Management
I recently read a New York Times article that discussed investor reactions to a successful chief executive deciding to exit a company. The article discussed how Manchester United’s coach, Alex Ferguson, announced Wednesday that he will retire at the end of the season. As a result, Manchester United’s shares fell nearly five percent Wednesday morning. Today’s post explores the impact of Ferguson’s exit, as well as the general impact of exiting executives.
A Brief Background
Manchester United, the English soccer club, raised $232 million in its IPO last… Read the rest
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
In the introduction to due diligence, we explained the importance of engaging in extensive due diligence prior to purchasing a business, and we broke down due diligence into six categories. Today’s post will highlight the key legal issues the purchaser should be aware of when purchasing a business.
Reviewing the Owner’s Governing Documents
Prior to any acquisition, the purchaser will need to know the basic organizational structure of the business, i.e. how it was formed, its governing documents, and its key personnel. Knowing how the business is organized will dictate how the transaction… Read the rest
The City of Seattle and the yellow pages publishers have reached a tentative agreement in which Seattle will pay the publishers $500,000. The settlement comes as part of a claim that the City of Seattle violated the publishers’ free speech rights. The city lost the case in the U.S. Supreme Court in October, and has chosen not to pursue an appeal. The 9th Circuit Court of Appeals ruled that a city ordinance violated the publishers’ free speech rights.
The city ordinance created an opt-out registry for unwanted phone books and… Read the rest
Recent cases have triggered a growing discussion about the whistleblower protections under the Dodd-Frank Act. Most believe that the regulations under Dodd-Frank are here to stay (at least another four years) now that President Obama has been reelected. With new regulations comes new judicial interpretations of the regulations. These judicial interpretations often broaden or narrow the scope of the regulation and can have profound impacts depending on the nature of the interpretation. In today’s post, we’ve highlighted the general characteristics of the two major whistleblower protections under Dodd-Frank and how recent cases have expanded… 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.
Greenlight Capital Inc.’s David Einhorn is protesting the amendment. Read the rest
Anheuser-Busch InBev NV’s $20.1 billion proposed takeover of Mexican beer distributor Grupo Modelo SAB has come to a halt after the Justice Department has filed suit to block the merger. This suit comes as part of a flurry of civil antitrust cases, signalling what many some believe to be the Obama administration’s increased willingness to intervene in the markets.
Currently there are seven antitrust cases in litigation, the most ever at one time. A spokeswoman for the Justice Department stated, “if the parties are not willing to offer a remedy or enter into a settlement that resolves our competitive concerns,… Read the rest
President Obama spoke in Nevada today about the need for widespread immigration reform. Many of the proposals President Obama mentioned, which are weaving their way through Congress, would increase the number of highly skilled immigrant workers allowed in the U.S. By “highly skilled,” we are referring mainly to highly skilled workers in the technology sector. Currently, 65,000 highly skilled workers are allowed to enter the U.S. to work each year under the H1-B visa—the H1-B visa is a specific visa to allow companies to temporarily employ foreign workers in a specialty occupation. It is thought that this may increase to as many… Read the rest
Yesterday, President Obama named Mary Jo White, the first female United States attorney in Manhattan, to the head the Securities and Exchange Commission (SEC). Many believe that the appointment of White, a former prosecutor and the first prosecutor to head the SEC, signals a renewed resolve to hold Wall Street accountable for any wrongdoing. White is well-known for her aggressive prosecution tactics.
White spent more than a decade as a federal prosecutor in New York City, where she pursued white-collar crime and Wall Street fraud. One of her… Read the rest
