Legal Business Emerging Issues

Preferred vs. Common -- Who Is Commonly Preferred In Mergers?

Mon, 27 Jun 2011 09:28:00 -0400

By Steven Bartz Esq., Rahul Patel Esq. and R. Samuel Snider Esq.

Introduction

When a conflict of interests exists between preferred stockholders and common stockholders, to whom does the board owe duties and what duties does it owe? Under Delaware law, the basic rights of common stockholders are set forth in the Delaware General Corporation Law, and Delaware case law clearly defines the contours of the duties that directors owe common stockholders. The rights of preferred stockholders, on the other hand, are a hybrid of contractual, equitable, and other legal rights. As stated in Appraisal of Metromedia Int'l Group, Inc., "[a] preferred shareholder's rights are defined in either the corporation's certificate of incorporation or in the certificate of designation, which acts as an amendment to a certificate of incorporation," but the rights of preferred stockholders are, for example, also "interwoven with a stockholder's

Matrixx Initiatives: Not A Pro-Business Decision

Mon, 27 Jun 2011 09:21:00 -0400

By Thomas O. Gorman Esq.

The complaint

The shareholder complaint claimed that the company made false statements about its key product Zicam, a cold remedy nasal spray. Zicam is the primary product of Matrixx Initiatives, accounting for about 70% of its sales at one point.

Respondents claimed that statements made by the company about the product were false because they failed to disclose certain adverse information. Specifically, there were test results and consumer information demonstrating that the product caused a loss of the sense of smell. Beginning as early as 1999 there were test results supporting this fact. In 2002 and 2003 the company received additional clinical reports which were followed by the commencement of product liability suits alleging that Zicam caused a loss of smell. The negative test results were few in number.

131 S.Ct. 1740, 179 L.Ed.2d 742, 2011 U.S. LEXIS 3367, a sharply divided U.S. Supreme Court ruled that the Federal

Supreme Court's Decision in Erica P. John Fund v. Halliburton

Mon, 20 Jun 2011 10:14:00 -0400

By James Wilson

Introduction: On June 6, 2011, the Supreme Court unanimously rejected the Fifth Circuit Court of Appeal's requirement that plaintiffs in securities class actions prove "loss causation" at the class certification stage of the case. In order for investors to proceed as a class action under Section 10(b) of the Securities Exchange Act of 1934, they must demonstrate that the elements of Section 10(b) may be proven on a class-wide basis and that the court will not be required to examine each investor's individualized claim. Loss causation - similar to "proximate causation" - is one of several elements that plaintiffs ultimately must prove to establish

Securitizations and the Dodd-Frank Act

Mon, 06 Jun 2011 10:03:00 -0400

By Howard M. Goldwasser Esq., Llyod H. Johnson Esq. and Drew A. Malakoff Esq.

Standards and Disclosure for Due Diligence for Registered Securitizations under Section 943 of the Dodd-Frank Act.

Excerpt:

On January 20, 2011, the Securities and Exchange Commission (the "SEC") published a final rule under the Securities Act of 1933 (the "Securities Act") to set requirements for due diligence procedures and disclosure in asset-backed securities offerings.[1] This rule is designed to implement Section 943 of the Dodd-Frank Act.

The new rule, Securities Act Rule 193 ("Rule 193"), requires issuers of publicly offered asset-backed securities ("ABS"

One Year Later: The Reach of U.S. Securities Laws After Morrison

Mon, 06 Jun 2011 09:29:00 -0400

By James Wilson

In the year since the Supreme Court issued its decision in Morrison regarding "foreign cubed" securities claims, where the Court held that federal securities statutes do not apply, lower federal courts have applied Morrison inconsistently. James M. Wilson Jr., partner at Chitwood Harley Harnes LLP, which pursues securities class actions, dicusses issues that have developed in different courts over the scope of Morrison.

Excerpt:

The Supreme Court issued its decision in

Rabiej on Why Lawyers Should Routineline Request 502d Confidentiality Order

john.rabiej@placeholder.com (John Rabiej) — Sat, 24 Apr 2010 14:00:00 -0400

A court order under FRE 502(d) protects a party from the threat of waiving the attorney-client privilege or work-product protection when privileged or protected information is disclosed. Few requests for the court order have been reported, because the bench and bar are unfamiliar with the new rule (enacted in Sept. 2008). Best practices call for lawyers to request the court to enter the order routinely in every discovery-intensive case.

The full text of this article can be accessed through the Related Products links below.

Eli Wald on Dropping "Hot Potatoes," Metropolitan Life Insurance Co. v. The Guardian Life Insurance Co. of America, 2009 U.S. Dist. LEXIS 42475 (2009)

eli.wald@placeholder.com (Eli Wald) — Fri, 23 Apr 2010 19:46:00 -0400

In Metropolitan Life v. The Guardian Life Ins. Co., the District Court for the Northern District of Illinois rejected a broad interpretation of the "hot potato doctrine" relating to motions to disqualify opposing counsel. This Emerging Issues Analysis, written by Prof. Eli Wald, a legal ethics expert, summarizes the pertinent legal issues decided by the court and provides important insights for practitioners.

The full text of this article can be accessed through the Related Products links below.

Lauer on Hotlines and the Role of Privileged Communications

steven.lauer@placeholder.com (Steven A. Lauer) — Thu, 22 Apr 2010 13:47:00 -0400

Read Steve Lauer's analysis on how the confidentiality that often attaches to reports received over a corporate whistleblowing hotline, on account of legal requirements or by virtue of a corporate policy or practice, does not equate with either the Attorney-Client Privilege or the Attorney Work Product Doctrine.

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Eli Wald on the Use of Credit Cards to Pay for Legal Services, Virginia State Bar Standing Comm. on Legal Ethics, Op. 1848, 2009 Va. Legal Ethics Ops. LEXIS 1 (April 14, 2009)

eli.wald@placeholder.com (Eli Wald) — Mon, 15 Feb 2010 15:03:00 -0400

Clients use of credit cards to pay for legal services has become commonplace. This opinion explores whether lawyers may pass along transactional fees charged by credit card companies to clients who are using credit cards to pay legal fees. This Emerging Issues Analysis, written by Professor Eli Wald, a legal ethics expert, summarizes the pertinent legal issues decided by the Committee and provides important insights for practitioners.

The full text of this article can be accessed through the Related Products links below.

Wechsler on the New York Rules of Professional Conduct

steven.wechsler@placeholder.com (Steven Wechsler) — Sun, 14 Feb 2010 20:29:00 -0400

This Emerging Issues Analysis by Prof. Stephen Wechsler summarizes the most significant changes wrought by the new Rules of Professional Conduct, effective April 1, 2009, and alerts New York practitioners to significant potential practice pitfalls and ethical dilemmas.

The full text of this article can be accessed through the Related Products links below.

Eli Wald on Assignability of Malpractice Lawsuits, Taylor v. Babin, 2009 La. App. LEXIS 724 (2009)

eli.wald@placeholder.com (Eli Wald) — Fri, 12 Feb 2010 14:58:00 -0400

In Taylor v. Babin, the Louisiana Court of Appeals held that assignability of malpractice lawsuits contradicted public policy considerations. This Emerging Issues Analysis, written by Professor Eli Wald, a legal ethics expert, summarizes the pertinent legal issues decided by the court and provides important insights for practitioners.

The full text of this article can be accessed through the Related Products links below.

Eli Wald on Assignability of Unpaid Legal Fees Lawsuits, Burnison v. Johnston, 277 Neb. 622 (Neb. 2009).

eli.wald@placeholder.com (Eli Wald) — Fri, 12 Feb 2010 14:05:00 -0400

In Burnison v. Johnston, the Supreme Court of Nebraska held that a law firm may assign its right to collect unpaid legal services. This Commentary, written by Professor Eli Wald, a legal ethics expert, summarizes the pertinent legal issues decided by the Court and provides important insights for practitioners.

The full text of this article can be accessed through the Related Products links below.

Vespole on Employee E-Mails through Personal Email Account Protected by Attorney-Client Privilege

donotusemark.vespole@placeholder.com (DoNotUseMarkVespole) — Fri, 29 Jan 2010 01:59:00 -0400

What should an attorney do if, in the course of forensic preservation of electronic discovery for a pending lawsuit, communications between a former employee and his attorney regarding the very same lawsuit are discovered? According to Stengart, regardless of the existence or specific text of a published electronic communications policy, such communications will almost always be protected by the attorney-client privilege.

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Wroth on the Vermont Rules of Professional Conduct

kinvin.worth@placeholder.com (Kinvin Wroth) — Fri, 29 Jan 2010 01:44:00 -0400

The "Ethics 2000" amendments to the ABA Model Rules of Professional Conduct are now in effect in Vermont. The Vermont Supreme Court has adopted a massive package of amendments to the Vermont Rules of Professional Conduct, effective September 1, 2009, that incorporate most of the amended Model Rules. In the works for six years, the Vermont amendments are intended to clarify provisions of the Vermont Rules and respond to developments in the practice of law and the law of lawyering produced by the impact of technology and the changing dynamic of the legal profession.

The full text of this article can be accessed under the Related Products links below.

Richmond on Defense Lawyer's Malpractice Liability

douglas.richmond@placeholder.com (Douglas Richmond) — Thu, 28 Jan 2010 14:05:00 -0400

In his analysis of Defense Lawyers' Malpractice Liability to Excess Insurers, Senior Vice President of Aon Risk Services, Douglas R. Richmond, Esq., discusses the rise in malpractice suits by excess insurers against defense counsel hired by liability insurers when verdicts exceed primary insurance policy limits.

The full text of this article can be accessed through the Related Products links below.

McMorrow on Attorney Conduct and the SEC

judith.mcmorrow@placeholder.com (Judith McMorrow) — Thu, 28 Jan 2010 13:52:00 -0400

This Emerging Issues Analysis explores professional responsibility issues that arise for attorneys practicing before the Securities and Exchange Commission. The Emerging Issues Analysis addresses the SEC Rules of Practice, the changes implemented from the Sarbanes-Oxley legislation, and the actions taken by the Commission in developing norms of professional conduct for attorneys.

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Laskin on Textron: Accrual Work Papers and Attorney Work Product Doctrine

sheldon.laskin@placeholder.com (Sheldon Laskin) — Thu, 28 Jan 2010 13:43:00 -0400

The United States Court of Appeals for the First Circuit, sitting en banc, has ruled that tax accrual work papers, prepared by a publicly-traded corporation to produce financial statements which are certified by an independent auditor pursuant to federal securities requirements, are not protected from production by the attorney work product doctrine when requested by an IRS administrative summons. United States of America v. Textron, Inc.

The full text of this article can be accessed through the Related Products links below.

Bowman on Lawyer-Client Sexual Relations

addisonbowman@placeholder.com (Addison Bowman) — Thu, 28 Jan 2010 10:25:00 -0400

In 2002 the American Bar Association added to its Model Rule of Professional Conduct 1.8 an express prohibition of sexual relations with clients. A growing number of states have followed suit. The Hawaii Rules of Professional Conduct, however, are silent on the matter. Does this mean that a Hawaii lawyer can commence such a relationship without risking disciplinary sanctions? Addison Bowman examines the issue and offers guidance to practitioners.

The full text of this article can be accessed through the Related Products links below.

Bowman on Representing the Entity Client: A matter governed by Hawaii Rules of Professional Conduct 1.13

addisonbowman@placeholder.com (Addison Bowman) — Thu, 28 Jan 2010 10:24:00 -0400

Hawaii Rule of Professional Conduct 1.13, Organization as client, guides lawyers whose rendition of professional legal services to organizational clients. In this commentary Addison M. Bowman addresses the identity of the client, the question of joint representation, the rule of client-lawyer privilege, and the obligation of confidentiality in the special circumstances presented when a lawyer represents an entity client.

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Eli Wald on Enforcement of Contracts Which Violate the Rules of Professional Conduct

eli.wald@placeholder.com (Eli Wald) — Wed, 27 Jan 2010 19:57:00 -0400

In Patterson v. Law Office of Lauri J. Goldstein PA, 980 So. 2d 1234 (Fla. Dist. Ct. App. 4th Dist., 2008, the Florida court of appeals explored whether a fee-sharing agreement between a lawyer and a paralegal which violated the Rules of Professional Conduct could be enforced against the attorney.

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Eli Wald on Judicial Disqualification under the Due Process Clause of the Fourteenth Amendment, Caperton v. A. T. Massey Coal Co., Inc., et al, 2009 U.S. LEXIS 4157, 129 S. Ct. 2252 (2009).

eli.wald@placeholder.com (Eli Wald) — Wed, 27 Jan 2010 19:50:00 -0400

In Caperton v. A. T. Massey Coal Co., Inc., the U.S. Supreme Court explored whether a justice who received extraordinary campaign contributions from the board chairman and principal officer of appellant corporation violated the Due Process Clause of the Fourteenth Amendment when he denied a recusal motion. This Emerging Issues Analysis, written by Professor Eli Wald, summarizes the pertinent legal issues decided by the Court.

The full text of this article can be accessed through the Related Products links below.

Eli Wald on Outside Counsels Aiding and Abetting Liability under the Federal Securities Statutes, In re Refco, Inc., Sec. Lit., 609 F. Supp.2d 304 (S.D.N.Y. 2009).

eli.wald@placeholder.com (Eli Wald) — Wed, 27 Jan 2010 15:30:00 -0400

In In re Refco, Inc., the District Court for the Southern District of New York held that secondary actors are not liable for aiding and abetting violations of the federal securities statutes. This Emerging Issues Analysis, written by Professor Eli Wald, a legal ethics expert, summarizes the pertinent legal issues decided by the court and provides important insights for practitioners.

The full text of this article can be accessed through the Related Products links below.