The Increasing Importance of Corporate Minutes
August 30, 2005
As corporate scandals continue to dominate the financial press, the actions taken by members of corporate boards of directors are under attack by the civil class action bar, the Securities and Exchange Commission, federal prosecutors, and state regulators. As the activities of board members are increasingly subjected to challenge in civil and even criminal proceedings, the existence of a clear record of the board's activities has become an increasingly critical element in establishing a corporation's decision-making process. Thus, boards of directors should take a fresh look at how their decision-making process is described in corporate minutes to ensure that the minutes will permit the directors to defend the actions taken in the boardroom, as well as to demonstrate that the directors have performed their oversight duties with appropriate care.
Hotline
August 30, 2005
Evidence of Post-Accident Repairs PermittedThe Third Circuit has ruled that under Federal Rule of Evidence 407, a plaintiff who sues only the manufacturer…
Juror Dismissal During Deliberations
August 30, 2005
You've endured the roller coaster of a white-collar trial and hold out hope that protracted jury deliberations may presage an acquittal. But then the trial judge dismisses, for refusal to deliberate, a juror who may favor your client, installs an alternate and directs that deliberations begin anew. A guilty verdict and prison sentence ensue. It can happen; it did recently. In this age of protracted financial fraud and public corruption trials, it raises interesting cautionary issues for the white-collar defense lawyer.
The Rebirth of Advocacy
August 30, 2005
On Jan. 12, 2005, the Supreme Court in <i>United States v. Booker</i> ended months of speculation as to what was to become of the Federal Sentencing Guidelines after the Court's June 2004 decision in <i>Blakely v. Washington</i>, and held that the guidelines were unconstitutional. To remedy the unconstitutionality, the Court excised portions of the Sentencing Reform Act that required the sentencing judge to sentence within the guidelines range and that set the standard of appellate review of sentences.
Swinging for the Fences
August 30, 2005
On July 27, 2005, a Seattle federal judge sentenced the so-called "Millennium Bomber," who was convicted of conspiring to bomb Los Angeles International Airport during the 2000 New Year's holiday season (and who cooperated with the government for a period of time and then stopped), to 22 years in prison. The government had sought a 35-year sentence for the 38-year-old defendant.
Collecting D&O Insurance Proceeds
August 30, 2005
In the race between a debtor and a third party to recover the proceeds of a directors' and officers' insurance policy (a "D&O Policy"), it is critical that the debtor employ the correct strategy for the applicable jurisdiction in order to enjoin its competitor from reaching the proceeds first. Choosing the wrong strategy could mean the difference between collecting tens of millions of dollars and obtaining a judgment not worth the paper upon which it is written. Indeed, the proceeds of the D&O Policy ("D&O Proceeds") may be the largest asset of the estate. As a result, a successful reorganization could depend upon filing in the right jurisdiction and implementing the correct litigation strategy.
Ninth Circuit Ruling on Preference Avoidance Power
August 30, 2005
Last month, we discussed <i>Sherwood Partners, Inc., Assignee for the Benefit of Creditors of International Thinklink Corporation v. Lycos, Inc.</i>, 394 Fed11198 (9th Cir. 2005). In that case, the Ninth Circuit Court of Appeals, by a divided court, held that a state statute authorizing an assignee for the benefit of creditors to void a preferential transfer is preempted by the federal Bankruptcy Code. This month, we discuss the ruling in depth.
