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68(3): 687-738 (May 2013)
Issuers faced with a short attack—short selling of the issuer's stock combined with the spread of negative rumors—may contemplate defensive strategies such as litigation and contacting government regulators, in addition to the investor and public relations efforts that are typically utilized in the face of negative media coverage. Precedent calls for caution in these circumstances, as the record shows that the results of such strategies are mixed, with the SEC often turning its investigative focus to the issuer, and costly litigation resulting in compromise. This article begins with a discussion of the recent history of regulatory and legislative efforts to address concerns around short attacks and "naked" short selling. It then turns to a discussion of the SEC enforcement cases and private litigation relating to short attacks, and concludes that the SEC has correctly brought enforcement cases only in clear-cut instances of fraud, while policing the margins through enforcement of the technical requirements of Regulation SHO. The article shows that the SEC enforcement record in this area, and the proof issues generally attendant to these cases, present important considerations for issuers who perceive themselves under siege in a short attack.
68(3): 739-780 (May 2013)
When a business licenses a trademark, transactional lawyers regularly advise that if the trademark licensor files for bankruptcy, the licensee could be left without a right to use the mark and with only a bankruptcy claim for money damages against the licensor. Indeed, the ability of a trademark licensor to reject a trademark license and to limit a licensee’s remedies to a dischargeable claim for money damages has been a significant risk for licensees for twenty-five years based on the Fourth Circuit case, Lubrizol Enterprises, Inc. v. Richmond Metal Finishers, Inc. This result is grounded in the Bankruptcy Code prohibition on remedies of specific performance for non-debtor parties to rejected contracts and is in accord with Bankruptcy Code policy of affording debtors an opportunity to reorganize free of burdensome contracts. In the summer of 2012, however, the Seventh Circuit, in its decision Sunbeam Products, Inc. v. Chicago American Manufacturing, LLC, held that a non-debtor trademark licensee retains rights to use licensed trademarks following rejection of the contract by the debtor-licensor. The decision, derived from a pre-Bankruptcy Code paradigm for understanding the rights of non-debtors under rejected executory contracts that convey interests in property, creates a circuit split over the implications of trademark license rejection. This article asserts that the Sunbeam Products case misconstrues the rights of a trademark licensee as a vested property right and is therefore incorrect under both the holding of the Lubrizol case and the pre-Bankruptcy Code paradigm on which the Sunbeam Products case relies.
68(3): 781-784 (May 2013)
The Corporate Laws Committee develops and from time to time proposes changes in the Model Business Corporation Act. The Committee has proposed changes to Section 8.02.
68(3): 785-820 (May 2013),68(3): 785-820 (July 2013)
In 2010 the Legal Opinions Committee circulated an anonymous survey on firm practices in preparing and giving third-party closing opinions in business transactions. This report describes and discusses the responses and is intended to provide a general picture of the practices law firms of various sizes follow in preparing and giving closing opinions.
68(3): 821-838 (May 2013),68(3): 821-838 (July 2013),68(3): 821-838 (July 2013)
The Model Nonprofit Corporation Act Subcommittee developed, and from time to time proposes changes in, the Model Nonprofit Corporation Act. The Committee approved the contained amendments on August 4, 2012.
68(3): 842 (May 2013)
The Review covers significant developments in federal securities law and regulation during 2012. The Review is divided into three sections: regulatory actions, accounting statements, and caselaw developments. It is written from the perspective of practitioners in the field of corporate securities law.
68(3): 843-902 (May 2013)
This survey summarizes the significant regulatory developments in federal securities law in the year 2012. The survey specifically addresses recent developments under both Dodd Frank and the JOBS Act.
68(3): 903-910 (May 2013)
This survey summarizes the significant accounting developments as they relate to federal securities regulation in the year 2012. The survey is broken up into three sections. The first focuses on the Financial Accounting Standards Board's Accounting Standards Update. In this update the FASB advised that continuing care retirement community entities should classify advance fees as deferred revenue. The second section focuses on impairment testing for indefinite lived intangible assets and how the Accounting Standards Update affect this area. The final section is on classifying proceeds from the sale of donated financial assets in not-for-profit entities and the applicable Accounting Standards Update.
68(3): 911-976 (May 2013)
This survey summarizes the significant caselaw developments regarding federal securities regulation in the year 2012.