Keeping You Apprised of Developments in Deal Making

Third Circuit Clarifies Board Observers Are Not Subject to Section 11 Liability

It is common for investors in venture capital and private equity transactions, and in other ‎investment arrangements, as a condition to their investment, to have rights to appoint board ‎observers when director representation is not available. An unanswered question has been the ‎extent to which a board observer has liability exposure under Section 11 of the Securities Act of ‎‎1933, for example, when a company goes public.‎

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Locke Lord QuickStudy: DOJ Announces New Policy on Credit for Antitrust Compliance Programs

On July 11, 2019, the Antitrust Division of the Department of Justice announced a substantial shift in its policy for incentivizing and rewarding the use of corporate compliance programs. For the first time, the Division will now consider the adequacy and effectiveness of a company’s antitrust compliance program in its charging decision—even when a company loses the race to be first under the Corporate Leniency Policy—and in appropriate cases will permit the use of deferred prosecution agreements instead of indictments or guilty pleas.

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Delaware Recognizes Reality of Merger Negotiations in Upholding Application of Business ‎Judgment Rule

In In re Towers Watson & Co. Stockholders Litigation, 2019 WL 3334521 (Del. Ch. July 25, 2019), the Delaware Court of Chancery applied the business judgment rule to dismiss a stockholder suit challenging the $18 billion merger of equals between Towers Watson & Co. and Willis Group despite allegations of imperfections in the merger negotiations.

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