Category: Corporate

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Comity, Chapter 15’s Public Policy Exception, and the Absolute Priority Rule

A Note by Christopher Stella

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Since chapter 15 of the Bankruptcy Code was enacted in 2006, there have been debates about when the public policy exception found in 11 U.S.C. § 1506 should apply to deny recognition of a foreign proceeding, law, or court order. Although some critics have made strong arguments in favor of a broad application of section 1506, the general rule among courts is to sparingly apply section 1506 and presume that recognition is proper. Despite the general rule in favor of recognition, courts have found some situations where section 1506 does apply. For instance, courts have applied section 1506’s public policy exception when core bankruptcy principles have been violated, or where statutory rights have been impinged. But courts have not fully addressed whether it would be proper to apply the public policy exception in a case where a foreign debtor’s … Read the rest

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Which Side Are You On: Cemex, Mandatory Bargaining, and the Future of Organized Labor

A Note by Jarrett Krouss

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Under President Joe Biden, the frequency of union elections exploded– election petitions increased by roughly a quarter in 2024 compared to 2022 and 2023, and were double those filed in 2021. While many factors have likely contributed to the rise in union elections, the August 2023 National Labor Relations Board (“NLRB”) decision in Cemex Construction Materials Pacific, LLC plays a major role. A three-to-one ruling of the NLRB Board, Cemex lowered requirements for the issuance of mandatory bargaining orders. . . .… Read the rest

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Racing Toward Reform: Limiting NASCAR’s Monopsony Power Through Structural Change

A Note by Lauren Hadley

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Since its inception in 1948, the France family has ruled NASCAR with an iron fist. As other American professional sports leagues became increasingly democratic through athlete unionization and joint venture structures, NASCAR remained a dictatorship. In 2016, NASCAR granted teams non-permanent charters, similar to franchises, to build equity and encourage investment. Theoretically, the charter agreement gave teams formal power in NASCAR governance by negotiating and bargaining for better terms every few years. However, during last fall’s charter renewal negotiations, it became clear this was
not true in practice. . . .… Read the rest

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An “Unmanageable” Task: Breach of Warranty Claims in Multi-State Class Action Litigation

An Article by William Beatty

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The crossroads of warranty law and class action litigation pose substantial hurdles for claimants asserting a multi-state class action for breach of express or implied warranty. Not only do they have to satisfy the rigorous Federal Rules of Civil Procedure Rule 23(a) requirements of numerosity, commonality, typicality and adequacy of representation, but also have to fit the cases into one of the three categories outlined in Rule 23(b). Plaintiffs must also deal with widely varying state rules regarding such issues as reliance, pre-suit notice and privity of contract which might destroy the required elements of commonality or typicality. These variables have resulted in several courts deeming multi-state warranty class actions to be “unmanageable,” rendering them unsuitable for class-wide resolution.… Read the rest

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Chipotle and the Need for HR Oversight In Settlement Avoidance Strategies

By: Matthew Lowe

Introduction

When litigation looms for large corporations, settlement becomes a key part of the strategy discussion. In order to avoid the costliness associated with, and reputational damage from, lengthy trials, it is not unexpected for a company to dip into its litigation budget and pay a premium to avoid the hassle. Some companies, however, adopt the opposite strategy: settlement avoidance. If a company is to adopt such a strategy, it will also need to adopt proper defensive measures, such as the implementation of adequate Human Resources (“HR”) oversight, in order to effectively ride out the storm of the trial.

Background

Following Chipotle Mexican Grill, Inc. (“Chipotle”) going public in January of 2006, it came to be known as an “industry darling”.[1] Recognized for its transparency and its commitment to utilizing farm-fresh, high-quality ingredients, Chipotle was a trendsetter and leader in the fast-casual movement in dining.[2]… Read the rest

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New Legal Problems Created by Wearable Devices

By: Young Ah Kim

I. Introduction

Wearable devices have been drawing serious attention in the media as the next big thing since Google glass, a wearable device with an optical head-mounted display, was launched in 2013.[1] Fitbit, the maker of fitness-tracking wristbands, went public in 2015 after its sales rose 174% to $745 million in 2014.[2] Since GoPro’s initial public offering in 2014, the maker of the action camera has climbed over 100% from its top-of-the-range IPO price-per-share.[3] Apple unveiled the Apple watch that can monitor heart rate and activity and create a one-stop shop for health information of consumers.[4] Apple CEO Tim Cook called the Apple Watch “the most personal device we’ve ever created.”[5] According to Statista, an Internet-based statistics provider, “the global wearable device market is expected to grow from $5 billion in 2014 to $12.6 billion by 2018.”[6] In a 2014 … Read the rest

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The Best Offense Is a Good Defense: The Strategic Value of Building a Strong Corporate Culture

By: Matthew Lowe

I. Introduction

In 2014, a University of Virginia Law Professor, Brandon L. Garrett, wrote a book entitled: Too Big to Jail: How Prosecutors Compromise with Corporations. In his book, Garrett inadvertently outlined a strategy for companies to follow, which would allow them to increase morale and productivity while also putting measures in place to avoid damaging litigation. Relying on the development and successful implementation of a healthy, viable corporate culture, the benefits of this strategy should serve as the catalyst for wide scale adoption.

II. Background

In the 1930s, a Republican attorney by the name of Conrad Printzlien left his position in the district attorney’s office in the Eastern District of New York to work as a probation officer.[1] While this voluntary career shift meant a 50% salary reduction, Printzlien accepted the position partially due to the urging of the court, but also because he … Read the rest

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Unnecessary Toughness: Throwing the Flag on the NFL’s New Personal Conduct Policy

By: Jack Meyer

In the wake of the Ray Rice incident and subsequent domestic violence arrests involving several other NFL players during the 2014 season, the NFL encountered a public relations firestorm. The NFL faced widespread public criticism that domestic violence among NFL players had become an “epidemic” and that the male dominated league was indifferent to the issue.[1] Commissioner Roger Goodell nearly lost his job after his perceived mishandling of the Rice incident, and public pressure forced the NFL take significant action to address domestic violence offenses among its players.[2]

This pressure led the NFL to hastily implement a player conduct policy specifically aimed at addressing crimes against women, such as domestic violence and sexual assault. The NFL admittedly used this new policy as a public relations maneuver, knowing full well that the policy did little to actually prevent domestic violence and was only aimed at publicly … Read the rest

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Practical Tips to Comply with SEC Beneficial Ownership Reporting Requirements

By: Clyde Tinnen, Partner, Kelley Drye & Warren LLP – Clyde Tinnen is a partner in the Chicago office of Kelley Drye & Warren LLP. He focuses his practice on corporate law matters, including finance and securities law.  Any questions relating to topics discussed in this article may be directed to the author at ctinnen@kelleydrye.com.

Practical Tips to Comply with SEC Beneficial Ownership Reporting Requirements

On September 10, 2014, the Securities and Exchange Commission announced charges against 28 officers, directors, or major shareholders for failure to promptly file Form 4 and Schedule 13D and 13G reports, resulting in financial penalties totaling $2.6 million.  Six publicly-traded companies were charged for contributing to filing failures by insiders or failing to report their insiders’ filing delinquencies. SEC enforcement staff used quantitative data analytics to catch the violators. The news came as a shock to many practitioners given the Commission’s historically passive stance on … Read the rest

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Government Gone Overboard With Sarbanes-Oxley

By: Austin Root 

               For most, it would be a stretch to compare the acts of a corporate executive who shredded company documents in order to cover up financial fraud with those of a fisherman who threw a few undersized red grouper fish back into the sea.  For the Department of Justice, it is not stretch at all as both are guilty of the same crime.  Should the Supreme Court agree with this comparison, there will surely be vast waves that disturb the business landscape.

Act One

In October of 2001, a scandal was revealed at the American energy company, Enron Corporation, which eventually led to the company’s bankruptcy, dozens of charges against its executives, and the dissolution of Arthur Anderson, one of the largest audit and accountancy partnerships in the world.[i]  Enron was able to hide billions of dollars in debt through misleading financial statements while portraying themselves … Read the rest