Insights – June 2023

Skadden Insights – June 2023

This edition of Skadden’s quarterly Insights looks at the latest trends in shareholder activism, the scrutiny companies are facing over their ESG disclosures and employment considerations for using AI in the workplace, among other important trends and developments.

Changes in the Market and the Emergence of New Players Together Are Impacting Activism
New players, new SEC rules, a shift of focus toward capital allocation issues and activists’ increasing willingness to work with companies privately are the latest features of an evolving activist environment.

AI and the Workplace: Employment Considerations
As use of AI in the workplace grows, employers should be alert to the possibility that the technology could run afoul of anti-discrimination laws or reveal confidential or proprietary information.

Shareholder Proposal No-Action Requests in the 2023 Proxy Season: Companies Continue To Face a Challenging Environment
The SEC’s approach to no-action requests seeking to omit shareholder proposals remains unclear, but companies can still exclude some proposals that relate to ordinary business matters, constitute micromanagement or have procedural defects.

How and Why Private Capital Continues To Invest in the Insurance Sector
The desire to boost assets under management and a record of successful roll-ups have spurred financial sponsors to increase their investments in insurance businesses, including primary carriers, reinsurance companies and brokerages.

Early Stage Capital Raising Trends in Chapter 11 Reorganizations
Rights offerings may facilitate restructurings, but two recent cases highlight the need to proffer evidence of their fairness or, if part of a DIP loan, show that they do not improperly lock in terms of an eventual plan without a full confirmation process.

Companies Face Increasing Scrutiny Over Their ESG Disclosures — Including by ESG Critics
Shareholders and regulators increasingly allege that companies have not lived up to their own environmental and diversity policies. Now companies also must contend with state officials seeking to put the brakes on corporate ESG initiatives.

EU and UK Move Forward With Comprehensive Regulatory Regimes for Cryptoassets
The EU has enacted a regulatory framework that will harmonize rules for cryptoassets across member states. The U.K. is also moving forward with a comprehensive regime, but it has yet to publish draft legislation.