DEAL POINTS The Newsletter of the Committee on Mergers and Acquisitions FROM THE CHAIR Leigh Walton – Chair Wilson Chu – Vice Chair By Leigh Walton Keith A. Flaum – Vice Chair I look forward to seeing many of you at Mark A. Morton – Vice Chair the American Bar Association’s Business Law Michael K. Reilly - Editor Section Spring Meeting in Denver to be held April 22, 2010 through April 24, 2010. Our CONTENTS base hotel is the Sheraton Denver Downtown Hotel. The Committee on Mergers and FROM THE CHAIR ................................................... 1 Acquisitions is sponsoring several great FEATURE ARTICLES programs, including a program on Thursday, from 8:00 a.m. until 10:00 a.m., entitled FCPA Lesson: Anatomy of an “Creating Contractual Limitations on Seller Acquisition Gone Awry ........................................... 3 Liability that Work Post-Closing: Avoiding The Elimination of Canadian Withholding Serious Pitfalls in Domestic and International Tax Impediments to M&A Transactions ................ 12 Deals” and a program on Saturday, from 10:30 a.m. until 12:30 p.m., entitled “No Shops and TASK FORCE REPORTS Jumping Bidders: When to Talk and How to Task Force on Acquisitions of Walk.” I am pleased to report that there will be Public Companies .................................................. 16 an expanded number of substantive Task Force on Distressed M&A ............................. 17 presentations at our many subcommittee and task force meetings that occur generally Friday Task Force on the Model Stock Purchase and Saturday. Agreement .............................................................. 17 During our full Committee meeting on SUBCOMMITTEE REPORTS Saturday, from 12:30 p.m. until 3:00 p.m., we International M&A Subcommittee ......................... 18 will receive perspectives from Chief Justice Myron Steele on the legal issues arising out of Membership Subcommittee ................................... 19 changes in proxy access and constituent M&A Jurisprudence Subcommittee ....................... 20 directors. We look forward to welcoming the M&A Market Trends Subcommittee ..................... 29 general counsel of Molson Coors Brewing Company, who will share his thoughts on “The Private Equity M&A Subcommittee ...................... 30 Use of Outside Counsel in M&A Transactions: Programs Subcommittee ........................................ 31 Perspectives from a Fortune 100 Company.” Our program will include a presentation on COMMITTEE MEETINGS MATERIALS “Closing Failures – An Analysis of Remedies Schedule of Meetings and Other Activities ............ 32 ( continued on next page ) Page 1 Volume XV, Issue 1 Spring 2010
Available to Target Companies” by Stephen M. 2011. Please mark these dates so you can Kotran, and a presentation on “Modernizing the minimize conflicts with these important events. Approach to Due Diligence” by Ben Longoria, Most issues of Deal Points congratulate founder of WizDocs. Our full Committee our significant achievements (many as they meeting will be followed by a Committee are). In this message, I’d like to take a slightly Forum moderated by Neal Brockmeyer entitled different approach by challenging you. I believe “Measuring Damages in an M&A Dispute.” we can do a better job of delivering our content. The dial-in information for the full Admittedly, if we deliver the revised Model Committee meeting and Committee Forum is as Stock Purchase Agreement and the Public follows: Company Model Merger Agreement in 2010 – we will have produced impressive content. US: 888-209-3912 Very few disagree that our works have been the International: 416-620-2799 most significant ever authored by the M&A Passcode: 5380339 community. The hours of effort, the diversity of Dial-in information for subcommittee contributors, and the quality control have been and task force meetings will be circulated by combined to showcase our amazing talent. the respective Chairs. But these works have taken upwards of While on the subject of the schedule for a decade to produce. I believe we need to the Spring Meeting, I would encourage those of continue to diversify our output. We need you attending (in person or by conference call) quality, practical content that is delivered to use the schedule printed in this issue of Deal quickly. We need to be more relevant to less Points as a guide. There have been an experienced lawyers. We need to be more unprecedented number of changes recently due relevant to in-house counsel. Perhaps our to travel schedules and speaker preferences. website needs to be more accessible, our Some of the materials you receive from the content more approachable, our ideas more ABA may be dated. innovative. Your Committee leadership is beginning to explore these issues, led by our The Committee dinner is scheduled for Membership Committee headed by Mireille Saturday evening at Palettes in the Denver Art Fontaine, Tracy Washburn, and Ryan Thomas. Museum, 100 West 14th Avenue Parkway. We Please reach out to us with your ideas as we would like to thank our friends at Practical Law strategize about attaining these goals. Company for the sponsorship of our dinner. The reception begins at 7:00 p.m., followed by On another front, I am proud to report dinner at 8:00 p.m. that it is time to transform our Task Force on Acquisitions of Public Companies into a Following the Denver conference, our Subcommittee. For those of you not steeped in next meeting will be at the ABA’s Annual ABA tradition, Task Forces are for “short-term” Meeting in San Francisco to be held from projects. Since our Public Company Model August 6, 2010 through August 9, 2010. The Merger Agreement is now in the editorial Business Law Section hotels are the process, the leadership of the Committee Fairmont/Intercontinental and the Mark determined that it is appropriate to add Hopkins. Our stand-alone meeting will be held permanence to our public company efforts by in Miami at the Ritz Carlton Coconut Grove denominating it a Subcommittee. from January 28, 2011 through January 29, Page 2 Volume XV, Issue 1 Spring 2010
The only choice to lead the Committee FEATURE ARTICLES for its first year is Diane Holt Frankle. She has invested innumerable hours of her professional time in the Model Merger Agreement. It only makes sense that she should launch the FCPA Lesson: Anatomy of an Subcommittee. She will have the reigns through Acquisition Gone Awry the end of 2010, supported by Vice Chairs Jim Griffin and Lorna Telfer. If you have ideas, approach them. We are very appreciative of the By fine job that Diane and Steve Knee have done James T. Parkinson in leading the Task Force throughout its entire and existence. The work product that this Task Lauren R. Randell 1 Force is about to publish is nothing short of Most companies understand that they remarkable. run afoul of the Foreign Corrupt Practices Act As a closing note, most view the (“FCPA”) if they pay bribes to foreign officials. Committee as a family. We participate in this But the caution with which most companies Committee not only to learn, but also to conduct their own operations does not always network. And when we network, we form match the practices at companies they plan to friendships. During this process, most of us acquire. In the harried moments surrounding a have formed a friendship with George Taylor of new acquisition, it may be tempting for an Burr & Forman in Birmingham, and his lovely acquiring company to defer inquiry into the on- wife Honey. Their son Clinton died recently the-ground practices of its target, or perhaps when in an accident as a passenger in a car even turn a blind eye to a representation that returning from a debate tournament. I am sad seems too good to be true. that we lost a person who I am confident would An FCPA violation by the target of an have been a future member of our Committee. acquisition can, and will, become the acquirer’s Our sincere condolences go out to George, problem if the acquirer fails to conduct adequate Honey, and their extended families. pre-acquisition due diligence and follow through on whatever it finds. That was certainly * * * the case for an ill-fated telecom acquisition in 2007, when eLandia International Inc. (“eLandia”) bought Latin Node Inc. (“Latin Node”). Just months after closing on the FOR A SCHEDULE acquisition, eLandia’s attempts to integrate OF OUR MEETINGS Latin Node’s operations revealed millions of dollars in improper payments to agents and AND OTHER ACTIVITIES officials of foreign government-owned IN DENVER PLEASE SEE PAGE 32 1 Mr. Parkinson is a partner at Mayer Brown LLP whose OF THIS ISSUE OF DEAL POINTS practice focuses on FCPA representations. Ms. Randell is an associate with the firm. Both practice in the firm’s Washington, D.C. office. The views expressed are those of the authors and may not be representative of those of the firm or its clients. Page 3 Volume XV, Issue 1 Spring 2010
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