Source: https://www.deallawyers.com/blog/2012/08
Timestamp: 2019-04-24 22:05:44+00:00

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Keith Bishop gives us the news that the result of California Department of Corporations ‘s fairness hearing yesterday regarding Facebook’s purchase of Instagram was favorable for the social media giant.
The SEC’s Division of Corporation Finance recently granted no-action relief to Sonic Automotive, Inc., allowing Sonic to utilize “Day 20” pricing in its recent exchange offer wherein the company offered to exchange common stock and cash for its outstanding convertible debt securities.
The exchange offer employed a VWAP formula pricing mechanism with the final price becoming fixed and publicly announced at 4:30 p.m. on the same day the offer was scheduled to expire at midnight. In addition, the exchange offer incorporated a fixed minimum and maximum purchase price where the company agreed to extend the offer by two business days should the formula result in a purchase price at the maximum amount specified.
Interestingly, it appears that counsel sought and obtained no-action relief during the pendency of the exchange offer. Thus, it seems the 20-day pricing issue may have caught the Staff’s attention during its review. The letter serves as a steady reminder to issuers regarding the need for early consideration of whether to seek no-action relief and consulting with outside counsel before utilizing “Day 20” pricing in a tender offer. We have previously discussed the Staff’s position regarding “Day 20” pricing.
Yesterday, the Delaware Supreme Court affirmed Chancellor Strine’s decision from last year in Southern Peru. Justice Berger filed a brief partial dissent disagreeing with the Chancellor’s attorney’s fee analysis. Here’s analysis from Richards Layton (we are posting memos in our “Minority Shareholders” Practice Area) – and here’s a piece by Alison Frankel.
Although California’s General Corporation Law is frequently criticized as overly restrictive, it does have one virtue. It is rationally organized. Thus, it begins with a long series of defined terms, starting with “acknowledged” and ending with “written”. It even provides a definition of “short-form merger”. Cal. Corp. Code § 187.
In California, a short-form merger may either be “upstream” (a merger of the subsidiary into the parent) or “downstream” (a merger of the parent into the subsidiary). Cal. Corp. Code § 1110(a). A short-form merger is only possible if the parent owns at least 90% of the outstanding shares of each class of the subsidiary to be merged. If the parent owns less than all of the outstanding shares, then the board of directors of the subsidiary must also approve the merger. Cal. Corp. Code § 1110(b). In approving the merger, these directors remain subject to their fiduciary duties as directors.
The principal benefit associated with the short-form merger procedure is the lack of any requirement to obtain the approval of the outstanding shares (except in the case of a downstream merger pursuant to Section 1110(c)). However, California does require notice to shareholders when the subsidiary is a domestic corporation and not wholly-owned by the parent. In these cases, the parent corporation must give notice at least 20 days notice before the effective date to the subsidiary’s shareholders that the merger will become effective. Cal. Corp. Code § 1110(h). The notice must contain a copy of the resolution or plan of merger and information concerning dissenters’ rights. The alleged failure to give this notice has engendered litigation. Meadows v. Bicrodyne Corp., 573 F. Supp. 1030 (N.D. Cal. 1983) (finding that the corporation had discharged its obligation to provide notice).
Two Words To Add To Your Legal Vocabulary: You Ever “Argufy” Before The Delaware Supreme Court?
My Brothers note that not “a single applicable case” has been cited to the point “that judges performing forming like functions must receive the same salaries.” Here I cannot resist noting — for the amusement and possible enlightenment of readers in other States — that this is a peculiarly hearty old wheeze of Michigan trial courts (Michigan’s magniloquent own, so to speak). True, it is now hoary and shopworn. Yet it remains an occasional favorite of elder argufiers when they have no authority, and no reasoning of their own, with which to impress the wide-eyed attenders of periodic assizes.
Taylor v. Auditor General, 103 N.W.2d 769, 786 (Mich. 1960) (Black, J. Dissenting).
Another word that I sometimes run into is “amote,” which means to remove someone, such as a corporate director, from office. See In Re Burkin, 1 N.Y.2d 570, 572 (1956) (“At common law, stockholders have the traditional inherent power to remove a director for cause which is known as ‘amotion’.”) When I see “amote,” however, I think of love, not the unpleasant business of kicking someone out of office. I think of love because “amote” looks like the etymologically unrelated Latin phrase, “amo te”.
Robert Louis Stevenson makes a brief allusion to Dr. Fell in Chapter 2 of his book, Dr. Jeckyll and Mr. Hyde, and Hannibal Lecter uses the alias “Dr. Fell” in the 2001 film, Hannibal.
As noted in this Davis Polk memo, the U.S. Court of Appeals for the Seventh Circuit recently potentially expanded the extraterritorial reach of the U.S. antitrust laws. Its unanimous en banc decision in Minn-Chem, Inc. v. Agrium Inc. (7th Cir. 2012) may make it easier for the Department of Justice (“DOJ”), the Federal Trade Commission (“FTC”) and private litigants to challenge the conduct of foreign parties in foreign markets under the U.S. antitrust laws. The decision also creates and entrenches several circuit splits regarding the proper interpretation of the Foreign Trade Antitrust Improvements Act of 1982, and thereby increases the likelihood that the Supreme Court will elect to weigh in on these questions.

References: § 187
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