California Assembly Bill 929 (Diversity Bill), which was passed by the California State Legislature on August 30, 2020, and signed into law by California Governor Gavin Newsom on September 30, 2020, requires domestic and foreign publicly held corporations headquartered in California to include people from underrepresented communities on their boards of directors. Historically Non-diverse Boards California lawmakers proposed the Diversity Bill to address lack of diversity in corporate board rooms. According to data detailed in…

On August 25, 2020, the U.S. Securities and Exchange Commission (SEC) adopted amendments to the definition of “accredited investor” in Rule 501 promulgated under Regulation D of the Securities Act of 1933. Historically, individual investors who do not meet specific income or net worth tests have been denied many opportunities to invest in private equity transactions regardless of their financial sophistication. The amendments change the definition to more effectively identify institutional and individual investors that…

McDonald’s Corporation (McDonald’s) sued its former Chief Executive Officer, Steve Easterbrook, in August 2020 in an effort to force him to repay the $40 million in severance and equity awards provided to him when the company terminated his employment.  McDonald’s board of directors (Board) originally terminated Easterbrook’s employment without cause in November 2019, but subsequent internal investigations revealed that the Board would have had reason to terminate his employment for “Cause” based upon numerous instances…

On a matter of first impression, the Delaware Court of Chancery (the Court) found in In re WeWork Litigation that corporate officers of a Delaware corporation may not unilaterally deny a director of a corporation access to communications with company counsel or outside counsel based on the premise that such communications are privileged. Background As noted in our prior alert, a special committee (Special Committee) of the board of directors (Board) of The We…

The Delaware Court of Chancery (the Court) in In re Homefed Corporation Stockholder Litigation chronicles a controlling stockholder’s failed attempt to use the protections outlined in Kahn v. M & F Worldwide Corp. (MFW) to qualify for a business judgment review of its going-private, minority stockholder buyout. The court addresses when and how communications directly between controlling and minority stockholders can undermine MFW processes and result in the court reviewing claims under the “entire fairness”…

The definition earnings before interest, taxes, depreciation and amortization (“EBITDA”) and adjusted EBITDA have always been important and highly negotiated pieces of credit agreements and M&A transactions. However, with the unprecedented economic impact of the COVID-19 pandemic, these financial measurements take on even greater importance as borrowers seek to maintain financial covenants in their credit agreements and prospective buyers and sellers struggle to determine whether EBITDA, if determined without an adjustment for the financial impact…

The Delaware Chancery Court in The Anschutz Corporation et. al. v. Brown Robin Capital, LLC[1] ruled against dismissing several of Buyer’s claims in a dispute involving the $106 million acquisition of OnRamp Access, LLC (“Target”) by LightEdge Holdings, LLC (“Buyer”).  Among other claims, Buyer alleged fraud, fraudulent inducement and breach of contract by the owners of Target (“Sellers”) due to breach of several representations and warranties in the unit purchase agreement to purchase Target…