BLT: February 2017

 

Feature Articles

Business & Corporate

When the Last Thing You Need Is Another Headache: Auditors in Internal Investigations

Many internal investigations are fast-paced and present difficult issues for a company and its counsel to confront. One constituency that cannot be overlooked in these matters is the company’s outside auditor. A significant tension exists: the company needs the auditor to accept the results of the internal investigation before the auditor will provide an unqualified opinion on the company’s financials, and the auditor needs the company to have conducted a sufficiently robust investigation to provide the auditor, and its national office, with the comfort required to issue an unqualified opinion. This article addresses that tension and makes suggestions for processes that may be put in place to anticipate the auditor’s inquiries.

Business & Corporate

Asset-Based Lending Credit Facilities: The Borrower’s Perspective

When negotiating a credit agreement, several factors, including the borrower’s risk profile or credit ratings, impact the breadth of the affirmative, negative, and financial covenants imposed on the borrower. Some of the most burdensome credit agreements are asset based-lending credit agreements. This article provides an overview of ABL credit agreements and lays out several best practices when negotiating ABL credit facilities on behalf of borrowers to help avoid unintended “foot fault” defaults.

Departments

Business & Corporate

KEEPING CURRENT: Eleventh Circuit Confirms that Issuers Are Not Required to Disclose Retention of Outside Promotional Firms

This article discusses the Eleventh Circuit’s recent decision in In re Galectin Securities Litigation concerning a company’s disclosure obligations in the event the company hires and utilizes a third-party firm to promote the company and its stock. Despite a number of district court opinions on the issue – with varying results – this is the first circuit court to publish a decision on the topic.

Business & Corporate

DELAWARE INSIDER: Delaware Supreme Court Precludes Fraudulent Inducement of LLC Agreement and Employment Agreement as Defense in Advancement Proceeding

In the corporate context, Delaware has long recognized a public policy in favor of both indemnification and advancement. Despite the policy reasons favoring indemnification and advancement, the Delaware Limited Liability Company Act does not mandate either. In the recent decision of Trascent Management Consulting, LLC v. Bouri, the Delaware Supreme Court found that a defendant may not avoid advancing fees by arguing that the underlying LLC agreement was fraudulently induced.