Corporate Governance

Beneficial Ownership, Equity Swaps, and Proxy Contests: CSX v. The Children's Investment Fund (International Views) (Part 11)

Posted on June 18, 2008
We are addressing the ongoing litigation between CSX, the railroad company, and a number of hedge funds, including The Children's Investment Fund and 3G Capital Partners. The case revolves around the obligation of the Funds to disclose certain equity swaps involving shares of CSX...

Beneficial Ownership, Equity Swaps, and Proxy Contests: CSX v. The Children's Investment Fund (Part 10)

Posted on June 17, 2008
We are addressing the ongoing litigation between CSX, the railroad company, and a number of hedge funds, including The Children's Investment Fund (TCI) and 3G Capital Partners. The case revolves around the obligation of the Funds to disclose certain equity swaps involving shares of CSX...

Beneficial Ownership, Equity Swaps, and Proxy Contests: CSX v. The Children's Investment Fund (The Next Steps) (Part 9)

Posted on June 17, 2008
We are addressing the ongoing litigation between CSX, the railroad company, and a number of hedge funds, including The Children's Investment Fund and 3G Capital Partners. The case revolves around the obligation of the Funds to disclose certain equity swaps involving shares of CSX...

Beneficial Ownership, Equity Swaps, and Proxy Contests: CSX v. The Children's Investment Fund (Part 8)

Posted on June 16, 2008
A second amicus brief was filed by the Coalition of the Private Investment Companies (CPIC).  CPIC argued that "cash-settled equity swaps, standing alone, have been uniformly understood by regulators, investors and corporate legal advisors alike not to constitute 'beneficial ownership' of a security...

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Beneficial Ownership, Equity Swaps, and Proxy Contests: CSX v. The Children's Investment Fund (Part 7)

Posted on June 16, 2008
We are addressing the ongoing litigation between CSX, the railroad company, and a number of hedge funds, including The Children's Investment Fund and 3G Capital Partners. The case revolves around the obligation of the Funds to disclose certain equity swaps involving shares of CSX...

Beneficial Ownership, Equity Swaps, and Proxy Contests: CSX v. The Children's Investment Fund (Part 6)

Posted on June 15, 2008
We are discussing the letter submitted to the judge in CSX v. The Children's Investment Fund from the Division of Corporation Finance at the SEC.  The second question went to the necessary "mental state" needed to establish a scheme to evade under Rule 13d-3(b)...

Beneficial Ownership, Equity Swaps, and Proxy Contests: CSX v. The Children's Investment Fund (Part 5)

Posted on June 14, 2008
In response to an invitation from the trial judge, a segment of the SEC staff filed a letter with the court setting out positions on the beneficial ownership issue.  We turn to the legal analysis in the letter submitted by the Deputy Director of the Division of Corporation Finance...

Beneficial Ownership, Equity Swaps, and Proxy Contests: CSX v. The Children's Investment Fund (Part 4)

Posted on June 13, 2008
We are addressing the ongoing litigation between CSX, the railroad company, and a number of hedge funds, including The Children's Investment Fund and 3G Capital Partners. The case revolves around the obligation of the Funds to disclose certain equity swaps involving shares of CSX...

Beneficial Ownership, Equity Swaps, and Proxy Contests: CSX v. The Children's Investment Fund (Part 3)

Posted on June 13, 2008
We are addressing the ongoing litigation between CSX, the railroad company, and a number of hedge funds, including The Children's Investment Fund and 3G Capital Partners. The case revolves around the obligation of the Funds to disclose certain equity swaps involving shares of CSX...

Beneficial Ownership, Equity Swaps, and Proxy Contests: CSX v. The Children's Investment Fund (The Implications)

Posted on June 12, 2008
The trial judge issued an opinion in CSX v. The Children's Investment Fund today.  The lengthy opinion can be found on the DU Corporate Governance web site.The case concluded that the defendant hedge funds had engaged in a plan or scheme to avoid the disclosure obligations under Section 13(d)...

Beneficial Ownership, Equity Swaps, and Proxy Contests: CSX v. The Children's Investment Fund (Part 3A)

Posted on June 12, 2008
We are writing a series of posts on CSX v. The Children's Investment Fund (TCI), a case that explores the obligation to disclose shares acquired by a counterparty in an equity swap.  While we will continue with the posts (they include comments on the position taken by the staff of the Division of Corporation Finance in the case), we note that the trial judge issue an opinion today (115 pages, not including various charts and graphs attached as an appendix)...

Beneficial Ownership, Equity Swaps, and Proxy Contests: CSX v. The Children's Investment Fund (Part 2)

Posted on June 12, 2008
How did this legal battle come about?TCI began entering into equity swaps that referenced shares of CSX in October 2006, eventually providing "significant economic exposure to CSX"  Defendant's Post Trial Brief at 18.  This "economic exposure" was conveyed to CSX but management declined to "meet with TCI to discuss CSX's business, ostensibly because TCI was not a shareholder...

Beneficial Ownership, Equity Swaps, and Proxy Contests: CSX v. The Children's Investment Fund (Part 1)

Posted on June 12, 2008
We are addressing the ongoing litigation between CSX, the railroad company, and a number of hedge funds, including The Children's Investment Fund and 3G Capital Partners. The case revolves around the obligation of the Funds to disclose certain equity swaps involving shares of CSX...

Beneficial Ownership, Equity Swaps and Proxy Contests: CSX v. The Children's Investment Fund (Introduction)

Posted on June 11, 2008
We will begin a series of posts today (and running over the next several days) on the issues arising out of CSX v. The Children's Investment Fund, currently pending in the Southern District of New York.  The case arises in the context of a proxy contest launched by some hedge funds, with the funds seeking to elect five out of 12 directors to the CSX board...

Keeping the CEO Safe

Posted on June 11, 2008
The WSJ recently wrote about the amounts paid by public companies to provide their CEOs with sufficient security.  Sometimes the expenses go to the installation of a security system in the CEO's private home, sometimes to pay security guards...

Until Death Do Us Part: Executive Compensation and Golden Coffins

Posted on June 10, 2008
The WSJ has yet another article on executive compensation.  This time it includes data on golden coffins, amounts paid out after the CEO dies.  The amounts are often extraordinary.  They involve a mix of cash payments, insurance proceeds, and accelerated awards...

Shareholder Access Redux (Part 7)

Posted on June 10, 2008
We are revisiting the Commission's decision to amend Rule 14a-8 to permit the exclusion of shareholder proposals that would sometimes require management to include shareholder nominees in the company's proxy statement. All of this is explored in greater detail in my paper, The SEC, Corporate Governance, and Shareholder Access to the Board Room...

Executive Perks and the Impact of Disclosure

Posted on June 09, 2008
The WSJ today had a story on the executive perks that have come to light under the new SEC disclosure requirements for executive compensation.  The article was buried on page B-9 and for good reason.  There was hardly any content to the piece...

Shareholder Access Redux (part 6)

Posted on June 09, 2008
We are revisiting the Commission's decision to amend Rule 14a-8 to permit the exclusion of shareholder proposals that would sometimes require management to include shareholder nominees in the company's proxy statement. All of this is explored in greater detail in my paper, The SEC, Corporate Governance, and Shareholder Access to the Board Room...

Starbucks, Social Responsibility and Free Internet

Posted on June 07, 2008
We have often written on this Blog about Starbucks and the need for greater emphasis on social responsibility in order to retain customers, particularly as competition from McDonalds (which is planning to install baristas in 20,000 franchises) heats up...

The New URL for the DU Corporate Governance Web Site

Posted on June 06, 2008
In posting on various topics, we frequently link to hard copies of primary materials stored on a separate web site, the DU Corporate Governance Web Site.  The URL for the site has changed.  It is now http://www.law.du.edu/index.php/corporate-governance

Shareholder Access Redux (Part 5)

Posted on June 06, 2008
We are examining the decision by the Commission to deny shareholders access to the company's proxy statement for their nominees. As part of the process, we are examining the history of access. Much of what is written can be examined in greater detail in my paper, The SEC, Corporate Governance, and Shareholder Access to the Board Room...

George Curtis Goes to Washington

Posted on June 05, 2008
In a development generating quite a buzz here in Denver, George Curtis, head of the Denver Regional Office of the Securities and Exchange Commission, has been appointed to replace Walter Ricciardi as the Deputy Director of the Division of Enforcement...

Shareholder Access Redux (Part 4)

Posted on June 05, 2008
We are examining the decision by the Commission to deny shareholders access to the company's proxy statement for their nominees. As part of the process, we are examining the history of access. Much of what is written can be examined in greater detail in my paper, The SEC, Corporate Governance, and Shareholder Access to the Board Room...

Shareholder Access Redux (Part 3)

Posted on June 04, 2008
We are examining shareholder access to the proxy statement, with a brief exegesis into the history of the shareholder proposal. Much of what is written can be examined in greater detail in my paper, The SEC, Corporate Governance, and Shareholder Access to the Board Room...

Stockman and the Limits of D&O Insurance

Posted on June 03, 2008
We note that Kevin LaCroix at the D&O Diary, a one stop shop for all things about D&O insurance, has commented on the post on this Blog that discussed the burn rate of the D&O policy used to pay legal expenses in the current litigation against officers and other personnel from the bankrupt Collins & Aikman...

Shareholder Access Redux (Part 2)

Posted on June 03, 2008
We are examining shareholder access, reminiscing over the Commission's decision to deny shareholders access to the company's proxy statement. Today we will look at some of the history of the approach. Greater detail on the topic can be found in my paper, The SEC, Corporate Governance, and Shareholder Access to the Board Room...

US v. Stockman and the Burn Rate on the D&O Policy

Posted on June 02, 2008
We have been following the criminal action filed against David Stockman, the former director of OMB under Ronald Reagan. Most of the parties are mired in discovery, with the Government having produced somewhere around 10 million documents. With one exception...

Shareholder Access Redux (Part 1)

Posted on June 02, 2008
We will spend a week or so revisiting the issue of shareholder access.  It is a topic that only grows in importance.  We have seen from the Director Compensation Project run by students at the University of Denver Sturm College of Law that "independent" directors on public companies make healthy amounts, with at least one company paying directors in the vicinity of $700,000 a year...

Ruth Johnson and the Loss of a Remarkable Woman

Posted on May 31, 2008
In a career full of interesting events, the best year of all was 1981-82 when I had the opportunity to clerk for the Honorable Frank M. Johnson, Jr., at the US Court of Appeals for the 11th Circuit.  He was, during much of the civil rights era, the only federal district court judge in the Middle District of Alabama and the chosen jurist for civil rights cases...

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