The Delaware General Corporation Law (§ 102(b)(7)) has been amended, effective August 1, 2022, to permit exculpation of corporate officers, but in a more limited way than the exculpation of directors that has long been permitted. Unlike directors, officers may be exculpated by a provision in the certificate of incorporation
Private Placements
Delaware Decision Has Lessons for Lenders and Others
On December 8, 2020, the Delaware Court of Chancery in Stream TV Networks, Inc. v. SeeCubic, Inc.[1] upheld a unique structure established by secured lenders to protect their interests and in doing so the Court addressed a number of corporate law issues.
Stream TV Networks, Inc. (“Stream“) was a…
SEC Revision of MD&A – Focus on Future Uncertainties Disclosure
The Securities and Exchange Commission has continued its effort to update and streamline the disclosure requirements for filings with the SEC. In November, the SEC adopted amendments to the rules for Management’s Discussion and Analysis and related financial disclosures. [1] MD&A, because of its principles-based nature, is among the most…
SEC Adopts Significant Changes in Regulation of Exempt Offerings (UPDATED)
The Securities and Exchange Commission on November 2, 2020, by a 3 to 2 vote, adopted significant changes to the rules governing capital raising through private offerings and other offerings exempt from registration under the Securities Act of 1933. The adopting release (available here) indicates that these changes are…
SEC Reminds Private Equity Firms of Compliance Obligations
In a settled enforcement action,[1] the Securities and Exchange Commission reminded private equity firms and registered investment advisors of their obligation to implement and enforce compliance procedures, in particular procedures to prevent the misuse of material non-public information. In this action, Ares Management LLC agreed to a $1 million…
Locke Lord QuickStudy: SEC Streamlines Financial Statement Requirements for Acquired and Disposed Businesses
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NYSE Follows NASDAQ in Temporarily Exempting Some Private Offerings From Shareholder Approval
On May 14, 2020, the NYSE adopted temporary rules that will permit its listed companies to issue more than 20% of their presently outstanding common stock in a private placement at a discount without the shareholder approval that such a transaction would normally require. Designed to address liquidity needs of…
SEC Emphasizes Meaningful Disclosure Amid COVID-19 Uncertainties
In a Statement (available here) on April 8, 2020, SEC Chairman Jay Clayton and Corporation Finance Division Director Bill Hinman supplemented earlier SEC guidance (discussed here) to emphasize the importance of disclosures by public companies about the effects of the COVID-19 pandemic on their operations, financial condition and…
Delaware Supreme Court Upholds Federal Forum Selection Provisions
The Delaware Supreme Court, on March 18, 2020, in Salzberg v. Sciabacucchi, reversed the decision of the Court of Chancery and upheld the validity of a forum selection provision in the certificate of incorporation of a Delaware corporation requiring claims under the Securities Act of 1933 to be brought…
SEC Provides Guidance on Performance Metrics in MD&A; Proposes Financial Disclosure Changes
The Securities and Exchange Commission, on January 30, 2020, issued guidance to reporting companies about the use of key performance indicators and other metrics, including those that are non-GAAP financial measures, in Management’s Discussion and Analysis (Release 33-10751). The SEC also proposed to amend Regulation S-K and MD&A,…