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Chancery Permits Reverse Veil Piercing
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House Financial Services Committee Approves Climate Risk Disclosure Act
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PCAOB Proposes Rule to Create Framework for HFCAA Determinations By
May 13, 2021
The Public Company Accounting Oversight Board has proposed a new rule provide a framework for its determinations under the Holding Foreign Companies Accountable Act, or the HFCAA.
The HFCAA calls for the Board to determine whether it is unable to inspect or investigate completely registered firms located in a foreign jurisdiction because of a position taken by an authority in that jurisdiction. The HFCAA, among other things, also mandates that after the Board makes such a determination, the Commission shall require covered issuers that retain firms subject to the Board’s determination to make certain disclosures in their annual reports and, eventually, if certain conditions persist, shall prohibit trading in those issuers’ securities.
Votes Compelled by Stockholders Agreement Do Not Count Towards Corwin Cleansing By
In connection with an M&A transaction, in
In Re Pattern Energy Group Inc. Stockholders Litigation the Delaware Court of Chancery determined that that the plaintiff had stated a claim against the director defendants for breach of the duty of loyalty. The Court then considered the director defendants’ argument that any such breach was cleansed by a stockholder vote and that therefore dismissal was appropriate under
Corwin.
Corwin gives rise to the irrebuttable presumption of the business judgment rule when a transaction “is approved by a fully informed, uncoerced vote of the disinterested stockholders.”
Delegating Preparation of Proxy Statement to Management was an Unexculpated Act of Bad Faith By
May 8, 2021
In Re Pattern Energy Group Inc. Stockholders Litigation involved an M&A transaction where the sales process of Pattern Energy Group Inc. was run by an undisputedly disinterested and independent special committee that recognized and nominally managed conflicts, proceeded with advice from an unconflicted banker and counsel, and conducted a lengthy process attracting numerous suitors that the special committee pressed for value. The foregoing positive attributes were offset by selecting a bidder that did not offer the highest price at the behest of perhaps conflicted parties supported by conflicted management.
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