[The following post comes to us from Andrea Tinianow, who is a vice president and assistant general counsel at Corporation Service Company. She is also a Delaware attorney. This post relates to the Delaware Supreme Court’s decision upholding the Chancery Court in Martin Marietta Materials inc. v. Vulcan Materials, Inc. We had earlier discussed some of the substantive aspects of the Chancery...
Confidentiality Agreements in M&A Transactions: Lessons from Delaware
Background Amongst legal documents in an M&A transaction, the confidentiality agreement plays an important role, as it does in other types of investment transactions (such as private equity), especially when it involves a public listed company. There are two key aspects of interest in any confidentiality agreement, which are also often the bone of contention in negotiations: (i) the scope of...
The Debate over Staggered Boards
Staggered boards are found to be a form of anti-takeover defence. This concept, which is prevalent in several U.S. companies, ensures that only a third of the board can change each year. Hence, it would not be possible for shareholders to replace the board, except through a gradual process of changing a third of the board each year. There is an interesting battle brewing in the U.S...
Bhopal Gas Tragedy: Revisiting Issues of Liability under Corporate Law
Over at Critical Twenties, Arghya Sengupta has initiated a debate “on the twin issues of the legal responsibility of a successor multi-national company for the liabilities of its predecessor as well as … thoughts on the appropriateness of the Olympics partnering with such a corporation would be most appreciated.” I have sought to step into the debate by addressing questions of legal liability...
Miscellaneous
1. Reactions to Vodafone The discussions on the Vodafone judgment of the Supreme Court continue to raise questions regarding tax avoidance, and also aspects of corporate law (distinguishing the sale of shares and sale of assets). While Prashant Bhushan has raised questions regarding the judgment on several counts (here and here), Arvind Datar...
Outbound FDI and M&A
The Reserve Bank of India has published a paper/address titled “Outward Indian FDI – Recent Trends & Emerging Issues” that examines various regulatory aspects of outbound FDI by Indian companies. It considers various business aspects and comments upon regulatory issues and concerns. The latest issue of The Economist also looks at outbound M&A from India, and analyzes the level of success...
Amendments to the Merger Regulations
(The following post has been contributed by Rahul Singh, Assistant Professor of Law, National Law School, Bangalore (on leave) and Senior Associate, Trilegal) We live in interesting times where the Minister for Corporate Affairs (Indian competition authority’s administrative Ministry) speaks about helping Kingfisher Airlines and slaying the dragon of runaway inflation through the so-called second...
Calcutta High Court: Stamp Duty on Mergers/Demergers
We have earlier discussed the peculiar issues that have arisen on whether schemes of arrangement in the form of mergers and demergers are liable to stamp duty in states where the Indian Stamp Act applies or where there is no specific entry for levying stamp duty on such transactions. In relation to several states such as Delhi, Tamil Nadu and Uttar Pradesh, the relevant High Courts have held that...
Minority Shareholder Protection in M&A
The Economic Times examines a recent trend whereby companies have preferred asset sales or business sales (also known as “slump sales”, an expression that bears uniqueness to India, as I am yet to come across that expression elsewhere) over takeovers thereby shortchanging minority shareholders of the seller companies. The argument goes: by structuring the deal as a business sale, all that is...
Companies Bill, 2011: Amalgamation and Corporate Restructuring
The provisions of the Companies Act, 1956, specifically sections 391 to 394, contain an elaborate framework that enable companies to give effect to arrangements and compromises with their shareholders and creditors. The expression “arrangement” has interpreted to include a wide range of transactions, such as mergers, demergers and other forms of corporate restructuring (including debt...
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