On March 25, 2022, Senator Bernie Sanders (I-VT) introduced a new bill, Ending Corporate Greed Act, which coincides close in time with the release of Treasury’s Greenbook, General Explanations of the Administration’s Fiscal Year 2023 Revenue Proposals. The two proposals have different approaches to increasing revenue, and it seems unlikely that both could be supported
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Perspectives on M&A from Gray Reed’s Mergers and Acquisitions/Private Equity Practice
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Delaware: A Confirmed Pro-Sandbagging Jurisdiction
In an opinion of significance to M&A practitioners, the Delaware Court of Chancery recently made it clear that Delaware law allows a buyer in an acquisition to “sandbag” a seller if the acquisition agreement allows for sandbagging or if the acquisition agreement is silent on the subject. “Sandbagging” only applies when a buyer knows that…
Delaware Court Provides Clarity Regarding Anti-Bootstrapping Rule
On January 27, 2022, in Levy Family Investors, LLC v. Oars + Alps LLC the Delaware Court of Chancery (the Court) released a memorandum opinion providing clarity with regard to Delaware’s infamous “Anti-Bootstrapping Rule” (also referred to herein as the Rule). While the caselaw on the Anti-Bootstrapping Rule has been described as “muddled,” the Rule…
Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act – Five Key Takeaways
On March 3, 2022, President Biden signed into law the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (the Act), prohibiting employers from enforcing predispute arbitration agreements and class action waivers that concern sexual harassment and sexual assault claims. The Act amends the Federal Arbitration Act (FAA) with respect to the…
Delaware Court Subjects de-SPAC Transaction to Entire Fairness Standard of Review
In In re MultiPlan Corp. Stockholders Litigation, the Delaware Court of Chancery denied defendants’ motions to dismiss and ruled that the plaintiffs’ may proceed with their claims that the insiders of a special purpose acquisition company (SPAC) breached their fiduciary duties by failing to disclose information material to the stockholder vote that was held…
2021 TBOC Changes: What Does This Mean for Texas Partnerships, Corporations, and LLCs?
The Texas Legislature, during its 87th Regular Session, passed several bills with direct implications for Texas partnerships, corporations, and limited liability companies. Below are some of the key changes for Texas entities, including amendments made to the Texas Business Organization Code (TBOC), passed in the 87th Regular Session.
S.B. 1203/H.B. 3364 – Business Organization Code…
Key 2021 Amendments to Delaware Business Entity Statutes
This article summarizes key amendments to the Delaware General Corporation Law (DGCL), Delaware Limited Liability Company Act (DLLCA), Delaware Revised Uniform Partnership Act (DRUPA) and Delaware Revised Uniform Limited Partnership Act (DRULPA, and, together with the LLC Act and GP Act, the Alternative Entity Acts) that became effective on August 1, 2021.
Voting Rights of…
Boeing’s Board Agrees to $237.5 Million Settlement in Litigation Alleging Failure to Oversee Airplane Safety
The board of directors (Board) of The Boeing Company (Boeing) agreed to a staggering $237.5 million settlement of a lawsuit brought by stockholders on behalf of Boeing alleging that the Board and certain executive officers breached their fiduciary duties of oversight and monitoring of mission-critical airplane safety and airworthiness of the 737 MAX prior to…
Left in the Cold: Terminating Merger Agreement that Eliminates Liability for Post-Termination Claims Means What It Says
The ruling of the Delaware Court of Chancery in Yatra Online v. Ebix highlights the need for M&A practitioners to exercise care when drafting termination and remedies provisions in merger agreements and other contracts and to fully understand the ramifications of terminating a merger agreement or other contract before taking the step of exercising a…
Could Corporate Convertible Loans be Subject to Criminal Usury Laws in New York?
In Adar Bays, LLC v. GeneSYS ID, Inc., the New York Court of Appeals (the “Court”) held that the conversion price in a convertible option could be classified as interest thereby potentially falling under the territory of New York’s criminal usury laws.
Background
In 2016, Adar Bays provided GeneSYS with a $35,000 loan in exchange…