4] But this begs the question: what was the cause of all this turmoil in the market? Generally speaking, a market’s corrosion is not attributable to any one cause, but is instead the result of many…
Appraisal Proceedings & Recent Trends Pertaining to Waivers In business acquisitions and related corporate transactions, an important consideration is the possibility of appraisal proceedings. In Delaware, where over half of the Fortune 500 companies are incorporated,[1] appraisal rights are more narrowly proscribed [2] and are laid out in Delaware General Corporation Law (“DGCL”) § 262. In this process, the court “shall determine the fair value of the shares,” exclusive of elements of future value pertaining to the merger.[3] The judge has a “statutory obligation to engage in an independent valuation exercise” which can include analyzing discounted cash flow, comparable companies,…
Companies typically strive to increase profits by winning over consumer favoritism. As such, an organization may focus on building the company’s trade secret portfolio and fiercely protecting its competitive edge of confidential business information.[1] A trade secret is broadly defined as, “all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, design, prototype…”[2] A trade secret owner must employ “reasonable measures” to ensure confidentiality of such information to seek protection against its disclosure.[3] The information must carry its own “economic value, actual or potential.”[4] Economic value can be shown where…
In recent years, the placement of tariffs on imported goods from other countries has become a much-talked-about topic. There is no doubt that a great deal of this discussion has been generated by President Trump’s reliance on tariffs as a means of conducting foreign policy.[1] To an extent, the recent resurgence of the tariff, as a tool of American foreign relations, represents a departure from a firm commitment to free trade that has been a mainstay of American diplomacy since the end of World War II.[2] To understand the value of tariffs in the modern context, it is useful to…