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Two recent Delaware cases affirm difficulty in challenging board of directors' decisions regarding executive compensation decisions.

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.

Zucker v. Andreessen
In Zucker, the court granted defendant Hewlett-Packard’s motion to dismiss on claims that HP’s directors committed corporate waste by approving a $40mm severance package for its former CEO, Mark Hurd. In ruling, the court found that there was some rational basis for the board of directors to decide that the…

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For the ninth consecutive year the Delaware Courts have been listed as the top courts in the U.S.

For the ninth consecutive year the Delaware Courts have been listed as the top courts in the U.S. The survey, sponsored by the U.S. Chamber Institute for Legal Reform, takes into account a number of factors, including judges’ impartiality, timeliness of decisions, and judges’ competence. On the other end of the spectrum is Chicago, deemed the worst court system in the U.S. by the survey. Washington state was the 22nd ranked state.

What makes Delaware Courts so special?
One of the major reasons that Delaware Courts are held on such a high pedestal is that they have a specialized court system known as the Court of Chancery that handles all corporate matters in Delaware—which comprise the vast majority of litigation in Delaware….

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LawMeets is expanding to offer a series of free online courses with lectures and simulations that explore the intricate elements of transactional law.

Back in 2009, Drexel University Earle Mack School of Law professor Karl Okam0to developed a transactional law competition where law students competed to negotiate the best deals for their fictional clients. Due to its popularity, Okam0to expanded the competition in 2011 by launching LawMeets, a free website that provides transactional simulations to law students. The students submit videos in which they offer legal advice to solve the business scenario. The videos are peer-rated and the best videos receive expert analysis.

Recently, LawMeets received a $500,000 grant from the National Science Foundation to further develop its offerings. In October, LawMeets will expand its offerings with a series of free online courses that combine lectures and simulations that explore the more intricate elements of…

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Mergers and Acquisitions

Yahoo and Alibaba Close Deal
Yahoo has agreed to sell back half of its interest in the Chinese Internet company Alibaba. In 2005 Yahoo acquired a 40% interest in the company, but since then relations between the two companies have become strained, especially as Yahoo failed to meet investors’ expectations. As part of an agreement reached earlier this year, Yahoo will sell another 10% of its Alibaba holdings back to the company when the company files an IPO, and the rest of its Alibaba holdings after the IPO. Yahoo’s remaining interest in Alibaba is valued at just over $8 billion, which accounts for more than 40% of Yahoo’s market value.

IPOs

Fall IPO Calendar Filling Up
Take a look at iposcoop.com’s IPO…

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Force majeure is "an event or effect that cannot be reasonably anticipated or controlled," and is used to excuse non-performance of a contract.

In today’s post, we continue our series on understanding contract terms. In this fourth post, we focus on the term force majeure.

Webster’s Dictionary defines force majeure as “an event or effect that cannot be reasonably anticipated or controlled”—for example, such as hurricane, flooding, earthquake, war, riots, etc. The term is French, and is translated to mean “superior force.”

This term is included in contracts as a way to relieve each parties’ liability or obligation when an extraordinary event occurs or circumstances arise that are beyond the control of the parties and prevent one or both of the parties from satisfying their obligations under the contract. It is most commonly used in insurance, construction, and supply contracts.

Typically, the force majeure clause does…

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Headlines include Apple's iPhone 5; Venture Capital-backing for Quirky; EADS and BAE Systems possible merger; and Microsoft fighting cybercrime.

National News

Apple Unveils iPhone 5
Apple Chief Executive Tim Cook stated that the updates to the new iPhone are “the biggest things to happen to iPhone since iPhone,” referring to iPhone’s launch in 2007. The most notable updates include a slimmer, lighter device, a faster processor and compatibility with wireless carriers’ fastest 4G LTE networks.

Some observers noted that the new device relies heavily on Apple’s current suite of services and software, noting the lack of “never-before-seen” features.

In the wake of its significant win in its patent battle with Samsung, Apple looks to compete with Samsung’s latest devices. Some analysts expect Apple’s array of new products that are to be released this fall to have a significant impact on the U.S. economy as…

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In today's post, the third in our understanding contract terms series, we explore the definition of severability, and how it may affect your business.

In just about every contract you’ll come across, you’ll see the term severability somewhere in the last few paragraphs of the contract. It’s one of those ‘boiler plate’ clauses that most people glance right over when they’re reviewing a contract. However, the effects of this clause are worth reviewing and understanding. In today’s post, the third in our series on understanding contract terms, we explore the definition of severability, and how it may affect your business.

Webster’s Dictionary defines severability as “capable of being divided into legally independent rights or obligations.” Finally, we have a Webster’s definition we can work with. At the root of the definition is the idea of dividing something into parts.

In contract terms, this clause refers to…

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This series explores common terms you see in contracts and breaks them down so you can understand exactly what the term means, and its affect on you.

Last week we started a new contracts series where we explore common terms you see in various contracts and break them down so you can understand exactly what the term means, and its role in your contract. Today’s post will look into the definition of indemnification.

Webster’s Dictionary defines indemnification as “the action of indemnifying” or “the condition of being indemnified,” which is far from helpful. To indemnify is to “secure against hurt, loss, or damage.” Now we’re getting somewhere.

In simple terms, a typical indemnification clause allows you to seek reimbursement for money that you are forced to pay to a third party as a result of injuries or property loss caused by another person’s actions. For example, let’s say that…

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Securities Regulation

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 highlights from the proposed rules:

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 determine whether offerors took reasonable steps to verify the accredited status of an investor.
Form D will be amended to include a check box for 506(c) offerings, enabling the Commission to track the quantity of 506(c) offerings being made.
Almost all of the…

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Today's post provides details about current real estate trends around Seattle’s neighborhoods (U Dist, Northgate) and projections for future trends.

The following article was written by two real estate investment brokers at Kidder Matthews. Jason Rosauer and Rob Anderson (collectively Team Rosauer) lead an investment brokerage team that specializes in property sales of office, industrial, and retail buildings, as well as land development sites throughout the West Coast. They also publish monthly market reports that detail the commercial real estate market in the greater Seattle area. The report offers an inside look at the current real estate trends around Seattle’s neighborhoods and projections for future trends. We’ve broken up the Team Rosauer August Market Report into three posts; the first looked at the trends in Interbay and Issaquah, the second will explore trends in Lake Union and Mercer Island.

Investment market in…

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