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Author Archives / Shane C. D'Souza

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More on “Golden Leash” Arrangements

Institutional investor organization urges SEC to require disclosure

Posted in Public M&A, Shareholders, Strategy

The debate about so-called “golden leash” arrangements has picked up again. The Council of Institutional Investors (“CII”), an influential association of institutional investors, recently wrote a letter to the U.S. Securities and Exchange Commission (“SEC”) expressing its concerns regarding the transparency of compensation paid in “golden leash” arrangements. As discussed in our previous post, “golden… → Read More

Augusta/HudBay – A model for target boards to say “not now”?

Posted in Public M&A, Shareholders, Strategy

The recent outcome of the Augusta/HudBay poison pill hearing provides some insight into how a shareholder rights plan may withstand scrutiny from a Canadian securities regulator for an extended period of time in the right circumstances. Though perhaps the result of somewhat unique facts, including insufficient initial support for the price being offered by the… → Read More

SETTING THE RECORD STRAIGHT: protecting against illegal proxy solicitation during a proxy contest

Posted in Uncategorized

During a proxy contest, strategic consideration should be given to strictly abiding by proxy solicitation rules and hawkishly assessing whether your opponent is doing the same. A recent decision provides guidance on factors that a court will consider in determining a seldom litigated issue – when is communication by the company during a proxy contest… → Read More

SHOTGUN! You should know this before triggering a buy-sell provision

Posted in Contractual Matters, Private Equity, Private Transactions, Shareholders, Strategy

There are important lessons in a recent Ontario Court of Appeal decision examining shotgun buy-sell provisions, and in particular, the enforceability of a buy-sell offer that does not perfectly comply with the terms and conditions of the shotgun provision. Unanimous shareholder agreements, partnership agreements, and joint venture agreements often contain what is commonly known as… → Read More

DEFENSIVE TACTICS DURING A PROXY CONTEST: lessons from the Oremex saga

Posted in Private Equity, Private Transactions, Shareholders, Strategy

There are important lessons in a recent Ontario Superior Court decision examining defensive tactics taken by a board in the context of a contested shareholders’ meeting. In Concept Capital Management Ltd. v. Oremex Silver Inc., 2013 ONSC 7820, the board of Oremex – during a contested election — postponed a shareholders’ meeting and issued shares… → Read More

By-laws counteracting “Golden Leash” arrangements: ISS speaks

Posted in Public M&A, Shareholders, Strategy

On January 13, 2014, Institutional Shareholder Services Inc. (“ISS”) issued FAQs explaining its views on by-laws designed to prohibit so-called “Golden Leash” arrangements. As discussed in our post last month, such arrangements arise when a shareholder activist privately offers to compensate its nominee directors in connection with such nominees’ service as a director of the… → Read More

“Golden Leashes”

The Controversy from this Proxy Season

Posted in Public M&A, Shareholders, Strategy

“Golden Leashes”, and by-laws designed to counteract such arrangements, have provoked significant controversy in the 2013 proxy season, and regulators, proxy advisors, and institutional shareholders have yet to take a definitive position in the debate. This post reviews what will certainly continue to be a hot button topic in 2014.

DON’T ASK, DON’T TELL?

Lessons from the SEC’s recent “ring fencing” settlement with Revlon

Posted in Private Equity, Private Transactions, Public M&A, Shareholders

The recent settlement in the United States between the Securities and Exchange Commission (SEC) and Revlon highlights the importance of not appearing to obstruct the flow of material information to shareholders. The SEC settled charges that Revlon misled shareholders during a going private transaction. The SEC’s order found that to avoid a potential disclosure obligation,… → Read More

Deal or No Deal?

The importance of knowing when you have an agreement

Posted in Contractual Matters, Private Equity, Private Transactions, Public M&A, Shareholders, Strategy

When negotiating a deal, it is critical for parties to be aware of when they have reached an agreement. Recently, in Proton Energy Group SA v. Public Company Orlen Lietuva, [2013] EWHC 334 (Comm), the English High Court found in a preliminary motion that it was “plausible” that an email with the word “confirmed” was… → Read More

What’s so “Special” about a “Special Committee”?

The importance of context when evaluating the need to establish a special committee

Posted in Private Equity, Private Transactions, Public M&A, Shareholders, Strategy

In a recent bench ruling in Re Plains Exploration, the Delaware Court held that a special committee was not required to take the lead in merger negotiations in circumstances where almost all of the members of the board were independent and free from conflict in connection with the transaction. In Re Plains Exploration, the Delaware… → Read More

You Can’t Always Get What You Want

Making realistic projections during an auction process

Posted in Private Equity, Private Transactions, Public M&A, Shareholders, Strategy

The recent Delaware ruling in In Ancestry.com Inc. Shareholder Litigation provides a cautionary tale relating to a target company developing aggressive projections during an auction process. The Relevant Facts Following the announcement of a going-private transaction, some shareholders of Ancestry.com filed suit in the Delaware Court of Chancery alleging, among other things, that the board… → Read More

Ignorance is not bliss: beware minimal due diligence

Lessons from the Quebec Court of Appeal

Posted in Contractual Matters, Private Equity, Private Transactions, Public M&A, Shareholders, Strategy

The Quebec Court of Appeal’s decision in Francoeur v. 4417186 Canada Inc., 2013 QCCA 191, provides a cautionary tale on the dangers of entering into a share purchase agreement and subsequently closing a share purchase transaction, without ample due diligence. The one-sided apportionment of risk The Francoeur share purchase agreement (the “SPA”), which was signed… → Read More

Don’t be a “Dummy Director”

Delaware ruling on the obligations of directors of companies operating in emerging markets

Posted in Public M&A, Shareholders, Strategy

        “Independent directors who step into these situations involving essentially the fiduciary oversight of assets in other parts of the world have a duty not to be dummy directors.” p. 21 of transcript, In re Puda Coal Stockholders Litigation, Del. Ch. C.A. 6476-CS (February 6, 2013). A recent Delaware bench ruling considers… → Read More