Corporate Accountability Report Index-Summary

DELAWARE

– Alternative entity statutes, review, BNA Insights, 1066
– Arbitration procedure for complex business disputes, 242
– Attorney-client privilege waiver, investment banker present for merger agreement (Del. Ch.), 622
– Attorneys' fees

– – Advancement to CEO, counterclaims and bylaws (Del. Ch.), 191
– – Amylin Pharmaceuticals, disabling continuing directors debt instrument provisions (Del. Ch.), 1292
– – Certification of reasonableness for advancement (Del. Ch.), 1318
– – Tender offer price increase, causation (Del.), 101

– Auditor liability, N.Y. in pari delicto protection in AIG fraud (Del.), 279
– Board seats, reduction in number, bylaws amendment (Del. Ch.), 195; amendment void (Del.), 430
– Books and records inspections

– – Arbitration requirement in contracts (Del Ch.), 574
– – Proper purpose lacking after derivative action filed (Del. Ch.), 653
– – Retained directors, vote to remove after rejected acquisition (Del.), 881

– Cancellation of stock issued for unsecured promissory note (Del. Ch.), 548
– Corporate governance laws, Dodd-Frank affects, 937
– Corporation law cases, first quarter 2010, 316; second quarter, 699; third quarter, 975
– Derivative litigation

– – Books and records inspections to establish demand futility (Del. Ch.), 574
– – BP Plc, suit for oil rig disaster (Del Ch.), 542
– – Countrywide Fin., no value after Bank of America merger settlement (Del.), 573
– – Insider trading suit can proceed (Del. Ch.), 305
– – Intercompany agreement, must plead both unfair dealing and price (Del. Ch.), 712
– – Smith & Wesson misstatements, presuit demand did not allow enough time to investigate (D. Mass.), 1197
– – Special litigation committee, equity incentive plan, independence issues (Del. Ch.), 326
– – Standing for “double derivative” action (Del.), 949
– – Standing of creditors to bring fiduciary breach suit against insolvent LLC (Del. Ch.), 1258
– – Standing, preferred shareholders (Del. Ch.), 653

– Disclosure, recapitalization resulting in dilution, class certification denied (Del. Ch.), 988
– Expedited discovery request, 3Com merger with Hewlett Packard (Del. Ch.), 43
– Fiduciary duty

– – Convertible promissory note is security subject to preferred stock contract (Del. Ch.), 625
– – Craigslist majority adopted poison pill, diluted minority (Del. Ch.), 986
– – Mergers and acquisitions

See Mergers and acquisitions, this heading

– – Modification, explicit LLC agreement wording required (Del. Ch.), 409
– – Poison pill adoption after large stock purchases (Del. Ch.), 882; appeal filed (Del.), 987

– General Corporation Law amendments, overview, 918
– Invalid stock split, written consent acts to elect directors (Del. Ch.), 1291
– Jurisdiction, validity of forum selection clause in shareholder agreement (Del. Ch.), 522
– Mergers and acquisitions

– – Airborne Health purchase of Squid Soap, failure to disclose litigation claim (Del. Ch. Ct.), 855
– – Bylaw amendment changing annual meeting date of target company allowed (Del. Ch.), 1135; reversed (Del.), 1289
– – Contract drafting issues and bad faith (Del. Ch.), 95
– – Cox Radio disclosure settlement (Del. Ch.), 550
– – Derivative litigation, Dow Chemical, demand futility (Del. Ch.), 97
– – Expedited discovery request, 3Com merger with Hewlett Packard (Del. Ch.), 43
– – Fiduciary duty

– – – Common shareholders lack payout (Del. Ch.), 794
– – – Controlling unitholder claims proceed (Del. Ch.), 1294
– – – Expedited proceedings request, tender offer (Del. Ch.), 380
– – – Stock redemption pursuant to contract just prior to sale of division (Del.), 373

– – Hanover Direct going private merger, price fair (Del. Ch.), 1259
– – Independence of self-dealing Barnes & Noble board in textbooks acquisition (Del. Ch.), 1191
– – Injunctions, Dollar Thrifty and Hertz, board reasonable (Del. Ch.), 989; reasonableness critical, documentation helps, 1134
– – Natl. City Corp. merger with PNC Fin. Serv., settlement (Del.), 497
– – N.Y. Bd. of Trade and ICE, good faith in procedures (Del. Ch.), 171
– – PLATO Learning, disclosure correction needed (Del. Ch.), 549
– – “Poison pill” plan, decision process (Del. Ch.), 241; oral argument set (Del.), 654; low trigger to protect net operating losses affirmed, 1086; BNA Insights, 1206
– – Post-closing damages remedy for tender offer (Del. Ch.), 597; unilateral two-step freeze-out, standard of review goes to high court, 711; interlocutory appeal denied (Del.), 737
– – QuadraMed merger, injunction sought by preferred shareholder (Del. Ch.), 327
– – Short form mergers

– – – Appraisal action remedy (U.S., rev den), 202
– – – Convertible notes issued, minority shareholders lose out (Del. Ch.), 497

– Presuit demand

– – AIG fiduciary breach, futility not shown (S.D.N.Y.), 350
– – Hansen Medical revenue recognition, futility not shown (N.D. Cal.), 824; amended complaint fails on same grounds, 1295
– – Self-dealing by Intrepid Potash, futility not shown (D. Colo.), 1350

– Proxy solicitation to approve stock option plan, claim direct, late (9th Cir.), 170
– Redemption not allowed by Thoughtworks preferred shareholders (Del. Ch.), 1293
– Standing by Adelphia to sue banks (S.D.N.Y.), 17
– Teppco merger settles derivative claims (Del. Ch.), 152

DERIVATIVE LITIGATION

– Adelphia Comm., attorneys' fee allocation (2d Cir.), 1173
– Auditor liability, N.Y. in pari delicto protection in AIG fraud (Del.), 279
– Books and records inspections

– – Minutes inspection in derivative suit limited (N.J. Super. Ct.), 951
– – Proper purpose lacking after action filed (Del. Ch.), 653

– BP Plc, suit for oil rig disaster (Del Ch.), 542
– Business judgment rule, application (2d Cir.), 11; Mass. rules on state law question (Mass.), 922
– Business strategy immunity application, BNA Insights, 893
– Del. corporation law cases, first quarter 2010, 316; second quarter, 699; third quarter, 975
– Dissolved corporation, derivative or direct action, waived for appeal (7th Cir.), 883
– Executive compensation

– – Clawback, indemnification provision in settlement violates Sarbanes-Oxley (2d Cir.), 1087
– – Hewlett-Packard CEO severance after false expense accounts (Cal. Super. Ct.), 920; SEC investigating CEO departure, 1381

– Fiduciary duty breach, Goldman Sachs Abacus deals (N.Y. Sup. Ct.), 432; court consolidates with other case, 923
– Foreign Corrupt Practices Act related cases, BNA Insights, 527
– Goldman Sachs

See BANKING

– Insider trading suit can proceed (Del. Ch.), 305
– Intercompany agreement, must plead both unfair dealing and price (Del. Ch.), 712
– Jury instruction flawed, disclosure of pending litigation in debenture deal not required (11th Cir.), 858
– Mergers and acquisitions

– – Countrywide Fin., no value after Bank of America settlement (Del.), 573
– – Dow Chemical, demand futility (Del. Ch.), 97

– Minority shareholder suit for fiduciary breach against majority shareholders, direct suit barred (Fla. Dist. Ct. App.), 45
– Presuit demand

– – AIG fiduciary breach, futility not shown (S.D.N.Y.), 350
– – Books and records inspections to establish futility (Del. Ch.), 574
– – Cephalon marketing practices oversight problem, no futility (3d Cir.), 1377
– – Medivation, shareholder making demand different from one filing short-swing suit (S.D.N.Y.), 1144
– – Morgan Stanley executive compensation suit, futility not shown (N.Y. Sup. Ct.), 1349
– – Proxy disclosure misstatement, futility not shown (U.S., rev den), 523
– – Revenue recognition at Hansen Medical, futility not shown (N.D. Cal.), 824; amended complaint fails on same grounds, 1295
– – Self-dealing by Intrepid Potash, futility not shown (D. Colo.), 1350
– – Smith & Wesson misstatements, demand did not allow enough time to investigate (D. Mass.), 1197

– Recapitalization of preferred stock, common stock dilution, business judgment rule (Cal. Super. Ct.), 275
– Special litigation committee, equity incentive plan, independence issues (Del. Ch.), 326
– Standing

– – Creditors right to bring fiduciary breach suit against insolvent LLC (Del. Ch.), 1258
– – “Double derivative” action (Del.), 949
– – Preferred shareholders (Del. Ch.), 653
– – Reverse stock split (9th Cir.), 952

– Statute of limitations, stock option backdating against Take-Two Interactive Software (S.D.N.Y.), 350
– Teppco merger settles derivative claims (Del. Ch.), 152
– U.K. law applies in bribe claim against BAE Systems (D.C. Cir.), 50
– Whistleblowers, class action settlement, SEC objects to CEO SOX indemnity provision (2d Cir.), 325

DIRECTOR ELECTIONS

– Attorneys' fees, disabling continuing directors debt instrument provisions (Del. Ch.), 1292
– Bank of America disclosure in Merrill Lynch merger, CalPERS opposes director re-election, 436
– Invalid stock split, written consent acts to elect directors (Del. Ch.), 1291
– Proxy access

– – Del. authority limited after Dodd-Frank, 937
– – IWG support, 5
– – MBCA amendments, ABA section report, 88; amendments adopted and proposed, 1012
– – Overplanning common, panel, 1282
– – Reform of shareholder rights, legislation, 264; risk-retention, SEC funding may delay support, 301; committee hearing, 402; business groups oppose corporate governance measures, 403; further action, see LEGISLATION, FEDERAL, S 3217
– – SEC proposal, standardized approach sought by institutional investors, 90; changes coming in 2010, Outlook, 106; officials provide update, 164; rule amendments finalized, 224; status update, 374; growth could be compromised by proposals, says Comm'r Paredes, 439; rules awaited, 847; first-in-time approach, likelihood, 848; rules adoption could be soon, 876; rule adopted, 906; comments center on shareholder eligibility requirements, 919; communication critical to avoid shareholder nominations, 939; investor relations key, webcast, 979; effective date and window period, 980; use limited due to high bar, panel, 1013; challenge filed, stay sought (D.C. Cir), 1050; shareholders ready to nominate, 1052; SEC agrees to stay, 1075; stay changes focus of 2011 proxy season, 1075; briefing schedule set, 1137; advisory firm role in comments, 1137; annual elections, hostile takeovers issue after stay, 1248; SEC rule adoption flawed, brief (D.C. Cir.), 1282; rules should not apply to registered investment companies, brief, 1349

– Stock ownership not proven, suit to exclude shareholder proposal (S.D. Tex.), 98; court allows exclusion from proxy, 243

DIRECTORS AND OFFICERS

– Attorneys' fees, advancement to CEO, counterclaims and bylaws (Del. Ch.), 191
– Board seats, reduction in number, bylaws amendment (Del. Ch.), 195; amendment void (Del.), 430
– Books and records inspection, retained directors, vote to remove after rejected acquisition (Del.), 881
– Business plans, big picture should be focus, not short-term value, 1312
– CEO position, more filled by directors, 1167
– Compensation

See EXECUTIVE COMPENSATION

– Credit crisis litigation, naming directors, increase, NERA study, 621
– Delaware corporation law

– – Amendments, overview, 918
– – Cases, second quarter 2010, 699

– Discovery of electronic data, board strategies to manage, Action Memo, 590
– Diversity requirements in Dodd-Frank, possible impacts, 982
– Education metric for directors, RiskMetrics, 214
– Fiduciary duty

See FIDUCIARY DUTY

– Financial restatements, tenure of CFOs and founder CEOs, report, 130
– FINRA Madoff ties, study approved, 880; highly paid employees compensation disclosure, 1081; internal investigation says no misconduct in pay, 1082
– Forum selection clause in shareholder agreement, validity (Del. Ch.), 522
– General counsel obligations, Action Memo, 1163
– Independence of self-dealing Barnes & Noble board in textbooks acquisition (Del. Ch.), 1191
– Interlock prevention, Action Memo, 400
– Internal investigations, board role, BNA Insights, 1265
– Liability insurance

– – Attorneys' fees advancement, policy language (5th Cir.), 292
– – Bankruptcy issues, BNA Insights, 503
– – Claims and notice, 140
– – Complaint allegations do not determine coverage (9th Cir.), 1290
– – Foreclosure document execution, claims (M.D. Fla.), 1317

– Liability, UBS, Swiss shareholders refuse to shield directors over losses, 410
– Litigation trends, study, 1191
– Outside directors, fiduciary duty to investigate red flags before disclosure, Action Memo, 371
– Performance evaluations and gender issues for directors, 1247
– Proxy access to nominate

See DIRECTOR ELECTIONS

– Recruiting and retaining directors, evaluations, proactive approach, 457
– Risk management, role in working with audit committee, 819
– Stock option backdating

See STOCK OPTION BACKDATING

– Succession planning for emergencies, 144
– Women underrepresented on boards, Calvert report, 1195

DISCLOSURE

– AIG

– – Counterparty payments, Geithner role, hearing, 94
– – Subprime risk, material misstatements (S.D.N.Y.), 1089

– Bank of America merger with Merrill Lynch

– – Director re-election, CalPERS opposes, 436
– – Preemption issues in N.Y. suit, BNA Insights, 687
– – SEC suit alleges proxy violations (N.Y. Sup. Ct.), 39; N.Y. AG charges bank and former executives with disclosure violations, 142; SEC settles proxy disclosure charges (S.D.N.Y.), 143; judge asks N.Y. AG for witness transcripts, 168; settlement approved, 193; correction, 224; proposed settlement rejection, SEC enforcement developments, BNA Insights, 355; IG Kotz investigating $33M settlement rejected by court, 569; former CEO Lewis denies allegations (N.Y. Super. Ct.), 921

– Citigroup, executives, settle subprime mortgage misrepresentation claims (D.D.C.), 823; judge seeks more information, 883; SEC says firm negligent, not willful, 987; error was unintentional, Citigroup urges acceptance, 1024; court approves settlement, 1143
– Clawback provision in protective order (D. Kan.), 796
– Climate change risk

– – SEC guidance, 89; Bachus (R-Ala) questions decision, 118; Action Memo, 184; effect of guidance, 218; development of regulations, materiality, BNA Insights, 225; effect of guidance, panel, 464
– – Sustainability and energy use issues, Action Memo, 428

– Coal-ash risk management, shareholder resolutions, 245; MDU Resources vote, 465
– Conflict minerals mining, application, 1286; SEC rules coming, 1347
– Credit rating agencies, Regulation FD exemption gone, 941
– Credit ratings, SEC interpretations updated, 823
– Deepwater drilling risk by energy and insurance companies, coalition letter, 852
– Deferred and non-prosecution SEC agreements, effects, BNA Insights, 801
– Derivative litigation, misstatement, presuit demand futility not shown (U.S., rev den), 523
– EU companies, reporting issues, 1059
– Executive compensation

– – Amendments to incomplete filings may be required, 564
– – Analysis issues, 1344
– – Risk management

– – – Assessment, first efforts, 648
– – – Design and review process needed, BNA Insights, 476
– – – Survey, 877

– – Wall Street reform law provisions, BNA Insights, 1036; executive compensation assessment plan should be developed, Action Memo, 1131

– Fair value, FASB standard, 104; moved to financial instruments project, 204; Level 3, “sensitivity analysis disclosure,” proposal, 335; first quarter disclosure due, 414; uncertainty analysis, comments say too onerous, 1093
– False and misleading statements by Rigel Pharmaceuticals (N.D. Cal.), 49
– FOIA, handwritten notes disclosure (D.D.C.), 854
– France, proxy solicitation disclosure ordinance, 1375
– Galleon Mgmt. insider trading case, DOJ inadvertently gives wiretap evidence to SEC (S.D.N.Y.), 124; timing of criminal and civil trials, 170; wiretap evidence order stayed (2d Cir.), 172; SEC urges no stay, 202; defendants respond, 221; case shows DOJ and SEC insider trading trends, 300; stay ordered pending appeal (2d Cir.), 328; judge wants more information on proposed Schottenfeld settlement (S.D.N.Y.), 348; amicus filings, 467; Schottenfeld settlement approved, 469; suppression of wiretap evidence sought, 499; leaks of confidential information under investigation, 543; fairness requires disclosure to both sides, says SEC (2d Cir.), 546; oral argument set, 598; extension granted to DOJ for opposition to motion (S.D.N.Y.), 656; DOJ says wiretaps appropriate (S.D.N.Y.) and SEC tries to prevent amicus filing (2d Cir.), 718; DOJ omissions from affidavit, hearing set (S.D.N.Y.), 885; remand for balancing test of need and privacy (2d Cir.), 1090; defendant claims DOJ should have disclosed SEC investigation (S.D.N.Y.), 1142; Goel settles, 1230; separate trials for Rajaratnam and Chiesi allowed, 1299; SEC renews request for wiretap evidence, 1382
– Goldman Sachs

– – Class action alleges false statements in Abacus deals (S.D.N.Y.), 432
– – Criminal investigation of Abacus, House urges AG to open, 431; Goldman to cooperate with information requests, 460
– – Derivative litigation alleges fiduciary breach in Abacus deals (N.Y. Sup. Ct.), 432; court consolidates with other case, 923
– – SEC charges disclosure failures in Abacus fund (S.D.N.Y.), 404; earlier Wells notice not disclosed, 433; answer deadline extended, 656; charges show agency more aggressive, 660; court approves settlement, 767; IG Kotz will investigate settlement motivation, 794; SEC grants permanent exemption to ICA provision, 921; VP seeks dismissal based on Morrison ruling, 1090; IG reports no link to Dodd-Frank bill timing, 1112; SEC brief says case not inconsistent with Morrison ruling, 1142; SEC to replead due to Morrison ruling, 1197; bank agrees to fine for failure to disclose Wells Notices, 1229

– Goodman Global Group, reporting obligations suspended (SEC No-Action Letter), 1377
– IAC/InteractiveCorp., disclosure omissions (S.D.N.Y.), 332
– Internal controls, material weakness identification and disclosure, 26
– Internet and social media, issues involved with use, 1286
– Jury instruction flawed, disclosure of pending litigation in debenture deal not required (11th Cir.), 858
– Lehman Brothers case shows guidance may be needed, 552
– Loss contingencies

– – FASB proposal coming, 353; comments sought, 773; comment period extended, 887; comments say flaws are serious, 994; attorney-client privilege issues, says ABA, 1054; vote to delay, 1177; project not dropped, 1260; SEC expects disclosure compliance, 1261
– – Scrutiny from SEC increasing, 443

– Management Discussion and Analysis

– – Deficiencies, 165
– – Plain English, analysis needed, 1312
– – SEC guidance considerations, BNA Insights, 1152

– Matrixx Initiatives, rare Zicam adverse reaction, fraud claim (U.S., rev grant), 623; statistically insignificant adverse events as basis for claim, amicus briefs, 954; NASAA, AARP support investors in amicus briefs, 1256
– Mergers and acquisitions

– – Business strategy immunity application, BNA Insights, 893
– – Cadbury board urging refusal of Kraft purchase offer, jurisdiction (D.N.J.), 126
– – Cox Radio settlement (Del. Ch.), 550
– – Discussions of possible merger in redemption by minority shareholder (5th Cir.), 248
– – Failed merger, duty lacking, no scienter (2d Cir.), 954
– – Finder fee, director fails to disclose, board ratifies (S.D.N.Y.), 1166
– – Personal benefit to executive in merger not disclosed (S.D. Iowa), 252
– – PLATO Learning, correction needed, injunction (Del. Ch.), 549

– Mortgages

– – Documentation, SEC sends “Dear CFO” letters, 1189
– – Loss contingencies, PCAOB staff alert, 1385

– Multidisciplinary approach to narrative of accounting issues, BNA Insights, 416
– Natural gas, hydraulic fracturing risk, shareholder request, 93
– New Century Fin., loan info lacking, settlement (C.D. Cal.), 927
– Off-balance sheet activities, lawmakers want disclosure, 891; SEC considers guidance on short-term borrowings, 982; SEC to propose disclosure rules, 1015
– Office Depot settles selective disclosures charges (S.D. Fla.), 1176
– Oil and gas extraction, estimation and disclosure, FASB guidance, 52
– Omission-based liability, duty to speak, BNA Insights, 581
– Outside directors, duty to investigate red flags before disclosure, Action Memo, 371
– Placement agents, CalPERS, 126
– Political activity

See LEGISLATION, FEDERAL, HR 4749

– Political contributions

– – New federal rules possible, 116; correction, 155; legislative response to Citizens United possible, 265; bills, see LEGISLATION, FEDERAL, HR 4790, HR 5823
– – N.Y. legislation introduced, 407
– – Proxy votes increasing, report, 709

– Proxies, new SEC rules, GAO report, 39; compliance with rules, Analysis and Perspective, 76; director qualifications and diversity, 118; risk assessment and policies after rule, Action Memo, 162; advice on proxy and risk disclosures, 188; SEC technical corrections, 224; analysis, data management increase disclosure effectiveness, Action Memo, 238; e-proxies should increase investor participation, 297; status update, 374; proactive approach recommended, 457; too early to assess compliance, says SEC's Parratt, 544; policy review and benchmarking needed, Action Memo, 909
– Ratings of asset-backed securities omitted (SEC No-Action Letter), 1315
– Recapitalization resulting in dilution, class certification denied (Del. Ch.), 988
– Receivables, new FASB rule, 799
– Regulation FD guidance coming, 186; issued, 648
– Regulation S-K, guidance, 168; revision, 224; interpretations, 268; updated guidance issued, 648
– Repurchase agreements, SEC seeks information about use by financial and insurance firms, 334
– Resource extraction companies, payments to foreign and U.S. governments, 762
– Revenue, FASB-IASB convergence, 74
– SEC

– – Confidentiality request handling, Corp. Fin. Div., IG report, 1083
– – Enforcement actions, many based on financial disclosure, says SEC's Scheck, 472

– Stock option backdating by Goldman Sachs, no artful pleading, remand to state (E.D.N.Y.), 885
– Subsequent events disclosure, comments on FASB amendments sought, 25
– Tax rates, foreign operation effects, 1315
– Troubled debt restructuring, delay in footnote reporting, 1306
– Twitter use, compliance issues, 1108
– Uncertain tax positions, IRS guidance, 1096
– USPS metrics, Authentidate Holding class action (2d Cir.), 306
– Water risks, inclusion in filings, Ceres report, 166
– Wells notice not automatic trigger, 433
– Whistleblowers, access to

See LEGISLATION, FEDERAL, S 3217

DISCOVERY

– BankAtlantic, misleading statements about portfolio risk, transcripts discovery (S.D. Fla.), 992
– Business strategy immunity application, BNA Insights, 893
– Clawback provision in protective order (D. Kan.), 796
– Confidentiality of SEC records for regulatory and oversight reasons questioned, 786; hearing set, 818; application of provision is prospective (SEC), 819; legislation to remove exemption introduced, 850; Issa (R-Calif) letter challenges Schapiro on confidentiality necessity, 878; guidance issued, 979; bills, see LEGISLATION, FEDERAL, HR 5948, HR 5970, HR 6086, S 3717
– Data collection policies and practices important, 406
– Electronic data

– – Board strategies to manage, Action Memo, 590
– – FCPA cases, issues, BNA Insights, 1390
– – Litigation burden, 294
– – Preparation needed, 122

– Expedited request, 3Com merger with Hewlett Packard (Del. Ch.), 43
– Fifth Amendment collective entity doctrine, former employee must produce documents, no privilege (Md.), 1227
– Guidelines issued by DOJ, 33
– Internal accounting documents to support loss causation (S.D. Tex.), 381
– Price-fixing by Micron Tech., DOJ antitrust data (D.D.C.), 150
– Protective orders in fraud scheme, SEC violation (10th Cir.), 329
– Reinsurance payment treatment, SEC fines Assurant for noncompliance (S.D.N.Y.), 127
– Stay under PSLRA, requirements to lift (W.D. Ohio), 19
– Subpoena, SEC authority delegation, final rule, 852
– Work product, notes from CTO inventory meetings (N.D. Cal.), 67

DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT

See WALL STREET REFORM AND CONSUMER PROTECTION ACT

DOUBLE JEOPARDY

– Enron Broadband executive, colorability necessary (5th Cir.), 466; claims not colorable (U.S., rev den), 1199

DRUGS

See HEALTH CARE