The rise of founder-led, venture capital-backed companies in recent years has coincided with a surge of companies implementing dual-class share structures in connection with their initial public offerings. A dual-class structure typically entitles the holders of one class of the company’s common stock (often designated as Class B common stock) to multiple votes per share and the class of common stock...

SPAC activity continued to slow in the first half of 2022, a sharp decline from the number of deals and IPOs in the same period in 2021. Redemption rates soared, and a record number of SPAC deals were terminated. Factors contributing to the slowdown include disappointing performance by newly de-SPACed companies, rising inflation, macroeconomic uncertainty and increased regulatory scrutiny from the...

A fundamental question in corporate law is the nature of the stockholders’ ownership interest in the firm. Should a share of stock be viewed as a simple chattel, the value of which can be measured for all purposes by its trading price? Or should it be viewed as a partial claim on the firm as a whole, the value of which—for some purposes—cannot be determined without reference to the value of the...

In Manti Holdings v. The Carlyle Group (June 3, 2022), the Delaware Court of Chancery held that entire fairness review would apply to the challenged sale of The Carlyle Group’s portfolio company, Authentix Acquisition Corp., due to the pressure Carlyle allegedly exerted to cause a quick sale so that it could close out its fund, Carlyle Holdings, that had invested in the company. The court...

The Goldstein v. Denner (May 26, 2022) litigation arose out of the $11.6 billion cash acquisition of Bioverative, Inc. (which had recently been spun off from Biogen, Inc.) by Sanofi, S.A. The Delaware Court of Chancery held, at the pleading stage of litigation, that certain directors and officers of Bioverative may have breached their fiduciary duties in connection with the sale process. The plaintiff...

Recent Delaware decisions have reminded boards of directors of the obligation to make a good faith effort to put in place a compliance system designed to help ensure that their companies operate within the bounds of the law and that their products, services, and operations do not cause harm to consumers, community members, or the environment. That duty—famously associated with the Delaware Court of...

Plaintiff Twitter, Inc. (“Twitter”), by and through its undersigned counsel, replies as follows to the Verified Counterclaims (the “Counterclaims”) of Elon R. Musk (“Musk”), X Holdings I, Inc., and X Holdings II, Inc. (each a “Defendant” and together, “Defendants” or the “Musk Parties”) as follows. Introduction Musk begins his answer to Twitter’s claims for breach of their...

Twenty-six public companies have gone private this year as of mid-May, totaling more than $121 billion in value. Compare that to 47 companies that did the same in all of 2021, the highest number of such deals in more than a decade, according to Dealogic. Dry powder is partially fueling these transactions as private equity firms compete to buy the best companies at the best prices, pushing them to...

The ascendance of SPACs in U.S. capital markets has attracted intense regulatory scrutiny from federal officials, especially the SEC. This federal attention on SPACs is natural, as at first glance the SPAC appears to be simply an alternative to the conventional IPO, itself regulated chiefly at the federal level. The SPAC, however, is critically different from the IPO. An IPO is a transaction: the...

The American Law Institute (ALI) is currently working on a Restatement of the Law of Corporate Governance (“Restatement”). As with all Restatements, the purpose of the proposed Restatement is to clarify “the underlying principles of the common law” that have “become obscured by the ever-growing mass of decisions in the many different jurisdictions, state and federal, within the United...

Dimensional’s recent paper The Economics of Corporate Governance provides a concise overview of the corporate governance literature. We focus on the governance of for-profit, publicly traded corporations and address two important questions. First, for whom should such corporations be run, shareholders or stakeholders? Second, what is the impact of governance provisions on shareholder value? We...

Introduction The SEC rule requiring a universal proxy card in director election proxy fights becomes effective today. The resurgence of activism is already in progress, and the universal proxy card may significantly facilitate some proxy contests in which an activist is seeking to elect one or more directors to a company’s board to replace incumbent(s). It will also affect proxy contest strategies,...

Carve-out deals, whether conducted through a trade sale, buyout, or IPO, have become a vital tool for businesses to boost balance sheets and deliver shareholder value. This trend has gathered momentum over recent years, with 9,155 carve-outs worth US$2.3 trillion in aggregate announced globally in 2021, according to Dealogic—up 67% in value compared to 2020. So far in 2022, carve-out activity has...

This post outlines the major trends occurring globally amongst activist investors’ portfolios. Using a proprietary model quantifying criteria such as reputation, number of campaigns/outcomes, tactics/focus, board seats won, and recency of engagements we have produced the Morrow Sodali Top 40 Activists (MS40) list narrowed down from the pool of global investors. The MS40 is compiled across two tiers...

As predicted in our previous M&A report, 2022 has not lived up to the runaway performance of 2021. As activity—still at impressive levels considering everything that has been thrown at the deal market—takes a breather, we consider five fundamental trends that may play out over the coming months. 1. Rates and financing costs to increase The increasing interest rate environment has, and will...

With Labor Day marking the unofficial end of summer, FTI Consulting’s Activism and M&A Solutions team welcomes readers to our eleventh edition of the quarterly Activism Vulnerability Report, which reports the results of our Activism Vulnerability Screener following 2Q22, plus other notable trends and themes in the world of shareholder activism. During 2Q22, the U.S. stock markets experienced...

Mary Ann Deignan is Managing Director; Rich Thomas is Managing Director and Head of European Shareholder Advisory; and Christopher Couvelier is Managing Director at Lazard. This post is based on a Lazard memorandum by Ms. Deignan, Mr. Thomas, Mr. Couvelier, Emel Kayihan, Antonin Deslandes, and Leah Friedman. Related research from the Program on Corporate Governance includes The Long-Term Effects...

After the coronavirus pandemic, the possibility of remote work became very popular, and eventually the opportunity to work from abroad. In such a situation, there was uncertainty in which country the personal income tax would be withheld. The current situation with “digital nomads” – employees who receive income in one country but live in another forced companies to turn to international...

By the Law of 26.03.2022 No. 67-FZ (subp. “b” p. 12, subp. “b” clause 13 of Article 2) introduced a temporary procedure for the recognition for profit taxation of exchange differences arising in the period from 01.01.2022 to 31.12.2024. Temporary order in 2022: • did not change the rules for including in non-operating expenses on the last calendar day of the month the amounts of...

Financial statements are also called financial statements. Its task: to provide reliable data on the financial position of the economic entity, what is the result of its activities in the field of finance, as well as on the cash flow in the period for which the report is submitted. All this is necessary in order to make the right decision in the field of economics. Fixed in Art. 13 of the Federal Law...

Due to the popularity of outsourcing accounting processes in Russia for several years, this service remains increasingly in demand in the field of small and medium-sized businesses. As you know, the accounting of a company can be assigned to a third-party organization, or a third-party individual. In this case, it is necessary to conclude a contract for the provision of accounting services with a...

Each legal entity by the Federal Law “On Accounting” engage to maintain accounting and tax records of its economic activities, regardless of the applicable tax system, as well as submit accounting and tax reports within the time limits established by tax legislation. The cost of accounting support depends on many factors, mainly on the number of transactions, suppliers and customers, and the...

The cost of accounting services of the company depends on various factors – the type of activity of the company – for example, production, trade, construction, etc., the taxation regime and other factors. The calculation of the cost of services begins with an assessment of the type of business activity of the company, since there are specific features of accounting for a trading company and a...

An audit of financial statements is understood as an independent audit of financial statements by an auditing organization or an individual auditor, the purpose of which is to express an opinion on its reliability in all material aspects for a certain period. Accounting is an orderly system for collecting, registering and summarizing information in monetary terms about the state of property,...

Assets in accounting are the property of the company, which it disposes to carry out it’s activities and make a profit. Asset accounting is the control of owned real estate, goods, stocks, raw materials, cash. Assets are divided into • current assets, non-current assets; • intangible assets, tangible assets; • low-liquid assets, highly liquid assets, and illiquid...

By the Law of 26.03.2022 No. 67-FZ (subp. “b” p. 12, subp. “b” clause 13 of Article 2) introduced a temporary procedure for the recognition for profit taxation of exchange differences arising in the period from 01.01.2022 to 31.12.2024. Temporary order in 2022: • did not change the rules for including in non-operating expenses on the last calendar day of the month the amounts of...

The investment goods supply index, after a decline in the spring of 2022 and even stabilization, made a sharp rise and at this stage is higher than the 2021 figure. Experts agree that such growth is unlikely to continue for a long time, there is a high probability of further correction of this indicator, which again is not something special. Most analysts claim that such a jump is “seasonal”,...