Big Brother Is Watching
November 01, 2004
Companies considering outsourcing today, and companies that have already outsourced significant functions and processes, face an increasingly complex web of domestic and foreign laws and regulations at various levels of government. Compliance with those laws in the context of an outsourcing transaction poses a considerable and growing challenge. This article examines three of the hottest topics in the area of regulatory compliance in outsourcing: Sarbanes-Oxley, privacy, and legislative initiatives focusing on offshore outsourcing.
Making the Case for a 'Good Faith' Chapter 11 Filing
October 29, 2004
The distinction between recourse to Chapter 11 protection as a legitimate means to maximize the value of a company's assets and/or to restructure its financially troubled yet otherwise viable operations, on the one hand, and clear bankruptcy abuse, on the other, is sometimes murky. A court called upon to make such a distinction is obliged to "get into the debtor's head" and investigate the board's motives for commencing a bankruptcy case and, in some cases, to decide whether the debtor's otherwise permissible use of the powerful provisions of federal bankruptcy law is impermissible because the debtor's motives are antithetical to the basic purposes of bankruptcy.
U.S. Recognition of International Financial Restructurings
October 29, 2004
There has been a significant increase in litigation in the U.S. under Section 304 of the U.S. Bankruptcy Code. It is through that statutory mechanism that foreign issuers, having sold debt in the U.S., restructure the debt under foreign restructuring regimes and then return to the U.S. for "recognition." Recognition under ' 304 has been read to cut off claims and litigation by U.S. creditors in U.S. courts, avoid U.S. judgments for collection, and hence can pave the way for the foreign company to access the U.S. capital markets in the future.
Viruses, Adware and Spyware Attack Legal Framework
October 27, 2004
Back in the good old days, electronic evidence for civil cases could be gathered from a custodian's computer, processed to TIFF, Bates numbered and introduced into evidence. Concerns over chain of custody and authenticity were talked about, but rarely argued in the courtroom. <br>It's not so simple anymore. Viruses, spyware, adware and hijacking are attacking our legal framework for electronic evidence and impacting specific areas of law, such as privacy, attorney client privilege, trade secret, criminal law and products liability.
SEC's New Disclosure Rules
October 14, 2004
On March 16, 2004, the Securities and Exchange Commission issued final rules amending Form 8-K to increase significantly the number of events that trigger the requirement to file and shorten the deadline for filing. The new rules became effective on Aug. 23, 2004 and significantly expand the filing and disclosure requirements applicable to public companies with respect to mergers and acquisitions and other material transactions. The rules are another in a long series of measures adopted by the SEC pursuant to the Sarbanes-Oxley Act of 2002 and are intended to improve the dissemination of information regarding public companies to investors in a timely manner.
Managing IP Value at Risk
October 08, 2004
In Part One of this article, we examined the risks to intellectual property (IP) value that would most preoccupy IP professionals, including: third-party risks for infringement liability, first-party risks to IP assets, and Directors & Officers (D&O) risks arising out of relevant valuation and disclosure. However, as IP specifically accounts for a higher ratio of market capitalization and shareholder value for publicly traded corporations, strategic choices relating to IP impact the firm's financial fortunes in more subtle ways, commensurate with that increased value. To cite one salient example: For IP-rich companies, tax planning is increasingly intertwined with Intellectual Asset Management (IAM) strategy.
Sale-Leaseback Transactions in the 'Corporate Scandal' Era
October 06, 2004
In the era following Enron, Worldcom, Tyco, IMClone and Martha Stewart, when fraudulent actions, or even alleged fraudulent actions, can cause significant stock market losses, those operating "on the edge," if found guilty of "going over the edge," may face a sentence that could include incarceration as well as economic punishment. Since the corporate scandal trials almost always involve financial re-engineering, it is no surprise that these trials and the concomitant publicity would have an impact on sale-leaseback transactions ("SLTs") and those planning such transactions. It thus should be expected that in the post-Enron era, all financial and accounting transactions will be examined with a heightened degree of scrutiny, particularly those with an aroma of fancy accounting. Corporate executives and outside advisers now know that it is much harder to obtain a free pass for bad accounting. With the stakes for advising aggressively on SLTs having been significantly raised, it follows that SLTs are now becoming increasingly more difficult and complicated to complete.
The Mutual Fund Scandals: What's A Plan Sponsor To Do?
October 01, 2004
There is an industry-wide epidemic amongst mutual funds of both insider trading and market timing to the diminution of the ordinary stakeholder, including defined contribution plan account balances. Late trading is the clearly illegal practice of placing orders after the day's close at 4 p.m., and market timing is the disruptive (but not necessarily illegal) practice of trading quickly in-and-out of a fund. <br>This article is intended to assist plan fiduciaries (<i>eg</i>, law firms sponsors of pension plans and law firm clients) regarding how to behave in a fiduciarily appropriate manner.
Special Issue: Securities Enforcement Actions After SOX
September 30, 2004
The Securities and Exchange Commission (SEC) was created by Congress in the aftermath of the 1929 stock market crash, the cause of which was widely attributed to fraudulent and deceptive practices on Wall Street. It is an independent regulatory agency whose five commissioners, including a Chairman, are appointed by the President. The SEC's Division of Enforcement is the "police force" of the Commission; it is responsible for the civil and administrative enforcement of the various federal securities laws. The Enforcement Division also typically works closely with U.S. Attorney's Offices throughout the country to assist with the criminal prosecution of securities violations.
