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Shadow Directors and Controlling Shareholders: Duties and Liability
The meltdown and the consequent disappointments have produced a wave (actual and threatened) of litigation, alleging the VCs, through the board seats of their appointees, were in “control” of failed companies (dot-coms and others), and therefore obligated to exercise “fiduciary” care over the fortunes of minority shareholders. And, the deep-pocketed VCs have, of course, been taking evasive action. Their time-honored gambits are, first, to eschew a board seat and substitute instead “observer” or “visitation” rights – the right to sit in attendance at all board meetings and speak one's piece ' but not vote. Given the muscle the VCs enjoy, by keeping their hand on the money spigot, this usually amounts to the same thing as a board seat. This is a practice known in the UK as “shadow directors.” I am informed by my UK compadres that liability can attach as if the individual VC was, de jure as well as de facto, sitting on the board.
One step further removed is the assertion of rights through negative covenants. This takes advantage of the well-recognized doctrine in US law that a shareholder may behave in any way he or she sees fit in exercising shareholders rights, in contrast to one's obligation as a director to respect and further the interests of all the shareholders.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Beach Boys Songs Written Decades Ago Triggered Current Quarrel With Lawyers
There's current litigation in the ongoing Beach Boys litigation saga. A lawsuit filed in 2019 against Nevada residents Mike Love and his wife Jacquelyne in the U.S. District Court for the District of Nevada that alleges inaccurate payment by the Loves under the retainer agreement and seeks $84.5 million in damages.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
When Is a Repair Structural or Nonstructural Under a Commercial Lease?
A common question that commercial landlords and tenants face is which of them is responsible for a repair to the subject premises. These disputes often center on whether the repair is "structural" or "nonstructural."