SECURITIES DISMISSALS IN LIFE SCIENCES SECTOR
Following the recent Ninth Circuit decision in Khoja, plaintiffs alleging securities fraud against companies in the pharmaceutical and life sciences sector are increasingly opposing the introduction of extrinsic documents by defendants in motions to dismiss under the PSLRA. Life sciences companies should expect more vigorous opposition to attempts to introduce FDA or other contextual documents as part of their strategy to dismiss cases brought under the federal securities laws.
LIABILITY RISKS UNDER HELMS-BURTON ACT
The Trump administration announced that it would activate a dormant provision in the Helms-Burton Act that provides a private cause of action allowing U.S. nationals to sue persons and entities engaged in "trafficking" in property expropriated by the Cuban government. The activation of this law, which had been suspended by every administration since it was enacted in 1996, creates new liability risks for companies, individuals and governments with business ties to Cuba.
SEC GUIDANCE AND PROXY SEASON
Guidance and no-action decisions from the staff of the SEC's Division of Corporation Finance during the 2019 proxy season provide important guideposts, but the path forward on many shareholder proposals remains murky.
HKEX REFORMS, ONE YEAR IN
The reforms implemented by the Stock Exchange of Hong Kong Limited to encourage the listing of high-tech and biotech companies appear to be achieving their goal.
US M&A ACTIVITY
Coming into 2019, dealmakers were cautiously optimistic about U.S. M&A activity despite apprehension over mounting headwinds. Almost six months into the year, that viewpoint seems justified, with activity levels relatively strong on a historical basis. At the same time, a sense of uneasiness has continued to creep into the M&A market as a result of concerns over trade tensions, market volatility, regulatory uncertainty and other factors.
We examine two recent Bankruptcy Court decisions, one in New York regarding enforcement of prepayment premiums and another in Delaware about whether and when derivative claims on behalf of Delaware alternative entities may be asserted in bankruptcy.
ANONYMOUS ONLINE SPEECH
In today’s world — where social media has become a source of news for many — companies and individuals often find themselves the subject of negative and anonymous online comments. These comments can give rise to legal claims, but unmasking an anonymous critic and holding them responsible is no small challenge. Conversely, companies and individuals may choose to speak anonymously for a variety of reasons. Anonymous speech is protected by the First Amendment, but these protections are not boundless.
Director Independence and Oversight Obligation in Marchand v. Barnhill
On June 18, 2019, the Delaware Supreme Court issued a decision in Marchand v. Barnhill, et al. reversing the lower court's dismissal of a derivative suit alleging Caremark claims. The decision highlights the importance of ensuring that a company implements effective board-level monitoring and compliance procedures as well as documents those efforts in its board records.
Activists Take Another $290 Million Bite Out of Vulnerable Closed-End Fund Asset Class
On June 14, 2019, Saba entered into three standstill agreements with three registered closed-end funds and their investment adviser. The agreements arose from proxy contests that Saba initiated in an effort to coerce the funds into liquidating, converting into open-end funds or shrinking in size through at-or-near-net-asset-value “liquidity events.” In light of the increasingly aggressive tactics activist investors are using, the boards of closed-end funds should reevaluate shareholder rights plans, state law control share statutes and other corporate defense strategies.
The Impact of SEC Staff Guidance on Shareholder Proposals Leaves a Murky Path Forward
Guidance and no-action decisions from the staff of the SEC's Division of Corporation Finance provide important guideposts, but the path forward on many shareholder proposals remains murky.