According to Bank of America’s board, if three Delaware plaintiffs’ firms wanted to settle their shareholder derivative suit accusing the board of breaching its duty when it acquired Merrill Lynch, they should have asked. Instead, the Delaware firms bickered amongst themselves and refused to participate meaningfully in settlement talks, board members’ counsel at Davis Polk & Wardwell and Richards, Layton & Finger wrote in a brief filed in Delaware Chancery Court on Wednesday.
Last month, a prominent intellectual property partner at Dewey & LeBoeuf told Casey Sullivan at the Los Angeles Daily Journal that Dewey was indeed putting off partner shares, but he said it wasn’t a big deal. Such deferred payments, said Henry Bunsow, are common. “I have confidence that (partners) will be treated fairly within the parameters of what the firm is dealing with,” he said. (The Daily Journal story is behind a paywall, but Above the Law has generous excerpts.)
The most important woman in Bank of America’s life right now may well be New York State Supreme Court Justice Barbara Kapnick. In the last five days, Kapnick has presided over two critical hearings, one to determine whether the BofA-led group challenging MBIA’s $5 billion restructuring can put on live witnesses and the other to determine whether BofA’s proposed $8.5 billion settlement with investors in Countrywide mortgage-backed securities will remain a special proceeding under New York trust law.
Corporations, as Mitt Romney famously reminded us this summer in Iowa, are people under the laws of the United States. Just take a look at the U.S. Supreme Court‘s 2010 ruling in Citizens United v. Federal Election Commission. The five justices in the majority (you know who they are) held that corporations are entitled to the same First Amendment right to free speech as regular old people, so Congress’ attempt to ban corporate electioneering was unconstitutional.
The follow-up to the New York Times blockbuster scoop on Wal-Mart’s alleged cover-up of $24 million in Mexican bribes has, quite rightly, focused on the company’s potential Foreign Corrupt Practices Act exposure. But that’s not the only law Wal-Mart and its executives should be worrying about.
Remember U.S. District Judge Victor Marrero‘s opus last month in a hedge fund case against Goldman Sachs? The Manhattan federal judge refused to dismiss claims that Goldman duped the fund, Dodona, into investing in doomed-to-fail Hudson collateralized debt obligations. In 64 vivid pages, Marrero detailed the fund’s allegations that Goldman engaged in a sweeping effort, initiated by CFO David Viniar, to shed its exposure to subprime mortgages — and simultaneously to take advantage of clients who were slower to perceive the looming collapse of the mortgage-backed securities market. Marrero described the alleged scheme as “not only reckless, but bordering on cynical.”
It’s not easy for antitrust plaintiffs to get past a defense motion to dismiss. Before the U.S. Supreme Court raised the pleading standard for everyone in Ashcroft v. Iqbal in 2009, it imposed that tough burden on antitrust claimants in Bell Atlantic v. Twombly, a 2007 opinion that held it’s not enough just to argue that alleged conspirators engaged in parallel price-fixing. Under Twombly, antitrust complaints have to offer detailed and specific facts to support a plausible argument that defendants colluded to restrict competition.
As Reuters reported Tuesday in a piece on Citigroup shareholders voting against the $15 million board-approved pay package for CEO Vikram Pandit, investors appear to be increasingly skeptical of lavish pay for executives of corporations with underperforming stock. With companies entering the second proxy season in which shareholders can offer an advisory say on executive pay, compensation and proxy experts are predicting more votes against compensation packages than we saw in 2011, when 45 companies got a thumbs-down from shareholder in say-on-pay votes.
There’s no question what Congress intended when it passed a pair of laws requiring producers of sexually-explicit materials to keep records on the age of the people engaged in sex acts (or simulated sex acts): curb child pornography. Lawmakers had already banned commercial child porn, but producers hired actors who were of age but looked young, making it tough to enforce the ban. In frustration, Congress passed a 1988 law that imposed specific record-keeping demands on porn producers, who must verify that performers are of age, maintain records to back the verification, and provide the location of those records in labels affixed to the sexually-explicit products. The law said that producers must maintain age records at their “business premises,” and must make the records available for government inspection, or else face a stiff fine and a prison sentence. A 2006 amendment to the law set the same record-keeping, labeling, and inspection requirements when sex is only simulated (albeit with a carve-out demanded by non-porn movie studios).
Has there ever been a price-fixing case in which the alleged conspirators agreed to take less money for their product and simultaneously up their production and boost competition? The answer to that question may determine the success of the Justice Department‘s e-books antitrust suit against Apple and the two publishers that have not agreed to settle DOJ’s civil charges.