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Delaware Chancery Court Doesn't Meddle in Bear Stearns Deal (In Favor of New York Proceeding)

By broc

Delaware Chancery Court Doesn't Meddle in Bear Stearns Deal (In Favor of New York Proceeding)

From Travis Laster: On Wednesday, Vice Chancellor Parsons of the Delaware Court of Chancery stayed an action filed in Delaware to enjoin the Bear Stearns-JPMorgan Chase merger, deferring to a parallel action in New York. Here is VC Parsons' opinion.

The following quote says it all: "I have decided in the exercise of my discretion and for reasons of comity and the orderly and efficient administration of justice, not to entertain a second preliminary injunction motion on an expedited basis and thereby risk creating uncertainty in a delicate matter of great national importance." There are references throughout the opinion to the involvement of the Federal Reserve and the Treasury Department in the deal.

The opinion does not shed any meaningful light on how the Court would view the exceptional lock-ups that are part of the deal package. The opinion does say that "the claims asserted in the Complaint only require the application of well-settled principles of Delaware law to evaluate the deal protections in the merger and the alleged breaches of fiduciary duty" (14). The Court then described the factual situation as sui generis (16). The Court concluded that the involvement of the federal players rendered the situation rare and unlikely to repeat - and therefore not one in which Delaware had a paramount interest.

On April 29th, join DealLawyers.com for the webcast - "JPMorgan Chase/Bear Stearns: Splicing the Delaware Issues" - as Professors Elson, Davidoff and Cunningham analyze a host of novel provisions in the JPMorgan Chase/Bear Stearns merger agreement (as well as this - and any other - court opinion).

Proposed: California's Climate Change Disclosure

Lately, more and more investors are clamoring for the SEC to enhance its disclosure requirements related to climate change (eg. see this rulemaking petition). Keith Bishop notes: As you know, California has for several years imposed special disclosure requirements on publicly traded corporations (including corporations incorporated in other states that are qualified to transact business in California). Last month, a California legislator introduced a new bill that would require disclosure of climate risk and opportunities.

Specifically, this bill would require the California Secretary of State to develop a climate change disclosure standard for use by "listed companies" doing business in California. The standard would provide guidance on disclosure of climate change risks and opportunities and would, at a minimum, need to address six different factors (i.e. emissions, the company's position on climate change, significant action by the company to minimize risk and maximize opportunity associated with climate change, corporate governance actions, assessment of physical risks, and an analysis of regulatory risks).

As introduced, the bill specifically states that no listed company is required to meet the standard created by the Secretary of State. Thus, it is unclear what the legal impact of the standard would be. Another interesting aspect of the bill is the fact that it includes a legislative finding that cites a law firm "opinion." While technically not an opinion, I believe that the bill is referring to a study prepared by Freshfields for the United Nations Environment Programme Initiative.

Board Portal Developments

In this podcast, Joe Ruck, CEO of BoardVantage, explains how the board portal processes have changed to make them more effective, including:

- How many boards now use board portals?
- Have you been surprised in some ways that they are used?
- How are your offerings different than competing providers?
- How do you address the challenges of discoverability?
- What are the latest trends in the board portal space?
- Besides online access, what are the other benefits of a board portal?
- What is the role of portal technology in the area of corporate governance?

- Broc Romanek

Full post as published by The Corporate Counsel.net Blog on April 11, 2008 (boomark / email).