The Timing and Substance of M&A Disclosures

Deal-makers and their legal and professional advisers often face the difficult decision of whether they are, at any point prior to signing definitive agreements, required under the federal securities laws to publicly disclose M&A negotiations. Furthermore, if those negotiations result in a signed transaction, the parties and their advisors then need to consider what information to include in the detailed proxy statement sent to target company stockholders to solicit their votes. Two recent decisions provide useful guidance concerning both the timing and substance of disclosures in the context of M&A activity.

Cases in Point

In Levie v. Sears Roebuck & Co., N.D. Ill., No. 04 C 7643 (N.D. Ill. Dec. 18, 2009), set against the backdrop of the 2005 merger between retail giants Sears and Kmart, the United States District Court for the Northern District of Illinois discussed the relevant considerations in determining whether and when disclosure of merger negotiations may be required under the federal securities laws. And, in In re 3Com Shareholders Litigation, Civil Action No. 5067-CC (Del. Ch. Dec. 18, 2009), the Delaware Court of Chancery addressed allegedly inadequate disclosures in a proxy statement sent by 3Com Corporation to solicit stockholder votes in favor of its pending acquisition by Hewlett Packard. In each case, the court sided with target company management in actions brought by unhappy stockholders.

Levie v. Sears Roebuck

In February 2004, Sears CEO Alan J. Lacy began to explore the potential acquisition of his company's competitor, Kmart. To that end, Lacy engaged in discussions with Kmart's Chairman, Edward S. Lampert. By April 2004, after a series of discussions, both sides agreed that Sears would not acquire Kmart. Instead, the parties pursued an “alternative transaction” involving Sears' acquisition of certain stand-alone Kmart stores. On June 30, 2004, the companies announced that Sears would purchase 54 Kmart stores.

Several months passed, during which no discussions took place between the companies. Then, on Oct. 31, 2004, Lacy and Lampert discussed ' for the first time ' the possibility of Kmart acquiring Sears. Over the next two weeks, the parties retained financial and legal advisers and held internal discussions regarding possible strategic combinations. On Nov. 10, Sears and Kmart entered into a confidentiality agreement that allowed Kmart to examine confidential information pertaining to Sears. An initial draft of a merger agreement was sent to Sears by Kmart on Nov. 12. On Nov. 15, Lacy and Lampert reached a “handshake deal” to present to their respective boards of directors, who approved the merger the next day. The transaction was publicly announced on Nov. 17.

Various Sears stockholders filed a class action lawsuit alleging violations by Sears of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Plaintiffs alleged that Sears and Kmart were engaged in merger negotiations from February 2004 until the merger was formally announced in November, and that this negotiation was a “material fact” that should have been disclosed in order to make certain statements made by Sears during the purported class period ' Sept. 9 through Nov. 16 ' not misleading. Sears countered that the merger negotiations did not begin until Oct. 31, well after the beginning of the class period, and further, that it was never under a duty to disclose the merger negotiations, even after they became material. The court granted the defendants' motion for summary judgment on all counts.

The Sears Court's Analysis

The court began by citing the landmark U.S. Supreme Court decision in Basic Inc. v. Levinson, 485 U.S. 224 (1988), for the proposition that “there is no general duty to disclose merger negotiations even when material” because “silence, absent a duty to disclose, is not misleading under Rule 10b-5.” Accordingly, the court explained, “plaintiffs' case is premised entirely on the omission to disclose the merger negotiations in order to make the statements made during the class period non-misleading.”

The plaintiffs relied on five statements made by Sears as the bases for creating a duty on the part of Sears to disclose the merger negotiations under the Exchange Act. The court noted that three of these five statements were made before Oct. 31, 2004, the date on which Sears and Kmart first discussed the possibility of Kmart acquiring Sears. As such, the court held that “these statements could not create a duty to disclose something that had yet to occur.” Implicit in this ruling was the court's rejection of the plaintiffs' contention that Kmart and Sears were engaged in continuous merger negotiations beginning in February 2004.

The court then turned to two statements made by Sears after the merger negotiations began. On Nov. 5, 2004, in response to an announcement by Vornado Realty Trust that it had acquired a 4.3% interest in Sears' stock, Sears announced that it was taking actions to “improve our full-line store performance ' while simultaneously pursuing an aggressive off-mall growth strategy.” This announcement did not mention Sears' negotiations with Kmart. The court found that there was “nothing inaccurate or misleading in the statement with or without disclosure of the merger discussions.” The court explained that “the alleged material omission (that is, the merger discussions) should relate directly to or be sufficiently linked to the express statements made so as to render them inaccurate or misleading.” Because “nothing in the Vornado response refers to the merger negotiations or in any way implies that Sears was not engaged in such negotiations,” the statement was not misleading.

For good measure, the court also observed that, at the time the response to Vornado was issued, the merger negotiations “had not yet become material.” According to the court, at this time, “none of the factual or legal predicates for a merger were in place.” For instance, “[t]here were no board resolutions, no actual negotiations and no instructions to investment bankers to facilitate or explore a merger.” Although each company had mentioned the possibility of a merger with outside advisers and senior management of the companies had engaged in discussions, “no structure had been reached and the parties had not begun due diligence.” In fact, the court noted, “Kmart did not acquire the confidential information it needed to assess the prospect of a merger” until a week after the Vornado statement was issued. As a result, the court characterized the merger negotiations at that time as “preliminary in nature” and, therefore, not material. According to the court, “[t]o hold otherwise would result in endless and bewildering guesses as to the need for disclosure, operate as a deterrent to the legitimate conduct of corporate operations, and threaten to 'bury the shareholders in an avalanche of trivial information'; the very perils that the limit on disclosure imposed by the materiality requirement serves to avoid.”

The final statement on which the plaintiffs relied was contained in Sears' third-quarter Form 10-Q, filed on Nov. 9, 2004. The MD&A included in the Form 10-Q stated that the “company's primary need for liquidity will be to fund the seasonal working capital requirements of its retail businesses and capital expenditures.” At this time, according to plaintiffs, Sears was in reality “seeking to conserve and acquire additional capital to fund the planned merger.” The court found this argument to be “irreconcilable with the explicit mandate of the SEC that when disclosure of merger negotiations 'is not otherwise required, and has not otherwise been made, the MD&A need not contain a discussion of the impact of such negotiations where, in the registrant's view, inclusion of such information would jeopardize completion of the transaction.'” As a result, the court concluded that Sears was under no duty to disclose the merger negotiations with Kmart in its third-quarter Form 10-Q filing.

In re 3Com

Late last year, the board of directors of 3Com approved an all-cash merger in which 3Com would be acquired by Hewlett Packard. In approving the transaction, the board relied in part on a presentation by its financial adviser, Goldman Sachs, concerning the fairness of the $7.90 per share payable to 3Com stockholders in the merger. On Dec. 4, 2009, 3Com filed a proxy statement with the Securities and Exchange Commission (SEC), which included the board's recommendation that 3Com stockholders vote in favor of the merger, a copy of Goldman's opinion and a summary of Goldman's analysis.

Soon thereafter, various 3Com stockholders sought to preliminarily enjoin the transaction, and asked the court for expedited discovery. In support of its motion, plaintiffs alleged that the 3Com proxy statement failed to disclose: 1) a “meaningful description” of the projections used by management and Goldman; 2) management's downward revision of its projections after Hewlett Packard made its offer; 3) valuations of each of 3Com's three operating units; 4) 3Com's stand-alone plan and strategic alternatives considered by the board as an alternative to the merger; and 5) that Goldman deviated from “accepted” valuation practices and the methodology used in valuing a previous attempted buyout of 3Com. The court denied the plaintiffs' motion.

The 3Com Court's Analysis

The court began by noting that the key issue to be resolved was “whether there is a colorable claim that any of plaintiffs' alleged disclosure allegations are material.” Next, the court explained that in determining whether there is such a colorable claim, “an omitted fact is material if a reasonable stockholder would consider it important in a decision pertaining to his or her stock” by “significantly alter[ing] the total mix of information available to stockholders.” The court also noted, however, that “'[o]mitted facts are not material simply because they are helpful.' So long as the proxy statement, viewed in its entirety, sufficiently discloses and explains the matter to be voted on, the omission or inclusion of a particular fact is generally left to management's business judgment.”

With respect to plaintiffs' claim that the proxy statement's summary description of the projections contained material omissions ' including cash flow measures, EBIT measures and EBITDA measures ' the court observed that the proxy statement contained a “thorough description regarding the process ' [management] went through to obtain the Merger price, adequately explains why they believe the Merger price is fair ' and thoroughly summarizes the work done by Goldman in rendering its fairness opinion.” Rejecting the notion that “full versions of the summarized projections must be included,” the court added that it was “reluctant to require full disclosure of the projections underlying such summaries as I do not believe it would alter the total mix of available information and may even undermine the clarity of the summaries.”

Plaintiffs also claimed that 3Com management revised its projections downward, after receiving Hewlett Packard's $7.90 per share all-cash offer, in order “to make HP's offer look more appealing, and attacked the proxy statement for failing to disclose the reasons for that revision.” The court, finding “no rule that precludes management or its financial adviser from using alternative sets of financial projections in evaluating the advisability and fairness of a merger,” noted that the proxy statement “disclosed both sets of projections ' and clearly explained that both were used.” As such, “[a] further explanation ' would not significantly alter the total mix of information available to stockholders.”

Next, the court found that management's failure to include information concerning the value of 3Com's three operating units was not actionable because plaintiffs had not alleged that such information was utilized by Hewlett Packard in making its offer to 3Com. Similarly, the court found that whether Goldman should have conducted a “sum-of-the-parts” analysis as part of its valuation of 3Com “is best left to the discretion of investment bankers and company management.” In the court's view, the plaintiffs' complaint represented “a mere disagreement with the fairness opinion that can be adequately addressed by an appraisal action” under Section 262 of the Delaware General Corporation Law.

The court was not troubled by the failure of the proxy statement to include a discussion of 3Com's alternatives to the merger. In analyzing this alleged deficiency, the court distinguished the roles and responsibilities of management versus stockholders: “Delaware law does not require management 'to discuss the panoply of possible alternatives to the course of action it is proposing ' .' This is consistent with the principle that too much information can be as misleading as too little. Moreover, under our law stockholders have a veto power over fundamental corporate changes (such as a merger) but entrust management with evaluating the alternatives and deciding which fundamental changes to propose.”

Finally, the court addressed plaintiffs' claim that the proxy statement should have disclosed “why Goldman deviated from accepted practices.” In this regard, the court noted that the Delaware standard for reviewing valuation work of an investment banker is that the valuation “must be accurately described and appropriately qualified. So long as that is done, there is no need to disclose any discrepancy between the financial adviser's methodology and the Delaware fair value standard under Section 262 (or any other standard for that matter).” In the court's view, the proxy statement provided sufficient disclosure by accurately describing “the sources of information Goldman relied on, significant assumptions that were made in generating estimates, and important limitations on the validity of Goldman's opinion that the Merger is fair to stockholders,” as well as the “material analyses” performed by Goldman and furnished to management and the “final range of value estimates for each analysis.”

The court also observed that because “[v]aluing a company as a going concern is a subjective and uncertain enterprise” with “limitless opportunities for disagreement ' quibbles with a financial adviser's work simply cannot be the basis of a disclosure claim.” Rather, in the court's view, disputes of this nature should be “resolved via an appraisal action.” Similarly, the court characterized plaintiffs' complaint that Goldman used a valuation methodology different from that used in a previous valuation of 3Com as another “quibble” that can best be “remedied by the appraisal remedy.”

Conclusion

The Sears and 3Com decisions should be welcome news to deal-makers and their M&A advisers. In Sears, the principles cited by the Court support the view that, as a general matter, disclosures should not be required even though active negotiations are under way and the parties are “kicking the tires” of a transaction. Although the court refused to draw a “bright line” by which to determine materiality, its analysis should be helpful in making this difficult judgment call. Of course, if discussions have progressed to a point at which they would be considered “material” and a party to those discussions makes public statements that “relate directly” to, or are contradicted by, the merger discussions, disclosure will be required even though a final agreement has not been signed.

Similarly, the 3Com decision should be helpful in assessing various disclosure issues that often arise in the preparation of M&A disclosure documents. Of particular comfort is the 3Com court's characterization of several of plaintiffs' complaints as “quibbles,” as well as the court's recognition that more disclosure is not necessarily good disclosure.

Robert S. Reder, a member of this newsletter's Board of Editors, is a New York-based partner in the Global Corporate Group of Milbank, Tweed, Hadley & McCloy LLP. Peter B. Heller and Nicholas A. Venditto are associates in the same group.

Deal-makers and their legal and professional advisers often face the difficult decision of whether they are, at any point prior to signing definitive agreements, required under the federal securities laws to publicly disclose M&A negotiations. Furthermore, if those negotiations result in a signed transaction, the parties and their advisors then need to consider what information to include in the detailed proxy statement sent to target company stockholders to solicit their votes. Two recent decisions provide useful guidance concerning both the timing and substance of disclosures in the context of M&A activity.

Cases in Point

In Levie v. Sears Roebuck & Co., N.D. Ill., No. 04 C 7643 (N.D. Ill. Dec. 18, 2009), set against the backdrop of the 2005 merger between retail giants Sears and Kmart, the United States District Court for the Northern District of Illinois discussed the relevant considerations in determining whether and when disclosure of merger negotiations may be required under the federal securities laws. And, in In re 3Com Shareholders Litigation, Civil Action No. 5067-CC (Del. Ch. Dec. 18, 2009), the Delaware Court of Chancery addressed allegedly inadequate disclosures in a proxy statement sent by 3Com Corporation to solicit stockholder votes in favor of its pending acquisition by Hewlett Packard. In each case, the court sided with target company management in actions brought by unhappy stockholders.

Levie v. Sears Roebuck

In February 2004, Sears CEO Alan J. Lacy began to explore the potential acquisition of his company's competitor, Kmart. To that end, Lacy engaged in discussions with Kmart's Chairman, Edward S. Lampert. By April 2004, after a series of discussions, both sides agreed that Sears would not acquire Kmart. Instead, the parties pursued an “alternative transaction” involving Sears' acquisition of certain stand-alone Kmart stores. On June 30, 2004, the companies announced that Sears would purchase 54 Kmart stores.

Several months passed, during which no discussions took place between the companies. Then, on Oct. 31, 2004, Lacy and Lampert discussed ' for the first time ' the possibility of Kmart acquiring Sears. Over the next two weeks, the parties retained financial and legal advisers and held internal discussions regarding possible strategic combinations. On Nov. 10, Sears and Kmart entered into a confidentiality agreement that allowed Kmart to examine confidential information pertaining to Sears. An initial draft of a merger agreement was sent to Sears by Kmart on Nov. 12. On Nov. 15, Lacy and Lampert reached a “handshake deal” to present to their respective boards of directors, who approved the merger the next day. The transaction was publicly announced on Nov. 17.

Various Sears stockholders filed a class action lawsuit alleging violations by Sears of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Plaintiffs alleged that Sears and Kmart were engaged in merger negotiations from February 2004 until the merger was formally announced in November, and that this negotiation was a “material fact” that should have been disclosed in order to make certain statements made by Sears during the purported class period ' Sept. 9 through Nov. 16 ' not misleading. Sears countered that the merger negotiations did not begin until Oct. 31, well after the beginning of the class period, and further, that it was never under a duty to disclose the merger negotiations, even after they became material. The court granted the defendants' motion for summary judgment on all counts.

The Sears Court's Analysis

The court began by citing the landmark U.S. Supreme Court decision in Basic Inc. v. Levinson , 485 U.S. 224 (1988), for the proposition that “there is no general duty to disclose merger negotiations even when material” because “silence, absent a duty to disclose, is not misleading under Rule 10b-5.” Accordingly, the court explained, “plaintiffs' case is premised entirely on the omission to disclose the merger negotiations in order to make the statements made during the class period non-misleading.”

The plaintiffs relied on five statements made by Sears as the bases for creating a duty on the part of Sears to disclose the merger negotiations under the Exchange Act. The court noted that three of these five statements were made before Oct. 31, 2004, the date on which Sears and Kmart first discussed the possibility of Kmart acquiring Sears. As such, the court held that “these statements could not create a duty to disclose something that had yet to occur.” Implicit in this ruling was the court's rejection of the plaintiffs' contention that Kmart and Sears were engaged in continuous merger negotiations beginning in February 2004.

The court then turned to two statements made by Sears after the merger negotiations began. On Nov. 5, 2004, in response to an announcement by Vornado Realty Trust that it had acquired a 4.3% interest in Sears' stock, Sears announced that it was taking actions to “improve our full-line store performance ' while simultaneously pursuing an aggressive off-mall growth strategy.” This announcement did not mention Sears' negotiations with Kmart. The court found that there was “nothing inaccurate or misleading in the statement with or without disclosure of the merger discussions.” The court explained that “the alleged material omission (that is, the merger discussions) should relate directly to or be sufficiently linked to the express statements made so as to render them inaccurate or misleading.” Because “nothing in the Vornado response refers to the merger negotiations or in any way implies that Sears was not engaged in such negotiations,” the statement was not misleading.

For good measure, the court also observed that, at the time the response to Vornado was issued, the merger negotiations “had not yet become material.” According to the court, at this time, “none of the factual or legal predicates for a merger were in place.” For instance, “[t]here were no board resolutions, no actual negotiations and no instructions to investment bankers to facilitate or explore a merger.” Although each company had mentioned the possibility of a merger with outside advisers and senior management of the companies had engaged in discussions, “no structure had been reached and the parties had not begun due diligence.” In fact, the court noted, “Kmart did not acquire the confidential information it needed to assess the prospect of a merger” until a week after the Vornado statement was issued. As a result, the court characterized the merger negotiations at that time as “preliminary in nature” and, therefore, not material. According to the court, “[t]o hold otherwise would result in endless and bewildering guesses as to the need for disclosure, operate as a deterrent to the legitimate conduct of corporate operations, and threaten to 'bury the shareholders in an avalanche of trivial information'; the very perils that the limit on disclosure imposed by the materiality requirement serves to avoid.”

The final statement on which the plaintiffs relied was contained in Sears' third-quarter Form 10-Q, filed on Nov. 9, 2004. The MD&A included in the Form 10-Q stated that the “company's primary need for liquidity will be to fund the seasonal working capital requirements of its retail businesses and capital expenditures.” At this time, according to plaintiffs, Sears was in reality “seeking to conserve and acquire additional capital to fund the planned merger.” The court found this argument to be “irreconcilable with the explicit mandate of the SEC that when disclosure of merger negotiations 'is not otherwise required, and has not otherwise been made, the MD&A need not contain a discussion of the impact of such negotiations where, in the registrant's view, inclusion of such information would jeopardize completion of the transaction.'” As a result, the court concluded that Sears was under no duty to disclose the merger negotiations with Kmart in its third-quarter Form 10-Q filing.

In re 3Com

Late last year, the board of directors of 3Com approved an all-cash merger in which 3Com would be acquired by Hewlett Packard. In approving the transaction, the board relied in part on a presentation by its financial adviser, Goldman Sachs, concerning the fairness of the $7.90 per share payable to 3Com stockholders in the merger. On Dec. 4, 2009, 3Com filed a proxy statement with the Securities and Exchange Commission (SEC), which included the board's recommendation that 3Com stockholders vote in favor of the merger, a copy of Goldman's opinion and a summary of Goldman's analysis.

Soon thereafter, various 3Com stockholders sought to preliminarily enjoin the transaction, and asked the court for expedited discovery. In support of its motion, plaintiffs alleged that the 3Com proxy statement failed to disclose: 1) a “meaningful description” of the projections used by management and Goldman; 2) management's downward revision of its projections after Hewlett Packard made its offer; 3) valuations of each of 3Com's three operating units; 4) 3Com's stand-alone plan and strategic alternatives considered by the board as an alternative to the merger; and 5) that Goldman deviated from “accepted” valuation practices and the methodology used in valuing a previous attempted buyout of 3Com. The court denied the plaintiffs' motion.

The 3Com Court's Analysis

The court began by noting that the key issue to be resolved was “whether there is a colorable claim that any of plaintiffs' alleged disclosure allegations are material.” Next, the court explained that in determining whether there is such a colorable claim, “an omitted fact is material if a reasonable stockholder would consider it important in a decision pertaining to his or her stock” by “significantly alter[ing] the total mix of information available to stockholders.” The court also noted, however, that “'[o]mitted facts are not material simply because they are helpful.' So long as the proxy statement, viewed in its entirety, sufficiently discloses and explains the matter to be voted on, the omission or inclusion of a particular fact is generally left to management's business judgment.”

With respect to plaintiffs' claim that the proxy statement's summary description of the projections contained material omissions ' including cash flow measures, EBIT measures and EBITDA measures ' the court observed that the proxy statement contained a “thorough description regarding the process ' [management] went through to obtain the Merger price, adequately explains why they believe the Merger price is fair ' and thoroughly summarizes the work done by Goldman in rendering its fairness opinion.” Rejecting the notion that “full versions of the summarized projections must be included,” the court added that it was “reluctant to require full disclosure of the projections underlying such summaries as I do not believe it would alter the total mix of available information and may even undermine the clarity of the summaries.”

Plaintiffs also claimed that 3Com management revised its projections downward, after receiving Hewlett Packard's $7.90 per share all-cash offer, in order “to make HP's offer look more appealing, and attacked the proxy statement for failing to disclose the reasons for that revision.” The court, finding “no rule that precludes management or its financial adviser from using alternative sets of financial projections in evaluating the advisability and fairness of a merger,” noted that the proxy statement “disclosed both sets of projections ' and clearly explained that both were used.” As such, “[a] further explanation ' would not significantly alter the total mix of information available to stockholders.”

Next, the court found that management's failure to include information concerning the value of 3Com's three operating units was not actionable because plaintiffs had not alleged that such information was utilized by Hewlett Packard in making its offer to 3Com. Similarly, the court found that whether Goldman should have conducted a “sum-of-the-parts” analysis as part of its valuation of 3Com “is best left to the discretion of investment bankers and company management.” In the court's view, the plaintiffs' complaint represented “a mere disagreement with the fairness opinion that can be adequately addressed by an appraisal action” under Section 262 of the Delaware General Corporation Law.

The court was not troubled by the failure of the proxy statement to include a discussion of 3Com's alternatives to the merger. In analyzing this alleged deficiency, the court distinguished the roles and responsibilities of management versus stockholders: “Delaware law does not require management 'to discuss the panoply of possible alternatives to the course of action it is proposing ' .' This is consistent with the principle that too much information can be as misleading as too little. Moreover, under our law stockholders have a veto power over fundamental corporate changes (such as a merger) but entrust management with evaluating the alternatives and deciding which fundamental changes to propose.”

Finally, the court addressed plaintiffs' claim that the proxy statement should have disclosed “why Goldman deviated from accepted practices.” In this regard, the court noted that the Delaware standard for reviewing valuation work of an investment banker is that the valuation “must be accurately described and appropriately qualified. So long as that is done, there is no need to disclose any discrepancy between the financial adviser's methodology and the Delaware fair value standard under Section 262 (or any other standard for that matter).” In the court's view, the proxy statement provided sufficient disclosure by accurately describing “the sources of information Goldman relied on, significant assumptions that were made in generating estimates, and important limitations on the validity of Goldman's opinion that the Merger is fair to stockholders,” as well as the “material analyses” performed by Goldman and furnished to management and the “final range of value estimates for each analysis.”

The court also observed that because “[v]aluing a company as a going concern is a subjective and uncertain enterprise” with “limitless opportunities for disagreement ' quibbles with a financial adviser's work simply cannot be the basis of a disclosure claim.” Rather, in the court's view, disputes of this nature should be “resolved via an appraisal action.” Similarly, the court characterized plaintiffs' complaint that Goldman used a valuation methodology different from that used in a previous valuation of 3Com as another “quibble” that can best be “remedied by the appraisal remedy.”

Conclusion

The Sears and 3Com decisions should be welcome news to deal-makers and their M&A advisers. In Sears, the principles cited by the Court support the view that, as a general matter, disclosures should not be required even though active negotiations are under way and the parties are “kicking the tires” of a transaction. Although the court refused to draw a “bright line” by which to determine materiality, its analysis should be helpful in making this difficult judgment call. Of course, if discussions have progressed to a point at which they would be considered “material” and a party to those discussions makes public statements that “relate directly” to, or are contradicted by, the merger discussions, disclosure will be required even though a final agreement has not been signed.

Similarly, the 3Com decision should be helpful in assessing various disclosure issues that often arise in the preparation of M&A disclosure documents. Of particular comfort is the 3Com court's characterization of several of plaintiffs' complaints as “quibbles,” as well as the court's recognition that more disclosure is not necessarily good disclosure.

Robert S. Reder, a member of this newsletter's Board of Editors, is a New York-based partner in the Global Corporate Group of Milbank, Tweed, Hadley & McCloy LLP. Peter B. Heller and Nicholas A. Venditto are associates in the same group.