Delaware Puts the Conduct of Business Covenant on Center Stage in COVID-Related M&A Dispute

In the months following the onset of the COVID-19 pandemic, a slew of parties filed lawsuits in US courts relating to M&A transactions that were signed prior to March 2020 and that buyers were seeking to terminate as a result of the pandemic. In these lawsuits, buyers commonly alleged one […]

SEC Enforcement Investigating Potential Federal Securities Law Violations by PPP Borrowers

It’s not just the Justice Department that’s looking into PPP loans – although there appears to be plenty of that going on – the SEC’s Division of Enforcement is also conducting an investigation into certain PPP loan recipients to determine whether there have been violations of the federal securities laws. […]

SEC v. Telegram: Key Takeaways and Implications

On March 24, 2020, Judge P. Kevin Castel of the U.S. District Court for the Southern District of New York granted the Securities and Exchange Commission’s (SEC) request for a preliminary injunction against Telegram Group Inc. and TON Issuer Inc. (collectively, “Telegram”), preventing the distribution of Gram tokens to the […]

Whataday for Special Committees: Salladay v. Lev Clarifies Committee Formation Requirements in Non-MFW Scenarios

In late February as the COVID-19 pandemic was accelerating, the Delaware Chancery Court issued an important decision that is likely to impact transactions during the expected recession. In Salladay v. Lev, C.A. No. 2019-0048-SG (Del. Ch. Feb. 27, 2020) (“Salladay”), the court held that a conflicted transaction – not involving a […]

Remaining Vigilant to Compliance and Enforcement Concerns in Times of Crisis

In times of increased financial stress—and particularly during times of financial shock where expectations and reality diverge significantly and rapidly—internal and external pressures can lead to risk-taking with lasting consequences. For example, pressure often mounts to boost revenue to save a failing quarter, to take advantage of government bailout opportunities, […]

US v. Connolly: District Court Scrutinizes Longtime Corporate Practices for Internal Investigations

“On May 2, 2019, the chief judge for the Southern District of New York, the Honorable Colleen McMahon, issued a decision that pointedly criticized certain long-standing practices by which corporations conduct – and the government directs – internal corporate investigations. In United States v. Connolly, No. 16-cr-0370 (S.D.N.Y. May 2, 2019), […]