Corporate Governance Primer: Authority of the Board
As the ultimate repository of management authority, the board of directors is spared the often laborious process by which matters are presented to it for its determination. By necessity boards must, and are entitled to, rely on corporate officers and advisers to select, refine, and present crisply for resolution the issues that come before it. The cost of such efficiency is the risk that board meetings become formulaic, board action becomes automatous, and board members fail to learn the alternatives, procedural or substantive, that might be available. This article is intended as a corporate governance primer, identifying the toggles, levers, and switches the board can set, pull, push, in the cab of the corporate crane.
The Latest from the SEC: An Analysis
On October 15, 2003, David Lynn, Chief Counsel of the Division of Corporation Finance for the U.S. Securities and Exchange Commission(SEC), discussed recent rulings in a conference call sponsored by Glasser Legal Works. The call was moderated by Brian Lane, Gibson, Dunn & Crutcher LLP; David Martin, Covington & Burling; and Meredith Cross, Wilmer, Cutler & Pickering. Each of the moderators had formerly been in a significant position with the SEC's Division of Corporation Finance. Mr. Lynn disclaimed any relationship between his views and those of the SEC or any member of the SEC staff.
The Incredible Shrinking Privilege
Considering the role of prosecutorial discretion and the draconian consequences of a corporate conviction, corporations often have little choice but to plead guilty and cooperate with the government. Recently, the feds have raised the ante in this process by defining "cooperation" to include waiving the attorney-client privilege. Thus, corporations and counsel alike are forced into a Hobson's choice where at least partial waiver may be inevitable. Waiver law in the majority of circuits is stark - disclosure to the government is waiver as to third parties, at least as to the material disclosed. Therefore, the civil plaintiff that inevitably follows the government's investigative path finds fertile fodder in otherwise privileged, confidential, and often sensitive corporate documents that, but for the government's disclosure requirement, would be protected by privilege.
Viewpoint: Class Actions, Reform, and the Impact on Franchisors
Since the 1960s, consumer advocates have used the tool of the class action to shepherd and win redress for those who have relatively small claims, but don't have the practical means to pursue their own individual lawsuits. The honorable intention is to notify and help vulnerable or unsophisticated plaintiffs who may not even realize they have been swindled. Class actions have won significant refunds for HMO customers, credit card and utility customers, and, of course, aided victims negligently exposed to toxic substances.
Structuring a Refranchising Program
There are several things that a franchisor can do in structuring its refranchising program to reduce the likelihood of disputes and litigation. This article discusses the presale market identification and internal due diligence and initial marketing process that culminates in the execution of a letter of intent ("LOI").
Lender Liability and Its Application to Franchising
Lender liability law states that lenders must treat their borrowers fairly and, when they don't, they can be subject to borrower litigation under a variety of legal actions. Franchise relationships have seen their own share of lender liability claims. Franchisees must borrow to acquire assets, franchise agreements, and leasehold interests relating to franchise operations. Thus, franchisees, like all business borrowers, must be aware of their legal rights and legal issues that may arise during the lending relationship.
News Briefs
Highlights of the latest franchising news from across the country.
Court Watch
Highlights of the latest franchising cases from across the country.
Strategies to Enhance Cash Flow
Managing partners, financial partners, members of executive committees and administrators must devote more of their time today than in the past, to planning and managing their firms' finances and those functions that improve the cash flow. This article describes six aspects of law firm management and economics that the author has recommended to managing partners, financial partners, members of management committees and law firm administrators to assist them improve their firm's cash flow. These factors include: 1) cash flow; 2) a business plan; 3) budgets for revenues, expenses and client advances; 4) partner compensation; 5) a recommended new business and billing committee; and 6) partners' capital and borrowing.
