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April 1, 2020Patrick Muldoon

Remaining or Going Private: Traditional and New Rationales

The going private transaction has been popular in the past and will likely continue in popularity, given the number of startup “exits.” In the alternative, companies could continue to remain private, as venture capital funding and mega-rounds give companies a way to operate privately and their founders to retain control. Traditional rationales were centered around public speculation and filing or disclosure requirements. I suggest that new rationales include control by founder/CEOs, although it is hard to be sure. In the future, there could be new trends, less founder-centric companies, and more rationales for remaining, or going, private.

April 1, 2020Joseph T. McClure

A New Trend in Securities Fraud: Punishing People Who Do Bad Things

This article seeks to articulate a distinct view of federal securities law as it is increasingly used in non-traditional enforcement actions commenced to punish corporate bad behavior. This paper argues that these non-traditional enforcement mechanisms should be viewed with skepticism. This skepticism should not be misinterpreted as cynicism, as the author believes that these non-traditional enforcement actions are beneficial vehicles to accomplish the admirable governmental objective of “punishing people who do bad things.” However, the author recognizes that such use of securities law does not fall into a category of clearly defined criminal law and carries a significant risk of abuse. The author also recognizes the “admirable governmental objective” may be thwarted when it comes to private companies. Finally, the author is uneasy with the societal values conveyed when the government sanctions corporate misbehavior in the name of protecting shareholders from deception.

April 1, 2020Sharrissa Stratton

Liability of Parent Corporation -- Whether the parent is liable for the actions of its subsidiary when the parent does not perpetrate fraud

In R&M Mixed Beverage Consultants, Inc. v Safe Harbor Benefits, Inc. 578 S.W.3d 218 (Tex.App. - El Paso 2019, no pet.), the Court of Appeals cites the Texas Supreme Court for the proposition that there must be evidence that one of the corporations was using the other for purpose of perpetrating actual fraud for the defendant's direct personal benefit. The Court found that the record showed no evidence of actual fraud and therefore the parent would not be liable for the subsidiary's action.

November 8, 2024Ekaterina G. Long

Ponzi Scheme Civil Litigation: Avenues of Relief and Defenses

This article considers aspects of federal civil litigation and bankruptcy proceedings that ensue as a Ponzi scheme is unraveled. Financial institutions that find themselves involved with Ponzi scheme operators are often sued as defendants because they may be the only actors with assets to go after. The likely claims and defenses and the relevant case law are discussed.

November 12, 2023Ladd A. Hirsch, Patrick D. Keating

What Business Trial Lawyers Think Transactional Lawyers Should Know

This document is an Appendix provided to attendees of a continuing legal education presentation by Ladd Hirsch and Patrick Keating on November 3, 2023. The examples of contract provisions provided below are provided to illustrate how various optional provisions discussed during the presentation might be written in a contract. These example provisions are not appropriate for every contract. An attorney should carefully consider this issue and tailor each provision to the needs of the contract at issue.

November 18, 2016John W. Ellis, Kennon L. Wooten

Recent Developments In Texas Spoliation Law

The article examines the standards in Brookshire Brothers and recent developments in Texas spoliation law post-Brookshire Brothers, including the recent recommendation of the standing State Bar of Texas Court Rules Committee to adopt a new procedural rule governing a party’s claim of spoliation. The article begins with a brief summary of the historical application of spoliation allegations in Texas jurisprudence. Next, the article focuses on analytical framework for spoliation set forth in Brookshire Brothers. The article then examines how Texas courts have applied the current spoliation framework in recent decisions. Finally, the article examines the newly proposed procedural rule.

March 15, 2013John K. Boyce, Iii

An Overview of the Arbitration of Employee Disputes In Texas

Arbitration is here to stay. Driven by what parties perceive as deficiencies of the formal judicial system, including expense, protracted length, gamesmanship, belligerency and wastefulness, arbitration has grown exponentially in the last ten years. Because of its confidentiality, empirical statistics are difficult to come by. Nonetheless, the American Arbitration Association, probably the largest administrator in the world, notes a 46% increase in total case filings 2007 to 2012 — i.e., from 127,729 to 187,596 cases per year (including commercial, employment, labor, construction and nofault issues). The Financial Industry Regulatory Authority (“FINRA”), where arbitration is mandated in agreements with securities brokers, notes an average caseload of 6,822 case per year. See www.finra.org/ArbitrationandMediation/FINRADisput eResolution/AdditionalResources/Statistics/index.html. Courts and legislatures, both federal and state, continue to sanction this trend. Given the $200 to $300 billion annual cost of civil litigation, arbitration’s dramatic increase must be viewed as a seismic shift in the notions of justice in this America. Formal studies also confirm general public acceptance of the process. See, e.g., Business-to-Business Arbitration in the United States: Perceptions of Corporate Counsel, Rand Institute for Civil Justice (2011), www.rand.org/content/dam/rand/pubs/technical_report s/2011/RAND_TR781.pdf; Dispute-Wise Management: Improving Economic and Non-Economic Outcomes in Managing Business Conflicts American Arbitration Association (2003)

May 11, 2012Richard E. Brophy Jr., Jennifer Campbell Lindsey

Analyzing the Puchase and Sales Agreement

The purpose of this article is to address select components of Purchase and Sale Agreements and related issues in the negotiation of Purchase and Sale Agreements in the context of private acquisitions of the stock or assets of private companies. This article begins by describing potential pitfalls associated with entering into what the parties to a future Purchase and Sale Agreement believe is a nonbinding letter of intent. A typical Purchase and Sale Agreement would address the following general components: (1) deal points, (2) closing and closing deliverables, (3) representations and warranties of buyer and seller, ( 4) pre-closing covenants, (5) post-closing covenants, (6) conditions to closing, (7) termination provisions, (8) indemnities, and (9) miscellaneous prov1s10ns including venue, governing law, expenses, notices, damages and dispute resolution provisions. As time does not permit a discussion of each of these components, this article and the presentation for which it is written will focus on key provisions that are customarily the subject of significant negotiation between the parties. The article includes examples of these provisions setting forth alternate provisions favoring buyers and sellers, where appropriate. The reader is cautioned that the sample provisions provided are included to serve as examples of hypothetical provisions. Careful attention should be paid to the drafting of any provision to be included in a specific transaction contemplated by the reader.

March 7, 2018ronc

Judge Rules that Cryptocurrencies Can Be Regulated as Commodities

Jack B. Weinstein, Senior United States District Judge so ruled in an order from the court. Commodities Futures Trade Commission v. McDonnell, (E.D.N.Y., March 6, 2018).

December 31, 1969Newsletter Committee

Section Newsletter Summer 2015

This issue includes articles on "Trap for Nonprofit Corporations: Using Single Member LLCs" by Darren Moore and Frank Sommerville; "Form of Nonprofit Corporation Governing Documents Available to Members" by Elizabeth Miller and Frank Sommerville; "Delaware Judge Fines Dole Food Executives $148 Million for Merger Fraud" by Byron Egan; and "Common Qualifications to a Remedies Opinion in U.S. Commercial Loan Transactions" by Gail Merel and Steve Tarry.

December 31, 1969Newsletter Committee

Section Newsletter Summer 2015