Corporate Governance

Section 304 of SOX and Officer Certification: Digimarc and the Absence of a Private Right of Action

Posted on March 04, 2009

Jobs' Health and Disney's Proxy Statement

Posted on March 04, 2009

Say on Pay, the SEC and the Response to Senator Dodd

Posted on March 03, 2009

Discretionary Voting by Brokers and the SEC: Movement, Finally

Posted on March 03, 2009

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Corporate Governance and the SEC: The Impact of the Stimulus Bill (President Obama and the State of the Union) (Part 6)

Posted on March 02, 2009

Citi, the Board and the Myopic Vision of the Delaware Courts

Posted on March 02, 2009

AIG and the Bailout of the Government Bailout

Posted on March 02, 2009

Corporate Governance and the SEC: The Impact of the Stimulus Bill (State Law Preemption) (Part 5)

Posted on February 28, 2009

Corporate Governance and the SEC: The Impact of the Stimulus Bill (Part 3)

Posted on February 27, 2009

Corporate Governance and the SEC: The Impact of the Stimulus Bill (The Requirement of Independent Directors)(Part 4)

Posted on February 27, 2009

US v. Nacchio: A Modest Ruling by a Modest Majority

Posted on February 26, 2009
As we more or less predicted, the full court vacated the panel opinion which had overturned the verdict of Joe Nacchio and ordered a new trial.  The affect of the en banc opinionis to reinstate the conviction.  The majority opinion was written by Judge Holmes who also wrote the dissent in the panel opinion...

US v. Nacchio: Ineffective Assistance of Counsel?

Posted on February 26, 2009
Judge Henry wrote a separate dissent and suggested that the case would be back, with the courts having to resolve whether Nacchio received ineffective assistance of counsel.  As he noted: And, though I fear for today’s result, I do not believe this case is over...

US v. Nacchio: The Death Knell for Special Treatment of Economic Analysis in Securities Cases?

Posted on February 26, 2009
For a time, it seemed as if economic analysis (often bad economic analysis) was the sin qua non of legal analysis in the corporate law area.  There were plenty of scholars who wanted to see corporate and securities law become entirely a matter of contract...

US v. Nacchio: The Tenth Judge on the En Banc Panel

Posted on February 26, 2009
The case was decided by a 5-4 vote.  Nonetheless, there was a tenth judge involved in the decision making process, Judge Nottingham, the trial judge.  There is little doubt that his presence was felt by the dissenting judges in the en banc decision...

The Rocky to Close

Posted on February 26, 2009
The Nacchio case came down yesterday and I received a call from Sara Burnett at the Rocky Mountain News for my thoughts.  It didn't earn me a quote but it resulted in a thoughtful, interesting conversation with someone who had followed the trial from the very beginning...

Corporate Governance and the SEC: The Impact of the Stimulus Bill (Part 1)

Posted on February 25, 2009
When the Exchange Act was adopted back in 1934, Congress intended to give the SEC a prominant role in the corporate governance process.  Congress mostly limited that authority to disclosure.  As the legislative history illustrates (and is set out in much greater detail in Essay: Corporate Governance, the Securities and Exchange Commission, and the Limits of Disclosure) Congress mistakenly thought that governance problems (excessive compensation, management self perpetuation), would be corrected if shareholders received sufficient disclosure to remedy any abuse...

Corporate Governance and the SEC: The Impact of the Stimulus Bill (Part 2)

Posted on February 25, 2009
We are examining the changing role of the SEC in the corporate governance process. The Leviathan that is the Stimulus Bill included some corporate governance provisions on p. 402 in Part B, Title VII.  Section 111 of the Act contains most of the operative restrictions on executive compensation...

The Tenth Circuit Affirms: Comments by John Holcomb, Daniels College of Business

Posted on February 25, 2009
As an initial matter, we offer the following comments from John Holcomb at the Daniels College of Business.  John has commented considerably on this case and attended the trial.  As several predicted, the en banc panel has reversed the 3-judge panel and reinstated the Federal District Court ruling and verdict...

Tenth Circuit Affirms Conviction of Joe Nacchio

Posted on February 25, 2009
The 10th Circuit has affirmed the conviction of Joe Nacchio by a 5-4 vote.  We will have commentary on the case later.

Limiting the Duty of Loyalty: Pfeffer v. Redstone (Disclosing the Identity of the Special Committee)

Posted on February 24, 2009
We are discussing Pfeffer v. Redstone, a recent Delaware Supreme Court decision examining the law suit challenging Viacom's spin off of Blockbuster. The case involved a number of disclosures alleged to be false.  One of them in particular caught our attention...

In re: Salomon Analyst Metromedia Litigation and the Presumption of Reliance

Posted on February 24, 2009
In In Re: Salomon Analyst Metromedia Litigation, 544 F.3d 474 (2d Cir. 2008), defendants appealed a New York District Court holding that the Basic v. Levinson reliance presumption applied to misrepresentations made by research analysts. Additionally the court addressed whether the defendants were entitled to rebut the Basic presumption prior to class certification...

Limiting the Duty of Loyalty: Pfeffer v. Redstone (Introduction)

Posted on February 23, 2009
We will do a series of posts today on Pfeffer v. Redstone.  The case involves the spin off of Blockbuster by Viacom.  Viacom was largely owned by National Amusements, Inc. (NAI), which held 71% of the voting interests of Viacom.  Viacom, in turn, held most of the shares of Blockbuster...

Limiting the Duty of Loyalty: Pfeffer v. Redstone (Student Post)

Posted on February 23, 2009
Last year we covered the Court of Chancery’s decision in Pfeffer v. Redstone, No. 2317-VCL, 2008 WL 308450 (Del. Ch. 2008).  On January 23, the Delaware Supreme Court upheld the Court of Chancery’s dismissal of the plaintiff’s claims...

The Schapiro Shift Continues

Posted on February 23, 2009
The NYT has a piece on Mary Schapiro's first weeks in office, generally written in a laudatory tone.  In general, we agree.  She has made some good appointments, taken off some of the restrictions on Enforcement, and indicating strong support for access and say on pay (although we await specific initiatives)...

Limiting the Duty of Loyalty: Pfeffer v. Redstone (The Evisceration of the Duty of Loyalty)

Posted on February 23, 2009
We are discussing Pfeffer v. Redstone, a recent Delaware Supreme Court opinion involving the spin off of Blockbuster by Viacom. Delaware courts purport to apply a higher standard when it comes to transactions that implicate the duty of loyalty.  But in fact this would interfere with managerial discretion and potentially cause corporations to eschew Delaware as the jurisdiction of choice...

Changing of the Guard at the Division of Enforcement

Posted on February 21, 2009
As predicted, the new director of the Division of Enforcement is Robert Khuzami.  We have already commented on his appointment.

The SEC and Corporate Governance: The Schapiro Shift Is Underway

Posted on February 20, 2009
Mary Schapiro comes to the SEC aware that there is pent up demand for corporate governance reform.  Some, such as access, will likely need to be addressed through rulemaking.  Others can happen more quickly.  One place where changes can be seen quickly is with respect to no action letters under Rule 14a-8...

Commissioner Walter and Access

Posted on February 20, 2009
Elisse Walter (who, by the way, was the Associate General Counsel of Counseling at the SEC when I was in the General Counsel's Office) has given a talk on the SEC and corporate governance, specifically access.  Commissioner Walter not only indicated support for access but more or less suggested that the access proposal put out by the Commission (and not adopted) in 2007 was flawed, at least in part because of the high percentage threshold necessary to submit an access proposal...

Fiduciary Duties of Officers and Directors: Gantler v. Stephens (The Supreme Court Again Misreads Section144)(Part 8)

Posted on February 19, 2009
We are examining the recent decision by the Delaware Supreme Court in Gantler v. Stephens. One of the oddest confusions in Delaware law is the improper reliance on Section 144 to determine the standard of review for conflict of interest transactions involving directors...

Personal Use of the Corporate Aircraft, the Super Bowl, and the Need for Additional Disclosure Requirements

Posted on February 19, 2009
There has been a great deal written, including on this Blog, about the use of private aircraft by corporate CEOs.  Corporate aircraft is an expense, often a significant one, and, as a result, ought to be undertaken only if in the interests of the corporation...

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