In today’s post we continue exploring the depths of the due diligence phase of purchasing a business. We’ve already discussed the financial issues and the legal issues, and today we’ll look at the operational issues surrounding due diligence. We’ve highlighted four important questions to answer regarding operational issues of a business you’re looking to purchase.
What products or services does the company offer?
It may seem like a no-brainer to most, but it is important to acquire an in-depth knowledge of… Read the rest
Last week we wrote about Greenlight Capital’s lawsuit against Apple Inc. The hedge fund manager David Einhorn filed the lawsuit to contest Apple’s proposition to eliminate the board’s ability to issue preferred shares without shareholder approval. Today, Apple CEO Tim Cook called the lawsuit a “silly slideshow” while speaking at a Goldman Sachs investor conference.
Cook noted that the disagreement between Einhorn and Apple stems from a proposal on Apple’s proxy statement which it filed with the SEC in December. The crux of the dispute centers around how to issue preferred stock and who is able to approve new shares.… Read the rest
According to a proxy statement issued by Apple Inc., the computer (and mobile device) giant has announced that it does not intend to issue preferred stock in the future and believes it is appropriate to eliminate an existing provision permitting the issuance of preferred stock at its discretion. The proposed amendment to the company’s governing documents would require Apple to seek shareholder approval prior to issuing any preferred stock in the future.
Two recent Delaware cases confirm that the Court of Chancery will not substitute its judgment for that of a disinterested and informed board on executive compensation decisions, including severance, so long as there is a rational basis for the board’s decision. Reaffirming its reliance on the business judgment rule, the court decided in favor of the board’s decision in two recent derivative actions challenging severance/retirement packages for departing employees.
SEC Issues Proposed Rules to Implement Title II of the JOBS Act
Last Wednesday the SEC submitted for comment proposed rules to implement Title II of the JOBS Act, which would remove the prohibition on general solicitation for certain private placement offerings.
- The current 506 exemption will remain in place, and 506(c) will provide for the new rule, which lifts the ban on general solicitation.
- The SEC is proposing a flexible “facts and circumstances” test to
SEC Pushes Back Proposed JOBS Act Rules, Again
Last week we wrote about how the SEC was opting to issue proposed rules for Title II of the JOBS Act at its August 22nd meeting, rather than implementing interim rules, as had been anticipated. But on August 21st, just a day before the proposed rules were set to be unveiled, the SEC issued a notice that the rules would not be proposed until August 29th. We’ll update update… Read the rest
VC Firms Changing Promotional Tactics
Nicole Perlroth wrote an interesting article in the New York Times this week on the changing approach VC firms are taking to public relations.
“A number of V.C. firms ranging from some of the oldest, like Bessenmer Venture Partners to some of the youngest, like Peter Thiel’s Founders Fund, are now seeking full-time marketing experts. Even Sequoia, which sniffed at the notion when the trend began, has hired P.R. staff.”
Ms. Periroth suggests that the paradigm shift is the result of a… Read the rest
Hershey’s Granted Trademark for Bar Configuration
The US Patent and Trademark Office’s (USPTO) Trademark Trial and Appeal Board granted Hershey’s trademark application for the design and shape of its chocolate bar. The Examining Attorney for the USPTO had refused registration on two grounds: (1) Hershey’s proposed mark was a functional configuration of the goods; and (2) it was a non distinctive configuration that had not acquired distinctiveness as required under Trademark Act Section 2(f), 15 U.S.C. § 1052(f). The Trademark Trial and Appeal Board overruled the… Read the rest
Securities Regulation & Corporate Finance
JOBS Act Deadline Comes & Goes without SEC Action
Congress imposed upon the SEC a July 4th deadline to implement rules under Title II of the JOBS Act that would enable companies to engage in general solicitation under Rule 506 of Regulation D. But on June 29th SEC Chair(wo)man Mary Schapiro testified before Congress that the SEC would not be able to enact rules within the 90 period proscribed by… Read the rest
News Corporation Splitting Into Two Companies
Rupert Murdoch has confirmed that News Corporation, a $54 billion media company, will be splitting into two different entities. The existing company will retain the news-related assets of the company, while the new company will focus on the entertainment-related assets of the company including FX and Fox News (yes, it seems that News Corporation execs categorize Fox News as primarily entertainment, and not news). The split will be completed in the next year. News Corporation shareholders are expected to receive one share of the… Read the rest