Jane is co-head of the firm's mergers & acquisitions group as well as the technology, media & telecommunications group. Jane is also head of the firm’s retail & consumer brand practice group, maintaining an office in both New York and Boston. She advises a wide range of public and private companies and their boards of directors with respect to corporate governance, securities regulation and general legal matters. Jane has extensive experience counseling U.S. companies in the retail and consumer products industry. Some of her clients include Green Mountain Coffee Roasters, The Timberland Company, Oscar de la Renta Ltd., General Catalyst, and Castanea Partners. Jane is also the Chair of the Firm's Women's Forum and a member of the Diversity Committee.
Professional & Civic Activities
The Delaware Supreme Court recently held that fee-shifting provisions in the bylaws of a Delaware non-stock corporation were valid on their face and were enforceable against members who joined before their adoption. The court further stated that adopting fee-shifting provisions with an intent to deter litigation would not necessarily render such bylaws unenforceable.
A recent Delaware Court of Chancery decision is illustrative of the principle that merger partners should not assume that anything less than strict compliance with notice requirements (particularly when they relate to termination rights) and deadlines in a merger agreement will be enforced. The case is also a cautionary tale of why one merger partner should never assume that the other merger partner still wants to do the deal as much as it does.
While Kahn v M&F Worldwide Corp provided helpful guideposts for avoiding an entire fairness review in controlling stockholder transactions, as with any new doctrine, questions remained as to the judgment's application to different types of deal and negotiation and the consequences of small deviations from strict adherence therein. Recent guidance from the Delaware Court of Chancery has given way to updated ground rules for controlling stockholder transactions.
The Delaware Court of Chancery recently held that the best evidence of a company's fair value was its 30-day average unaffected (pre-announcement) market price. The case potentially represents a significant shift in how appraisal cases are decided. It may also be useful in understanding how the Delaware courts will apply two recent Supreme Court judgments which gave significant weight to the deal price as the best measure of fair value where it results from a third-party, arm's-length transaction.
In a recent opinion the Delaware Supreme Court reversed a lower court ruling enjoining a merger transaction, holding that Revlon duties do not require a board to shop a corporation affirmatively and that a board can satisfy Revlon scrutiny by pursuing a reasonable sale process in good faith, implementing a "passive market check" and providing its stockholders with a full and informed opportunity to vote on the transaction.
Under Section 102(b)(7) of the Delaware General Corporation Law, a company may adopt a bylaw provision exculpating breaches of a director's duty of care, and many do. A recent case will offer the Delaware Supreme Court an opportunity to discuss the application of this section to transactions involving a controlling stockholder that are subject to the stringent review of the entire fairness standard.
In In Re Rural Metro Corporation Stockholders Litigation, the Delaware Court of Chancery held Rural/Metro's financial adviser, RBC Capital Markets, liable for aiding and abetting the Rural/Metro board of directors' breach of its fiduciary duties in connection with the acquisition of Rural/Metro by Warburg Pincus. RBC was held liable for 83% of the damages suffered by the class, or $75.8 million.
In recent appraisal actions the Delaware Court of Chancery has shown a willingness to look to deal consideration in arm's-length transactions as the best indicator of fair value, breaking from its tradition of using discounted cash flow to determine a company's value. Two recent decisions confirm this trend, but also show the limitations of the court's willingness to use deal consideration as a value measure.
The Delaware Court of Chancery recently declined to invalidate Sotheby's adoption of a two-tiered stockholder rights plan (poison pill) with a lower trigger for activist investors. The Sotheby's board subsequently settled with the activist investor that the poison pill was meant to deter.
The Delaware Court of Chancery has published a post-trial opinion in In Re Rural/Metro Corporation Stockholders Litigation. The decision is the latest in a series of Delaware opinions concerning conflicts of interest of banks and investment firms in advising companies in sale transactions, and evidences Delaware's continuing scepticism regarding staple financing.
The activist shareholder space experienced a wide variety of developments in 2013. This recent activity suggests that shareholder contests are no longer limited to large companies and that anticipation and defence against unwelcome activism may become a more commonplace aspect of a company's general corporate governance considerations.
In a recent appraisal action, the court adopted the deal price as the appropriate measure of fair value, which is contrary to the traditional emphasis on discounted cash flow valuations and recent opinions that expressly declined to adopt deal price as an appropriate measure of fair value.
The Delaware Court of Chancery has refused to issue an anti-suit injunction barring a Louisiana state stockholder litigation challenging Sumitomo Corporation of America's acquisition of Edgen Group, despite the fact that Edgen had a Delaware forum selection clause in its certificate of incorporation.
In 2013 Jos A Bank made an unsolicited offer to acquire Men's Wearhouse, which precipitated a flurry of competing acquisition offers and takeover defences by the competing clothing retailers. Jos A Bank formally withdrew its offer later in the year, at which point Men's Wearhouse made a counteroffer to acquire Jos A Bank.
A recent court decision highlights the need to address explicitly by contract which party or parties will control attorney-client privilege with respect to pre-closing communications in the context of a sale structured as a merger where legal counsel jointly represents both the sellers and the target company acquired in the merger.
In a recent decision concerning the take-private of Kenneth Cole Productions, the Commercial Division of New York State Supreme Court dismissed stockholder plaintiffs' claims regarding the propriety of that transaction and held that the business judgement rule governed such claims.
A Delaware Supreme Court decision affirming that a contractual obligation to negotiate in good faith was enforceable serves to remind that an agreement to negotiate in good faith should not be entered into lightly, and that it may be risky to unilaterally depart from the key agreed terms during a negotiation if a letter of intent includes a binding good-faith negotiation obligation.
The Delaware Chancery Court recently granted an injunction requiring Morgans Hotel Group Co to reinstate its annual meeting and shareholder voting record dates and refrain from moving forward with a strategic transaction with Yucaipa - a private equity firm controlled by one of Morgans' largest creditors and a member of Morgans' board - until the board had approved the transaction pursuant to a proper process.
The Delaware Court of Chancery has confirmed that the business judgement rule, rather than the more searching entire fairness standard, will apply to controlling shareholder transactions if, from the outset, the merger is subject to both negotiation and approval by a special committee of independent directors and approval by an uncoerced, fully informed vote of a majority of the minority investors.