Posts Tagged 'Wachtell Lipton Rosen & Katz'

Compensation Season 2010 – Issues to Consider

by Jeremy Goldstein, for The Harvard Law School Forum at Harvard Law School, Febraury 6, 2010.

For many public companies, the new year marks the commencement of compensation season. Setting pay and targets for the new year, determining achievement of performance objectives for the past year and preparing the annual proxy statement contribute to a busy first quarter for compensation committees and management teams working with them. In 2010, companies will undertake these activities in a fluid environment, with executive compensation continuing to receive significant attention from shareholder activists, government and the media. As companies prepare for the upcoming compensation season, they should consider the following items.

New SEC Disclosure Requirements. Companies should take steps to ensure compliance with the new SEC rules which, among other things, address corporate governance matters, risk in compensation programs, independence of compensation consultants and the valuation of equity awards in the compensation tables (see see this Forum post or this Wachtell, Lipton, Rosen & Katz client memorandum for a description of the new rules). Companies should get an early start on organizing appropriate working groups, crafting necessary disclosures and preparing their directors so that they can meet their obligations with respect to upcoming filings…(continue reading)


Bank of America E-Mails Show Lehman, Not Merrill Was Buy Target

by Linda Sandler, for Bloomberg, February 5, 2010.

Feb. 5 (Bloomberg) — When Bank of America Corp.’s board met to approve the acquisition of an investment bank on Sept. 15, 2008, members thought they were going to buy Lehman Brothers Holdings Inc., not Merrill Lynch & Co., according to New York Attorney General Andrew Cuomo.

The bank bought Merrill after examining its books for just 25 hours, Cuomo claimed. Shareholders approved the deal on Dec. 5, 2008. The acquisition closed Jan. 1, 2009, after Merrill losses had increased by billions of dollars, a change the bank didn’t disclose before the shareholder vote, Cuomo said.

“It’s the way we approved acquisitions that ticks me off the most!!!” director Chad Gifford later wrote in an e-mail about the last-minute switch, according to a securities-fraud complaint Cuomo filed yesterday in state court in New York. Lehman filed for bankruptcy on Sept. 15, 2008.

Cuomo’s complaint was filed against Bank of America, former Chief Executive Officer Kenneth Lewis and ex-Chief Financial Officer Joe Price over their handling of the Merrill deal…(continue reading)

Panels Discuss International Mergers and Acquisitions

by Scott Hirst, for The Harvard Law School Forum at Harvard Law School, December 23, 2009.

Recently, Vice Chancellor Leo Strine, Jr. hosted two sessions on international aspects of mergers & acquisitions practice in his Mergers and Acquisitions class here at Harvard Law School.

In a presentation entitled Viva Là Difference: Anatomy Of A Cross-Border Deal, David Katz, a partner at Wachtell, Lipton, Rosen & Katz, discussed cross-border mergers and acquisitions, focusing on two French transactions that he’d been involved in, as well as discussing several recent developments relevant to cross-border mergers and acquisitions practice. In particular, he focused on Sanofi’s hostile acquisition of Aventis, and contrasted it with the merger of equals of Alcatel and Lucent. The video of this session is available here.

In the second panel, distinguished practitioners and academics discussed takeover transactions in Europe with the Vice Chancellor…(continue reading)

Bruce Wasserstein

by Martin Lipton, for The Harvard Law School Forum at Harvard Law School, December 9, 2009.

Editor’s Note: Martin Lipton is a founding partner of Wachtell, Lipton, Rosen & Katz, specializing in mergers and acquisition and matters affecting corporate policy and strategy. This post is based on remarks delivered by Mr. Lipton at the memorial service for Bruce Wasserstein earlier this week.

Sometime after leaving the Cravath law firm to join First Boston in 1977 and before co-founding Wasserstein Perella in 1988, Bruce Wasserstein moved from being a phenomenal investment banker to an investment banking legend. If I had to place the time of the transformation, I would choose 1981. It was when Bruce advised DuPont on the takeover of Conoco, which at that time was the largest takeover in corporate history. Conoco was a classic case of the complexity and tactical maneuvering that were features of the takeover battles that caught the attention of the Nation for most of the decade of the 80’s. First having been attacked by Dome Petroleum, then having negotiated a merger with Cities Service, Conoco was again attacked, this time by Seagrams, just as it was about to sign a merger agreement with Cities Service. In desperation, Conoco turned to DuPont to rescue it. Bruce structured a deal that outmaneuvered Seagrams, was successful despite a higher offer from Mobil, and resulted in DuPont acquiring all of Conoco. The investment banking world recognized that DuPont’s success was the result of the brilliant strategy and tactics of Bruce Wasserstein. The legend was born…(continue reading)

Corporate Governance Provisions Added to Financial Reform Bill

by Martin Lipton, for The Harvard Law School Forum at Harvard Law School, November 10, 2009.

(Editor’s Note: This post is based on a Wachtell, Lipton, Rosen & Katz memorandum by Martin LiptonTheodore N. MirvisSteven A. RosenblumDavid M. Adlerstein and Karessa L. Cain.)

Senator Dodd unveiled his 1,136-page financial reform bill discussion draft today, which proposes a variety of new financial industry regulations and regulatory agencies. While the bill focuses on these wide-ranging and controversial financial reform proposals, a number of corporate governance reforms are also buried in the bill on pages 755 to 762, and are largely taken, albeit in somewhat weakened form, from Senator Schumer’s proposed Shareholder Bill of Rights Act. As we have previously commented, these governance reforms, while presented as a means of enhancing corporate governance and restoring stability to American companies, are likely to have just the opposite effect. See the Wachtell, Lipton, Rosen & Katz memoranda “A Crisis Is a Terrible Thing to Waste: The Proposed ‘Shareholder Bill of Rights Act of 2009’ Is a Serious Mistake,” posted on the Forum here, and “Corporate Governance in Crisis Times,” posted on the Forum here…(continue reading)

Lessons for M&A Advisors in Crafting Engagement Letters

by David A. Katz, for The Harvard Law School Forum at Harvard Law School, November 10, 2009.

(Editor’s Note: This post is based on a Wachtell, Lipton, Rosen & Katz memorandum by David A. KatzWilliam Savitt, and Ryan A. McLeod.)

A federal court decision interpreting an investment bank’s engagement letter on a motion to dismiss highlights the risk that—absent careful drafting—financial advisors may be held liable to third-party beneficiaries on both contract and fiduciary duty claims. Baker v. Goldman Sachs, Civ. No. 09-10053-PBS (D. Mass. Sept. 15, 2009).

The financial advisor represented a closely held company, founded and controlled by the Bakers, in connection with its review of potential strategic transactions in early 2000. Allegedly relying on the financial advisor’s advice, the company entered into a stock-for-stock merger agreement with a Dutch buyer, and the deal closed in June 2000. Just months later, the Wall Street Journal uncovered a massive accounting fraud at the Dutch buyer, whose shares subsequently lost all value and whose collapse cost the Bakers their investment. Seeking to recoup some of their losses, the Bakers filed suit against the financial advisor for breach of contract and fiduciary duty. The financial advisor moved to dismiss, arguing that its engagement agreement was with the closely held company alone and that it owed neither fiduciary nor contractual duties to the Bakers…(continue reading)

Excessive Executive Pay: What’s the Solution?

by Roger Thompson, for Working Knowledge at Harvard Business School, September 21, 2009.

In the search for culprits in the global financial meltdown, bloated executive pay and the excessive risk-taking behavior it fueled stand out as prime suspects. Of the two, pay dominates the headlines and provokes the most public and political outrage.

Pitchfork populism over the issue reached a crescendo last March when insurance conglomerate AIG, kept on life support with up to $183 billion in taxpayers’ cash, dished out bonuses totaling $165 million to 400 employees in the London office whose derivatives trading nearly destroyed the company. Lavish pay for poor performance wasn’t just an AIG phenomenon. On Wall Street, it was endemic. Bankers gave themselves nearly $20 billion in 2008 bonuses, even as the economy was spiraling downward and the government was spending billions on bailouts.

Politicians pounced. President Obama called Wall Street’s outsize pay packages “shameful,” especially for companies in need of federal bailouts. Such pay, he said, is “exactly the kind of disregard for the costs and consequences of their actions that brought about this crisis—a culture of narrow self-interest and short-term gain at the expense of everything else.”

That culture, critics maintain, spawned executive compensation plans with incentives that encouraged the excessive risk-taking that led to the financial crisis. And while the intricate details of pay plans don’t evoke the outrage of multimillion-dollar paydays, curbing the risk-taking incentives embedded in those plans is key to resolving the current crisis and preventing another. That task falls, by law, to corporate boards, clubby groups that are widely criticized as the handpicked “captives” of self-serving management…(continue reading)

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