Legal Commentary

Valuation, M&A and Escrows

Posted on May 07, 2009
I learned an interesting point at the Due Diligence Symposium organized by America's Corporate Growth yesterday. It is far better that aggressive reporting of revenues on the part of the company being acquired be discovered by the acquirer before the...

Birds Colliding with Airplanes

Posted on January 18, 2009
The heroic efforts of Capital Chesley Sullenberger--whose skill in landing US Airways Flight 1549 in the Hudson River--are unprecedented. However, birds colliding with airplanes is not uncommon. The following is an excerpt from The Power of Incremental Advantage: How Incremental...

The Pros and Cons of Receiving Funding from Strategic Investors

Posted on December 31, 2008
Entrepreneurs often seek funding from the venture capital arms of large companies. Receiving funding from the likes of Intel Capital or Comcast Interactive Capital does have its advantages. First, in today?s credit drought, capital from any source can be critical...

Newest Sign of Corporate Distress: Selling Customer Contracts

Posted on December 31, 2008
In an attempt to squeeze some cash out of their assets, a few distressed companies are putting their customer contracts on the selling block. Warren Haber, Managing Director at Crossbar Capital said, ?With capital for traditional corporate financing extremely scarce,...

To access blog feed reader register for free. (You will also learn about new ways to read and access the freshest law blogs.)

The Perils of Entering into Negotiations

Posted on December 31, 2008
?There is no harm in entering into a dialog,? is a common refrain in the Board Room. So too is, ?We have nothing to loose by negotiating. If we don?t like the deal, we can always walk away later.? Far...

Best Practices for Hiring Executives

Posted on December 31, 2008
It was just a few short years ago that I couldn?t find qualified candidates for a variety of open positions that we had for our research, advisory and training company based in Princeton, New Jersey (USA). Now, recruiters are calling...

Leadership Can't Be Measured by Applause

Posted on December 31, 2008
In May, I spoke before the Ohio Chapter of the Project Management Institute. One of my comments evoked a lively debate with the attendees on one side and myself on the other. I was talking about the importance of confidence...

Definition of Market Share

Posted on November 04, 2008
Jack Welch, former CEO of General Electric, became famous for demanding that each of GE's business units become the number one or number two players in their industries. If the division managers could not capture the first or second market...

Residuals Clauses in Mergers & Acquisitions

Posted on November 04, 2008
There is an interesting clause that can be used in mergers and acquisitions. This is the residuals clause which basically says the buyer is not responsible for information that it retains in the heads of its newly-acquired employees after returning...

Isn't Our Security Worth $1 a Day?

Posted on October 28, 2008
I lost my business when The World Trade Center was demolished in the attacks on September 11, 2001. I was lucky, I could have lost my life. Those who did lose their lives had to be identified by having their...

Olympians are Separated by Incremental Advantages

Posted on August 17, 2008
Over the past few days, we have witnessed Olympic medalists beating out their rivals by the narrowest of margins. For instance, Michael Phelps tied Mark Spitz's record of winning seven Gold medals in an Olympic competition (which Phelps now surpassed...

Incremental Advantages are Crucial in Sports

Posted on July 06, 2008
There was a very interesting article in the recent issue of Fast Company entitled Innovation of Olympic Proportions. This article discussed how clothing and equipment manufacturers are innovating to give Olympic athletes critical, although seemingly marginal, advantages in their competitions...

Disproportionality in Publishing

Posted on July 06, 2008
I just finished reading The Years of Extermination: Nazi Germany and the Jews 1939-1945 by Saul Friedlander. This 663-page book documented many aspects of the Nazi's plan to eliminate Jews from the map of Europe. This thoroughly researched book was...

Ghandi Was Far From Perfect

Posted on July 06, 2008
I recently learned that 1.5 million people were killed during the hostilities that erupted when Pakistan broke away from India. A further 7 to 8 million people abandoned their homes in what became the largest exodus in history. This violence...

Material Adverse Effect

Posted on June 19, 2008
There was an interesting article in The Wall Street Journal today about Apollo Management and Hexion Specialty Chemicals suing Huntsman Corp., which threatened to derail a large buyout of the latter company. Hexion argued that Huntsman's deteriorating financial performance constituted...

Intellectual Property Blog and Social Networking Site

Posted on June 01, 2008
When I was in Israel in March, I had the opportunity to listen to Mr. Zeev Fisher of Appelfeld Zer Fisher discuss Intellectual Property strategies for Emerging Israeli companies. After doing a little digging, I soon realized that Appelfeld Zer...

The Hitler Salute

Posted on June 01, 2008
I recently read the Hitler Salute: On The Meaning of a Gesture by Tilman Allert. This book explained the compulsory nature, pervasiveness and significance of the Hitler salute. As Professor Allert writes, "With the Hitler salute, the regime intruded into...

Djibouti and Eritrea Set Off Tinderbox

Posted on May 25, 2008
According to a story in The New York Times today, two small African nations - Djibouti and Eritrea - are staged to battle along a disputed border. The opposing forces are within feet or inches of one another. Within the...

Intellectual Property Judges

Posted on May 12, 2008
There was an interesting article in BusinessWeek dealing with patent judges. The article said that 40 of the 61 patent appeals judges could have been appointed unconstitutionally. At issue is a 1999 law that lets the PTO director name such...

Protecting Innovation

Posted on May 12, 2008
There was an interesting article in The Wall Street Journal today dealing with the steps Apple undertook to protect its iPod. For instance, the article pointed out that trademark law allows the holder to sue not only manufacturers but also...

Competitive Intelligence Using Patent Analysis

Posted on May 05, 2008
Do you want to unveil your competitors? plans for product development and market entry? Your competitors inadvertently make much of their strategic plans available to the public when they file for patent protection. A careful analysis of patent filings can...

Accounting for Earn-Outs

Posted on April 28, 2008
There was an interesting article in The Wall Street Journal today about earn-outs. This article pointed out that the payments disbursed under earn-outs are not treated as compensation expense, which is subtracted from earnings. Instead, these payments appear as contingent...

Broken Deals

Posted on April 18, 2008
According to Thompson Financial, some $55 billion worth of acquisitions of public companies by private-equity buyers have fallen through since the start of the 2007 credit crunch (up until April 2008). Conducting with broken deals is an issue that is...

Is Microsoft a Generous Acquiror?

Posted on February 18, 2008
Microsoft has a long history of paying very high premiums for companies it wishes to acquire. According to Dealogic, Microsoft's average one-day premium for companies it acquired since 2000 was 43% compared an average premium for technology acquisitions of 25%...

Every Last Vote Counted in the Presidential Primaries of 1960

Posted on February 18, 2008
Neither Hillary Clinton nor Barack Obama is likely to secure the 2,025 delegates needed to win the Democratic nomination before the voting season ends. Currently Mrs. Clinton is said to have 256 superdelegates versus Mr. Obama's 170. The New York...

The Secret of Einstein's Fame

Posted on February 16, 2008
Albert Einstein achieved rock star fame during his lifetime. Even today, Einstein is by far the most well-known physicist. The Baby Einstein Company was acquired for $150 million by Disney. Hebrew University in Jerusalem earns tremendous royalties just by licensing...

Trends in Research & Development Investments

Posted on February 14, 2008
According to recent research published by Battelle Memorial Institute, total spending on US R&D is projected to rise about 3% to $367 billion in 2008 from $355 billion in 2007. After accounting for inflation, the growth rate would be about...

Democratic Presidential Candidates' Delegate Counts are Extremely Close

Posted on February 11, 2008
As of mid-February, the Democratic Presidential candidates have extremely close delegate counts. According to the Associated Press, Hillary Clinton has 1095 delegates to Barack Obama's 1070. CNN has Clinton ahead with 1100 to Obama's 1039. It is important to realize...

Financing Mergers & Acquisitions

Posted on February 11, 2008
The credit crisis is impeding mergers and acquisitions. One reason is that the corporate loans used to finance buyouts are languishing in the secondary markets. For instance, loans of Freescale Semiconductor are trading at a 15.5% discount of their original...

Societe Generale Trader

Posted on January 29, 2008
The saga of Jerome Kerviel causing $7.2 billion in losses for his employer, Societe Generale, is a timely reminder of the enormous shocks that small sparks can set. According to The Wall Street Journal, Mr. Kerviel was so low on...

Current Trends in Reverse Break-Up Fees

Posted on January 22, 2008
Traditional break-up fees are paid to suitors when a target withdraws from an acquisition. Reverse break-up fees are paid when an acquirer backs out of a deal. Financial sponsors are becoming more conservative in their deal making. This is evidenced....

There is Still Plenty of Buying Power

Posted on January 22, 2008
We believe mergers and acquisitions activity will remain strong. It is true that private equity players are hampered by an overhang of unsold LBO debt and that the credit markets have deteriorated substantially. However, there is as much as $250...

Blackstone Shakes Off Credit Crunch For A Day

Posted on January 18, 2008
Don't tell Blackstone there is a credit crunch on. Today The Wall Street Journal reports that Performance Food Group Co. agreed to be acquired by an affiliate of the Blackstone Group and Wellspring Capital Management in a deal valued at...

144a Securities Boom

Posted on January 16, 2008
Washington regulators have come up with another way to marginalize the ordinary retail investor by precluding them from participating in some of the more lucrative equity and bond markets. Under present market conditions people may scoff at the notion of...

The Link Between Chinese Demand and Urbanization

Posted on January 10, 2008
Anyone who follows the news can tell you that commodity prices have surged because of demand in China, India, and other emerging markets. Other factors figure into why commodities have boomed the last couple of years, but let us focus...

Selling Your Business

Posted on January 09, 2008
There was an interesting article in The Wall Street Journal today dealing with the long sales-cycle of selling a small business. Some advisors contend that sellers should begin the process of preparing their companies for sale seven years before they...

Price Stability

Posted on January 07, 2008
Just to continue with Friday's theme of this country's questionable monetary policy of the last 30 years I found an interesting passage in Alan Greenspan's book, "Age of Turbulence." The former Fed chairman briefly discusses the heyday of the gold...

Commodity Prices Continue Surge

Posted on January 04, 2008
Huckabee wins Iowa and my faith in the GOP as the vanguard of limited government and fiscal restraint has been destroyed. The only one talking any kind of sense in economic terms is Ron Paul. But the average voter has...

My Worry For 2008

Posted on January 02, 2008
My New Years Eve bubble-induced hangover did not help me forget the many worries I have for 2008. High oil prices (record $100 today), talk of recession, a return of populist politics, housing market crash, a weak dollar, a credit...

China is an Aggressive Acquirer

Posted on December 20, 2007
In 2007, Chinese companies have spent $29.2 billion acquiring foreign companies while investors from the rest of the world have bought $21.5 billion of Chinese companies. In recent months, Chinese entities have taken large stakes in companies such as Morgan...

Patience Is A Virtue

Posted on December 20, 2007
The much talked about era of distressed funds has yet to arrive. Don't get too impatient. Many analysts expect a slowdown in corporate profits over the next 12 months, which means debt-laden companies could struggle and eventually become crippled by....

Indian Pharmaceuticals

Posted on December 17, 2007
There was an interesting article in The Wall Street Journal today about Indian drug firms. According to the article, Indian generics makers such as Cipla and Glenmark are working to increase sales domestically and in emerging markets. Analysts estimate Indians...

Commercial Loans Experience Delinquency Uptick

Posted on December 13, 2007
According to the November edition of Real Estate Forum, "CMBS delinquencies continued to climb for the second straight quarter ... [which] jumped 16.2%, with $1.9 billion in loans being late, up from nearly $1.7 billion during the second quarter. Of....

Business Statistics

Posted on December 10, 2007
There was an interesting article in The Wall Street Journal discussing people's proclivity to commit certain actions based on their names or initials. For instance, some studies have suggested that people with an "A" or "B" in their initials get...