On March 11, 2019, the Securities and Exchange Commission (“SEC”) filed a complaint containing a multitude of charges related to an alleged illegal stock distribution and market manipulation scheme against David Foley and others. See complaint. The complaint identifies four groups of defendants: David R. Foley, Lisa L. Foley, and Jeffrey A. Foley (collectively, the “Stock Issuers”); Nanotech Entertainment, Inc. (“NTEK”) and Nanotech Gaming, Inc. (“NTGL”), affiliates of the Stock Issuers; Bernnie L. Blankenship (the “Stock Promoter”); and River North Equity LLC, Edward M. Liceaga, and Michael A. Chavez, the unregistered broker-dealers.
Read MoreOn March 25, 2019 car rental giant Hertz Corporation filed a complaint against its former CEO (Mark Frissora), CFO (Elyse Douglas), and General Counsel (John Zimmerman) pursuant to its Compensation Recovery Policy (“Hertz Clawback Provisions”).Hertz Corp. v. Frissora, No. 2:19-cv-08927 (D.N.J. Mar. 25, 2019). In the complaint, Hertz invoked its Hertz Clawback Provisions against its three former executives to recover incentive compensation that was paid to the executives between 2011 and 2013. Id. at 1. Specifically, the Hertz Clawback Provisions, which were denoted in all three of the prior executives’ employment contracts, required its former executives to forfeit any previously awarded incentive compensation if their “gross negligence and misconduct” resulted in a restatement in the company’s financial statements.
Read MoreThe Delaware Chancery court, per Vice Chancellor Glasscock, issued an opinion in Vintage Rodeo Parent, LLC v. Rent-A-Center, Inc., 2019 WL 1223026 (Del. Ch. Mar. 14, 2019), which discussed the implications of Vintage’s inadvertent failure to meet a merger extension deadline. At stake was a $126.5 million breakup fee. The court held that the target, Rent-A-Center, had no duty to warn Vintage of the impending deadline. While the decision, which focuses on a strict reading of contractual duties is understandable, it fits uneasily with a prominent previous decision; it also seems to be missing a full analysis of the duty of good faith.
Read MoreThe Responsible Sourcing Network’s 2018 report on commercial efforts to disclose reliable data when purchasing conflict minerals illustrated a concerning trend.(Andrea Vittorio, Bloomberg). The current trend indicates that many companies who deal in conflict minerals are receiving lower grades for their efforts and abilities to provide transparency on the origins of those minerals. Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 directs the Securities and Exchange Commission (“SEC”) to enforce reporting requirements for companies that manufacture products with conflict minerals. Conflict minerals are those that originate from mines controlled by armed groups in areas like the Democratic Republic of Congo and its neighboring countries.
Read MoreOn March 12, 2019, executives of T-Mobile US Inc. (“T-Mobile”) and Sprint Corporation (“Sprint”) testified in the third round of Congressional Hearings concerning the merger of the two companies. T-Mobile’s purchase of Sprint for $26 billion was announced almost a year ago on April 29, 2018 and continues to endure questioning from regulators. (Victoria Graham, Bloomberg). The Federal Communications Commission (“FCC”) and the Democratic-controlled House Subcommittee on Antitrust are reviewing the merger under the Communications Act of 1934 to ensure it promotes “the public interest, convenience, and necessity.” (47 U.S.C. §310(d); Chairman Frank Pallone, Jr., Committee on Energy and Commerce). While the U.S. Department of Justice’s (“DOJ”) antitrust division does not consider U.S. industrial policy in merger reviews like the House Subcommittee, it is looking at whether the deal harms competition. (Todd Shields et al., Bloomberg).
Read MoreDeutsche Bank’s merger with Commerzbank could make Deutsche Bank the fourth largest bank in Europe with the potential to make Germany instrumental in the international market. With Deutsche Bank (“Deutsche”) getting support from key German government officials to proceed with negotiations to merge with Commerzbank, it seems likely a merger between the two will succeed. Although a merger between the banks is probable, the banks face a great amount of opposition, and logistical issues, which may hinder the merger and any future success Deutsche could enjoy. The acquisition serves as a strategy to improve Deutsche’s competitiveness by giving Deutsche the necessary size and resources to compete in the global market.
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