Clients & Friends Memos


COVID-19 Resource Center

Access our latest insights on the impact of COVID-19 to help you navigate this unprecedented environment.

Seila Law LLC v. Consumer Financial Protection Bureau: Has the Supreme Court Tamed or Empowered the CFPB?

July 02, 2020

On June 29, the Supreme Court issued its long-awaited opinion in Seila Law LLC v. Consumer Financial Protection Bureau, finally resolving the question that has dogged the new agency since its inception:  Is the leadership structure of the Consumer Financial Protection Bureau (CFPB) constitutional?  Writing for a 5-4 majority, Chief Justice John Roberts ruled that the CFPB structure—“an independent agency that wields significant executive power and is run by a single individual who cannot be removed by the President unless certain statutory criteria are met”—violates the Constitution’s separation of powers.


Related Attorney(s): Rachel Rodman, Scott Cammarn, Nihal Patel
Related Practice(s): Financial Regulation, White Collar Defense and Investigations
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FTC and DOJ Jointly Issue Vertical Merger Antitrust Guidelines

July 02, 2020

The Federal Trade Commission and the U.S. Department of Justice this week announced the final version of their first jointly-issued Vertical Mergers Guidelines (the “Guidelines”).  The Guidelines were issued along a party-line vote, with the three Republican FTC Commissioners and the Republican-led DOJ supporting the Guidelines and the two Democratic FTC Commissioners vehemently opposing them.  


Related Attorney(s): Joel Mitnick, Ngoc Hulbig, Eden Sung
Related Practice(s): Global Litigation
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The Mark Hotel Borrower Granted Injunction Delaying Mezzanine Lender’s Foreclosure Sale

July 01, 2020

On June 23, 2020, the Supreme Court of the State of New York, County of New York: Commercial Division (the “Court”) issued a preliminary injunction in favor of the plaintiff D2Mark LLC (the “Borrower”) enjoining the defendant, OREI VI Investments LLC (the “Mezzanine Lender”) from proceeding with a UCC foreclosure sale of the equity interests in The Mark Hotel for thirty (30) days.


Related Attorney(s): Melissa Hinkle, Christopher Dickson, Nathan Bull, Howard Hawkins
Related Practice(s): Global Litigation, Real Estate
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ARRC Publishes Refreshed Recommended Fallback Language for Syndicated Business Loans for LIBOR Transition Planning

June 30, 2020

On June 30, 2020, the Alternative Reference Rates Committee (“ARRC”) published recommendations regarding more robust fallback language for new originations of U.S. dollar-denominated syndicated business loans that reference LIBOR.  The ARRC’s recommendations contain refreshed hardwired fallback language (the “Updated Fallback Language”) and an updated user’s guide regarding such hardwired language and potential drafting alternatives (the “Updated User’s Guide”).


Related Attorney(s): Jeffrey Nagle, Lary Stromfeld, Evan Carter
Related Practice(s): Financial Regulation, LIBOR Preparedness Team
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Volcker 3.0: The Agencies Relax the Volcker Rule Requirements for Securitizations and Foreign Funds and Grant New Exemptions from the Covered Fund Restrictions

June 26, 2020

On Thursday, June 25, 2020, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, and the Commodity Futures Trading Commission (collectively, the “Agencies”) issued final regulations (the “2020 Final Regulations”) revamping the existing regulations implementing the Volcker Rule, a centerpiece of the Dodd-Frank Wall Street Reform and Consumer Protection Act.


Related Attorney(s): Scott Cammarn, Stuart Goldstein, Gregg Jubin, Ivan Loncar, Dorothy Mehta, Nathan Spanheimer, Sebastian Souchet
Related Practice(s): Financial Regulation, Securitization & Asset Based Finance
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Disgorgement’s Role in SEC Enforcement Actions: An Analysis of the Supreme Court’s Decision in Liu v. SEC

June 24, 2020

On June 22, 2020, the U.S. Supreme Court threw the SEC a lifeline in the highly-anticipated decision of Liu v. SEC. In an 8-to-1 decision, the Justices held that the SEC may continue to obtain disgorgement in federal court, albeit in a significantly narrowed fashion.


Related Attorney(s): Kyle DeYoung, Lex Urban, Wesley Wintermyer
Related Practice(s): Global Litigation, White Collar Defense and Investigations
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Marketplace Lending #8: Colorado Scores in Madden 2020

June 24, 2020

On June 9, a Colorado trial court ruled that loans to Colorado consumers originated by Cross River Bank on behalf of Marlette Funding were subject to the Colorado usury rate of 12% -- despite federal law that allows an FDIC-insured bank such as Cross River Bank to “export” its rate of interest from the bank’s home state. 


Related Attorney(s): Scott Cammarn, Jonathan Watkins, Marshall Jones
Related Practice(s): Financial Regulation, Global Litigation
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UK Government Proposes Increased Powers for the FCA over the LIBOR Wind-Down Process

June 24, 2020

On 23 June 2020, the UK government announced its intent to enact legislation to amend the UK regulatory framework applicable to critical benchmarks, including LIBOR. The proposed amendments would give the UK Financial Conduct Authority (the “FCA”) additional powers in circumstances where LIBOR ceases to be representative of the market it seeks to measure and will not be restored to representativeness. The UK government has recognized that this scenario may occur in the lead-up to the cessation of the LIBOR rate (scheduled for the end of 2021), as panel banks will no longer be compelled to take part in the LIBOR calculation process.


Related Attorney(s): Lary Stromfeld, Assia Damianova, Nihal Patel, Michael Sholem, Danielle Wheeler
Related Practice(s): Financial Regulation, LIBOR Preparedness Team, Securitization & Asset Based Finance
Related Office(s): London, New York
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EU Parliament Adopts Sustainability Taxonomy Regulation to Fight Greenwashing

June 22, 2020

On 18 June 2020, the European Parliament formally adopted the EU’s Sustainability Taxonomy Regulation. The aim of the Regulation is to provide an EU-wide framework for classifying economic activity as environmentally sustainable (an overview of the Regulation can be found in our memo on the subject). Adopting a consistent framework is expected to reduce “greenwashing”, where financial products are marketed as environmentally sustainable without sufficient factual basis for their claims, improving the efficiency with which private investment can be made in sustainable projects.


Related Attorney(s): Joanna Valentine, Michael Sholem, Christopher Smith
Related Practice(s): Corporate, Financial Regulation
Related Office(s): London
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COVID-19 Update: PPP Oversight Efforts May Impact Lenders

June 22, 2020

Recent press coverage concerning transparency and oversight with respect to the Paycheck Protection Program (“PPP”) has largely focused on PPP borrowers and the ability of Congress and federal inspectors general to obtain PPP borrower data from the Small Business Administration (“SBA”).  The SBA has announced that it will release certain information about the loans PPP lenders issued.


Related Attorney(s): Jodi Avergun, Scott Cammarn, Christian Larson, Kendra Wharton
Related Practice(s): Financial Regulation, White Collar Defense and Investigations
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Time to Revisit Your Company’s Compliance Culture: A Checklist for Evaluating Corporate Compliance Programs under DOJ’s June 2020 Compliance Guidance Updates

June 15, 2020

On June 1, 2020, DOJ updated the guidance that its prosecutors use to evaluate corporate compliance programs. The guidance is critical to companies subject to the FCPA and other corporate criminal liability, as it informs prosecutors’ charging and settlement decisions, as well as how to assess monetary penalties, and whether ongoing compliance obligations (including monitorships) are necessary. The update emphasizes the importance of a dynamic, adaptable compliance program and the centrality of a data-driven approach to compliance.


Related Attorney(s): Jodi Avergun, Todd Blanche, Wesley Wintermyer
Related Practice(s): Global Litigation, White Collar Defense and Investigations
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Kirschner Decision—Implications for CLOs and Syndicated Loans

June 08, 2020

On May 22, 2020, Judge Paul G. Gardephe of the U.S. District Court for the Southern District of New York granted a motion to dismiss in Kirschner v. JPMorgan Chase Bank, N.A., finding, inter alia, that the syndicated loans at issue in Kirschner are not securities for purposes of state securities laws by applying the “family resemblance” test set forth in Reves v. Ernst & Young.


Related Attorney(s): Neil Weidner, Gregg Jubin, Joseph Beach, David Gingold, Nathan Spanheimer, Scott Cammarn, Jason Halper, Jeffrey Nagle, Christopher McDermott, Maurine Bartlett, Peter Williams, Joseph Gambino, Adam Risell, Danielle Katz, Ailsa Chau
Related Practice(s): Financial Regulation, Global Litigation, Securitization & Asset Based Finance
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COVID-19 Update: Mayor DeBlasio Signs Legislation Intended to Limit the Enforcement of Personal Liability Provisions in Commercial Leases in New York City

May 29, 2020

On May 26, 2020, New York City Mayor Bill DeBlasio signed into effect a law (the “New Law”) that amends the administrative code of New York City to prohibit the enforcement of provisions in a commercial lease or other rental agreement that provide for personal liability of a natural person who is not the tenant (i.e., a guarantor) for certain charges under the agreement in cases where the tenant has been impacted by the COVID-19 pandemic.


Related Attorney(s): Steven Herman, Nicholas Brandfon
Related Practice(s): Real Estate
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SEC Adopts Amendments to Disclosure Requirements for Acquired and Disposed Businesses

May 29, 2020

On May 21, 2020, the Securities and Exchange Commission (the “SEC”) adopted amendments to its disclosure requirements for acquired and disposed businesses.  The amendments, which are effective January 21, 2021 (the “Amendments”), are intended to assist registrants in making more meaningful determinations of whether an acquired or disposed business or subsidiary is significant, reduce the complexity and burden of producing required financial information in connection with acquisitions and dispositions and improve the quality of financial information for investors.


Related Attorney(s): William Mills, Braden McCurrach, Peter Bariso
Related Practice(s): Corporate
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ARRC Releases Best Practices for Orderly LIBOR Transition

May 28, 2020

On May 27, 2020, the Alternative Reference Rates Committee (“ARRC”) published recommended best practices for preparing for the end of USD LIBOR (the “Best Practices”). The Best Practices aim to provide appropriate target milestones and timelines to minimize market disruption for the end of USD LIBOR.


Related Attorney(s): Lary Stromfeld, Nihal Patel, Owen Omoregie
Related Practice(s): Financial Regulation, LIBOR Preparedness Team
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COVID-19 Update: Updated FAQs and MLSA Released by the Federal Reserve Provides Additional Details on Eligible ABS, Eligible Borrowers and Financing Terms under TALF

May 27, 2020

On Wednesday, May 20, 2020, the Federal Reserve announced the first loan subscription date for the Term Asset-Backed Securities Loan Facility (“TALF”) and published the Master Loan and Security Agreement (the “MLSA”) and an expanded set of Frequently Asked Questions, providing further details on the terms and conditions that will apply to borrowings under TALF.  On Tuesday, May 26, 2020, the Federal Reserve released another updated set of Frequently Asked Questions with additional clarifications applicable to TALF and an updated form of issuer and sponsor certification.  The Updated FAQs follow the release on May 12, 2020 by the Federal Reserve of its initial set of Frequently Asked Questions for the TALF program (the “Initial FAQs”).


Related Attorney(s): Joseph Beach, David Gingold, Gregg Jubin, Nathan Spanheimer, Neil Weidner, Joseph Gambino, Danielle Katz, Adam Risell, Peter Williams
Related Practice(s): Securitization & Asset Based Finance
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“Caveat Emptor”: New York Bankruptcy Court Disallows Bankruptcy Claims Purchased from Recipients of Avoidable Transfers; Is Enron Going, Going, . . . ?

May 26, 2020

A recent Bankruptcy Court decision, In re Firestar Diamond, Inc., out of the Southern District of New York (“SDNY”) by Bankruptcy Judge Sean H. Lane, disallowed creditors’ bankruptcy claims purchased from sellers who allegedly received (and had not repaid) avoidable preferences and fraudulent transfers from the debtors. Judge Lane provides a cogent warning to claims purchasers that they bear the risk of Bankruptcy Code section 502(d) disallowance.


Related Attorney(s): Michele Maman, Eric Waxman, Elizabeth Ruocco, Samantha Greenfield
Related Practice(s): Financial Restructuring
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COVID-19 Update: NYSE and Nasdaq Adopt Temporary Exceptions to Certain Shareholder Approval Requirements

May 22, 2020

The NYSE and Nasdaq continue to provide temporary relief from certain of their listing and corporate governance requirements amid the market disruption caused by COVID-19.  In March and April, the NYSE suspended its minimum market capitalization requirement and provided relief from its shareholder approval requirements for 20% issuances and for transactions with related persons, in each case through June 30, 2020.


Related Attorney(s): William Mills, Braden McCurrach, Marianna Wonder
Related Practice(s): Corporate
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COVID-19 Update: An End to Temporary Restrictions on Short Selling in the European Union

May 19, 2020

Further to our Clients and Friends Memorandum of 22 April 2020, on 18 May 2020 the European Securities and Markets Authority (“ESMA”) issued a press release on the non-renewal of and termination of short selling bans by the following national competent authorities (“NCAs”): Austria's Finanzmarktaufsicht (FMA) Belgium's Financial Securities and Markets Authority (FSMA); France's Autorité des Marchés Financiers (AMF); Greece's Hellenic Capital Market Commission (HCMC); Italy's Commissione Nazionale per le Società e la Borsa; and Spain's Comisión Nacional del Mercado de Valores (CNMV).


Related Attorney(s): David Quirolo, Joanna Valentine, Michael Sholem
Related Practice(s): CLOs, Corporate, Financial Regulation, Securitization & Asset Based Finance
Related Office(s): London
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The Law’s Long Reach: Recent Actions Show Federal Enforcement Agencies Are Not “Locked Down” by Social-Distancing and Quarantine Orders

May 19, 2020

For federal law enforcement agencies – like the rest of government and society at large – the COVID-19 pandemic has ushered in a host of interrupted routines, unforeseen challenges, and new priorities.  For businesses, understanding how these agencies are adapting and focusing their resources is critical to navigating a fast-changing regulatory environment.  This article examines the response to COVID-19 of three key federal agencies: the Department of Justice (“DOJ”), the Securities and Exchange Commission (“SEC”), and the Office of Foreign Assets Control (“OFAC”).


Related Attorney(s): Jodi Avergun, Kyle DeYoung, James Treanor
Related Practice(s): Global Litigation, White Collar Defense and Investigations
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Crime in the Time of Covid-19: The Progress of UK White-Collar Investigations and Trials During Lockdown

May 19, 2020

Regulators and enforcement agencies in the United Kingdom, while not immune to the effects of the Covid-19 pandemic, have proved to be relatively adaptable with a continued appetite for enforcement. As their counterparts in the United States, there is an emphasis on facilitating the government’s efforts to stabilise the market, and provide guidance for businesses and individuals while being vocal about a zero-tolerance policy for any pandemic-related fraud.


Related Attorney(s): Mark Beardsworth, Kevin Roberts, Shruti Chandhok
Related Practice(s): Global Litigation, White Collar Defense and Investigations
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COVID-19 Update: Federal Reserve Issues New TALF Term Sheet and Responses to Frequently Asked Questions

May 15, 2020

As part of a number of liquidity measures announced in response to the COVID-19 pandemic, the Federal Reserve re-established the Term Asset-Backed Securities Loan Facility (“TALF”) on March 23, 2020.  On April 9, 2020, the Federal Reserve released a term sheet (the “April Term Sheet”) that expanded the range of “eligible collateral” to include certain commercial mortgage-backed securities (“CMBS”) and collateralized loan obligations (“CLOs”) and clarified which businesses would qualify as “eligible borrowers.”


Related Attorney(s): Cheryl Barnes, Scott Cammarn, Sophie Cuthbertson, Michael Gambro, David Gingold, Kahn Hobbs, Gregg Jubin, Dorothy Mehta, Peter Morreale, Neil Weidner, Joseph Gambino, Peter Williams
Related Practice(s): Financial Regulation, Securitization & Asset Based Finance, TALF Task Force
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COVID-19 Update: Governor Cuomo Extends Eviction and Foreclosure Moratorium and Allows Tenants to Apply Security Deposits to the Payment of Rent

May 13, 2020

On May 7, 2020, New York State Governor Andrew Cuomo issued Executive Order 202.28 (the “New Order”) to provide additional relief to renters impacted by the COVID-19 pandemic and extended the time periods for certain other protections that had been previously granted to renters and property owners pursuant to Executive Order 202.8 (the “March 20 Order”).


Related Attorney(s): Steven Herman, Nicholas Brandfon
Related Practice(s): Real Estate
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COVID-19 Update: Federal Reserve Provides Additional Guidance on Inclusion of CLOs in New TALF Term Sheet and Responses to Frequently Asked Questions

May 13, 2020

As part of a number of liquidity measures announced in response to the COVID-19 pandemic, the Federal Reserve re-established the Term Asset-Backed Securities Loan Facility (“TALF”) on March 23, 2020.  On April 9, 2020, the Federal Reserve released an updated term sheet that expanded the range of “eligible collateral” to include certain legacy commercial mortgage-backed securities and newly-issued, static collateralized loan obligations (“CLOs”) and clarified which businesses would qualify as “eligible borrowers.”


Related Attorney(s): Joseph Beach, Scott Cammarn, David Gingold, Gregg Jubin, Nathan Spanheimer, Neil Weidner, Joseph Gambino, Danielle Katz, Adam Risell, Peter Williams
Related Practice(s): CLOs, Securitization & Asset Based Finance, TALF Task Force
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The European Banking Authority has Published its Final Guidelines on WAM

May 12, 2020

On 4 May 2020, the European Banking Authority (“EBA”) published a final report containing guidelines (EBA/GL/2020/04) (the “Guidelines”) on the use of the weighted average maturity approach (“WAM”) instead of the final legal maturity approach when calculating contractual payments due under the tranche of a securitisation transaction. This is relevant for institutions using the internal, or the external, rating-based approach for the calculation of their capital requirements under the EU Capital Requirements Regulation ((EU) 575/2013), as amended by the CRR Amending Regulation ((EU) 2017/2401) (“CRR”). CRR currently provides for tranche maturity as an additional parameter to calculate the capital requirement in respect of securitisation positions.


Related Attorney(s): Suzanne Bell, Robert Cannon, Stephen Day, Claire Puddicombe, David Quirolo, Nick Shiren, Daniel Tobias, Michael Sholem
Related Practice(s): CLOs, Financial Regulation, Securitization & Asset Based Finance
Related Office(s): London
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COVID-19 Update: Antitrust Enforcement Remains Robust Despite COVID-19

May 07, 2020

Many clients have asked about the state of federal antitrust enforcement during the current pandemic. We can tell you this: the Agencies are taking longer to clear or challenge deals, but the level of antitrust enforcement, for both merger and conduct cases, remains robust despite the investigating staff operating from home offices and kitchen tables.


Related Attorney(s): Joel Mitnick, Ngoc Hulbig
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COVID-19 Update: Meet the Special Inspector General for Pandemic Recovery

May 06, 2020

The Senate Banking Committee reconvened in person and by video on Tuesday, May 5, 2020, to hold a hearing on President Trump’s nomination of Brian D. Miller to serve as the Special Inspector General for Pandemic Recovery (“SIGPR”). Mr. Miller, a former prosecutor and Inspector General for the General Services Administration, has served as Senior Associate Counsel and Special Assistant to President Trump since December 2018. However, upon Senate confirmation, Mr. Miller will undertake an immense new role: providing independent oversight of more than $500 billion in Treasury Department funding aimed at supporting businesses and municipalities impacted by the COVID-19 pandemic.


Related Attorney(s): Jodi Avergun, Scott Cammarn, Anne Tompkins, Christian Larson, Kendra Wharton
Related Practice(s): Financial Regulation, White Collar Defense and Investigations
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COVID-19 Urgent Update: SBA Extends Safe Harbor Date to Return PPP Loans to May 14 and Other Guidance

May 06, 2020

The Small Business Administration (“SBA”), in consultation with the Treasury Department, issued FAQ #43 on May 5, 2020 extending by a week the time within which a borrower has to repay a previously issued SBA loan under the Paycheck Protection Program (“PPP”) in order to take advantage of a presumption that a borrower certified necessity for the loan in good faith at the time of the loan application.  This memo updates Cadwalader’s recent Clients & Friends Memo that provided the guidance below outlining criteria that a borrower should consider in deciding whether to return PPP funds as well as proactive steps that borrowers can take to document analysis performed in making the necessity certification whether or not funds are returned by the safe harbor deadline.


Related Attorney(s): Jodi Avergun, Scott Cammarn, Anne Tompkins, Christian Larson, Kendra Wharton
Related Practice(s): Financial Regulation, White Collar Defense and Investigations
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COVID-19 Update: Paycheck Protection Program – Secondary Market Restrictions on Whole Loan Transfers Partially Lifted

May 05, 2020

Last week, the federal government implemented two measures designed to facilitate the financing of Paycheck Protection Program (“PPP”) loans through whole loan sales. These two measures fall on the heels of guidance issued by the Small Business Administration (“SBA”) the week earlier, partially lifting existing SBA restrictions on participation transactions involving PPP loans.


Related Attorney(s): Scott Cammarn, Joseph Beach, Gregg Jubin, Peter Morreale, Lorien Golaski, Cassidy Nolan
Related Practice(s): Financial Regulation, Securitization & Asset Based Finance
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Booking.com – Justices Persevere through First-Ever Conference Call Oral Argument to Hear Arguments as to Registrability of .Com Trademarks

May 05, 2020

On Monday, May 4, 2020, for the first time in its 231-year history, the Supreme Court heard oral arguments through a telephone conference call, allowing the attorneys to present arguments while complying with shelter-in-place orders.  The case, U.S. Patent and Trademark Office v. Booking.com, No. 19-46, is also historically significant, given that it is the first time the Supreme Court has heard arguments on the issue of generic trademarks since the enactment of the Lanham Act in 1946.


Related Attorney(s): John Moehringer, Dash Cole
Related Practice(s): Global Litigation, Intellectual Property
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COVID-19 Update: The European Commission Proposes Urgent Amendments to the EU Capital Requirements Regulation

May 04, 2020

On 28 April 2020, the European Commission (the “Commission”) proposed a new Regulation to make targeted amendments to the EU Capital Requirements Regulation (575/2013) (“CRR”) and the CRR II Regulation ((EU) 2019/876) (“CRR II”) in response to the COVID-19 pandemic. Subject to the EU legislative process operating as anticipated, it is expected that these changes will apply in the UK until the end of the Brexit transition period (currently scheduled to end on 31 December 2020), although these changes will also be reflected in the UK “onshored” version of CRR which will apply after the end of the transition period. 


Related Attorney(s): Suzanne Bell, Robert Cannon, Stephen Day, Claire Puddicombe, David Quirolo, Nick Shiren, Daniel Tobias, Michael Sholem
Related Practice(s): CLOs, Financial Regulation, Securitization & Asset Based Finance
Related Office(s): London
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COVID-19 Update: These Are Not the Droids You’re Looking For: The “Wrong” Type of PPP Borrowers May Need to Repay Their Loans or Prepare for an Audit

May 04, 2020

On this May the Fourth (Be With You), many Paycheck Protection Program (“PPP”) borrowers may be grappling with a difficult question: At the time of loan application, was the company the type of borrower the Small Business Administration (“SBA”) was looking for? Specifically, given that the Treasury Department’s prior guidance on the standards for obtaining a PPP loan were at best vague and at worst inconsistent with current guidance, was the borrower’s certification that the PPP loan was “necessary” made in good faith? 


Related Attorney(s): Jodi Avergun, Scott Cammarn, Anne Tompkins, Christian Larson, Kendra Wharton
Related Practice(s): Financial Regulation, White Collar Defense and Investigations
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COVID-19 Update: Prudential Regulatory Treatment of UK Business Interruption Loan Schemes (CBILS & CLBILS)

May 01, 2020

On 27 April 2020, the UK Prudential Regulation Authority (“PRA”) published a statement (the “statement”) on whether the guarantees provided by the UK Government (through the British Business Bank) under the Coronavirus Business Interruption Loan Scheme (“CBILS”) and the Coronavirus Large Business Interruption Loan Scheme (“CLBILS”) are eligible for recognition as unfunded credit risk mitigation (“CRM”) under the EU Capital Requirements Regulation (the “CRR”). The CRR continues to apply in the UK until the end of the Brexit transition period (currently scheduled to end on 31 December 2020).


Related Attorney(s): Suzanne Bell, Robert Cannon, Stephen Day, Claire Puddicombe, David Quirolo, Nick Shiren, Daniel Tobias, Michael Sholem
Related Practice(s): Financial Regulation, Securitization & Asset Based Finance
Related Office(s): London
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COVID-19 Update: The Paycheck Protection Program and the Concept of “Necessity”

April 30, 2020

In response to Cadwalader’s recent Clients & Friends Memo, Federal Investigators Prepare to Investigate and Prosecute Fraud in Emergency Loan Programs, Cadwalader has heard from a number of borrowers under the CARES Act’s Paycheck Protection Program (PPP) who are now questioning whether the loan they took was “necessary.” This Clients & Friends Memo lays out the state of play regarding loan “necessity” under the PPP and steps companies can take to reduce their risk of audit and investigation.


Related Attorney(s): Jodi Avergun, Scott Cammarn, Anne Tompkins, Christian Larson, Kendra Wharton
Related Practice(s): Financial Regulation, White Collar Defense and Investigations
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European Commission Consultation on the Renewed Sustainable Finance Strategy

April 28, 2020

On 8 April 2020 the European Commission published a consultation paper on its renewed sustainable finance strategy (the “Sustainability Strategy”). The Sustainability Strategy is a policy framework forming a key part of the European Green Deal, the EU’s roadmap to making the EU’s economy sustainable, including reducing net greenhouse gas emission to zero by 2050. Despite the inevitable recent shift of focus to measures dealing with the COVID-19 crisis, this remains a top EU priority and the outcome of this consultation may significantly affect the corporate law applicable to European businesses, investors and directors in the near term.


Related Attorney(s): Joanna Valentine, Michael Sholem, Christopher Smith
Related Practice(s): Corporate, Financial Regulation
Related Office(s): London
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COVID-19 Update: The Paycheck Protection Program – Loan Participation Transactions

April 26, 2020

On Friday, April 24, 2020, the Small Business Administration (“SBA”) addressed some of the confusion regarding secondary market transactions involving Paycheck Protection Program (“PPP”) loans, at least with respect to participation transactions.  In a Procedural Notice to SBA and PPP lenders, the SBA announced that it was lifting certain restrictions on participation transactions involving such PPP loans.


Related Attorney(s): Scott Cammarn, Joseph Beach, Gregg Jubin, Peter Morreale, Lorien Golaski, Cassidy Nolan
Related Practice(s): Financial Regulation, Securitization & Asset Based Finance
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COVID-19 Update: Don’t Be a Target: What Business Should Know about State Attorney General Reactions to COVID-19

April 24, 2020

In any time of crisis, there is heightened risk for fraud and scams. While United States Attorney General Barr has warned of scams and other illegal acts on the federal level, it is with the state Attorneys General (“AGs”) where the rubber hits the road in enforcing social distancing orders, investigating companies for alleged price gouging, continuing ongoing investigations, and overseeing lending relief efforts. As the economy begins to reopen on a state-by-state and sector-by-sector basis, companies must be vigilant in protecting themselves from the next wave of scrutiny by state AGs.


Related Attorney(s): Douglas Gansler, Cheryl Risell
Related Practice(s): Global Litigation, State Attorneys General Practice, White Collar Defense and Investigations
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COVID-19 Update: Federal Investigators Prepare to Investigate and Prosecute Fraud in Emergency Loan Programs

April 24, 2020

Emergency COVID-19 relief legislation signed into law by President Trump, including the Coronavirus Aid, Recovery, and Economic Security Act (“CARES Act”), has allocated more than $2 trillion in economic aid to individuals, businesses, non-profits and government entities adversely impacted by the pandemic. Two primary components of the relief legislation are the Paycheck Protection Program (“PPP”) and the Economic Injury Disaster Loan Program (“EIDL”) administered by the Small Business Administration (“SBA”), which have already supported millions of forgivable and low-interest loans to eligible small businesses and non-profits. 


Related Attorney(s): Jodi Avergun, Anne Tompkins, Kendra Wharton, Christian Larson
Related Practice(s): Global Litigation, White Collar Defense and Investigations
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COVID-19 Update: Restrictions on Short Selling in the UK and European Union - An Update

April 22, 2020

Five EU member states have extended their temporary bans on short selling imposed in line with the emergency process permitted by the EU Short Selling Regulation, despite increased pressure from hedge funds to remove the current restrictions. Regulators in Austria, Belgium, France, Greece and Spain have now extended the bans (which were due to expire in the coming days) until mid-May, arguing that the restrictions are necessary to stabilise stock prices. Italy’s ban will also continue until mid-June.


Related Attorney(s): Michael Sholem, Mark Highman, Joanna Valentine, Christopher Smith
Related Practice(s): Corporate, Financial Regulation
Related Office(s): London, New York
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COVID-19 Update: UK Government Launches Convertible Loan Scheme for Start-Ups; Announces Additional Funding for Innovate UK

April 22, 2020

On 20 April 2020, the UK Treasury announced a support package aimed at helping start-ups whose businesses are facing financial difficulties due to the COVID-19 pandemic. “Future Fund” is being created, pursuant to which the government will offer convertible bridging loans of £125,000 - £5 million to eligible high-growth companies, provided the government investment is matched by private money. The total size of the government’s initial commitment to Future Fund is £250 million. It will initially be open from May until the end of September, and the scale of the fund will be kept under review. In addition, £750 million is being added to the existing Innovate UK program, which is a scheme providing grants and loans to small and medium-sized firms focused on R&D.


Related Attorney(s): Joanna Valentine, Michael Sholem, Christopher Smith
Related Practice(s): Corporate, Financial Regulation
Related Office(s): London
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Overview of the European Sustainability Taxonomy Regulation

April 21, 2020

On 15 April 2020, the Council of the European Union published a press release stating that it had reached political agreement on the regulation on the establishment of an EU-wide framework designed to facilitate sustainable investment through a common classification system for sustainable activity (the “Taxonomy Regulation”).


Related Attorney(s): Joanna Valentine, Michael Sholem, Christopher Smith
Related Practice(s): Corporate, Financial Regulation
Related Office(s): London
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COVID-19 Update: The Impact of COVID-19 on Financial Contracts

April 20, 2020

The current market volatility arising from the restrictions imposed to reduce the risk of spread of COVID-19 has led many market participants to consider their position under existing contractual relationships, including, assessing their own obligations and whether any potential or actual event of default has occurred in respect of their counterparty. This memo illustrates practical issues to be taken into account by a counterparty to a financial contract in making these considerations using, as an example, a derivative transaction.


Related Attorney(s): Melis Acuner, Nick Shiren, Assia Damianova, Emma Farrow
Related Practice(s): CLOs, Global Litigation, Securitization & Asset Based Finance
Related Office(s): London
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COVID-19 Update: FCA Sends “Dear CEO” Letter to UK Banks on Lending to SMEs and Responsibilities of Senior Managers

April 17, 2020

On 15 April 2020, the UK Financial Conduct Authority (“FCA”) published a “Dear CEO” letter sent to the leaders of UK banks on lending to small and medium-sized enterprises (“SMEs”) during the COVID-19 pandemic.


Related Attorney(s): Suzanne Bell, Robert Cannon, Stephen Day, Claire Puddicombe, David Quirolo, Nick Shiren, Daniel Tobias, Michael Sholem
Related Practice(s): CLOs, Financial Regulation, Securitization & Asset Based Finance
Related Office(s): London
read more »

COVID-19 Update: Banking Agencies Issue Temporary Deferral of Appraisals and Evaluations for Real Estate Transactions

April 17, 2020

On April 14, 2020, the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation issued an interim final rule to temporarily defer real estate appraisals and evaluations under interagency appraisal rules.


Related Attorney(s): Steven Herman, Scott Cammarn, Nicholas Brandfon
Related Practice(s): Financial Regulation, Real Estate
read more »

COVID-19 Update: Federal Reserve Announces Main Street Lending Program

April 16, 2020

On April 9, 2020, the Federal Reserve established a $600 billion lending program to aid small and medium-sized businesses affected by the COVID-19 pandemic. The new initiative—the Main Street Lending Program—will purchase qualifying loans from lenders that lend to U.S. businesses with up to 10,000 employees or up to $2.5 billion in 2019 annual revenues. Firms that have taken advantage of the Small Business Administration’s previously announced Paycheck Protection Program are eligible to participate in the Main Street program.


Related Practice(s): Financial Regulation
read more »

COVID-19 Update: Anticipating Securities Litigation in Response to the Pandemic

April 16, 2020

As COVID-19 has continued to spread globally, U.S. and foreign markets have been dramatically impacted, leading to the largest declines in stock prices since the 2008 credit crisis.  Given the extreme market volatility associated with the ongoing COVID-19 pandemic, a significant rise in stock-drop securities litigation seems likely.  This is particularly so given the pre-existing trend of increased securities class action filings, even before the onset of COVID-19.  Indeed, investors already have filed at least two civil suits alleging that a public company violated the federal securities laws by making misleading public statements concerning COVID-19.  Others almost surely will follow.


Related Attorney(s): Nathan Bull, Jason Halper, Victor Celis, Hyungjoo Han, Matthew Karlan, James Orth
Related Practice(s): Global Litigation
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COVID-19 Update: Revisiting Pre-Negotiation Agreements in the Era of Covid-19

April 16, 2020

While the ramifications of the Covid-19 pandemic for real estate lenders and borrowers will unfold over time, at this point we know that lenders and borrowers will be communicating frequently and extensively regarding potential loan modifications and other accommodations.  Lenders are well advised to insist on a pre-negotiation agreement, often referred to as a “PNA,” as a prerequisite to these communications.


Related Attorney(s): Steven Herman, Michael Anglin
Related Practice(s): Real Estate
read more »

COVID-19 Update: FCA Publishes Final Guidance on Temporary Financial Relief for Consumer Credit Customers Affected by COVID-19

April 15, 2020

As discussed in a previous clients and friends memorandum, on 2 April 2020, the UK Financial Conduct Authority (“FCA”) proposed a number of temporary measures designed to support users of certain consumer credit products during the adverse economic conditions in the UK generated by the COVID-19 pandemic. Following a very short consultation period, the FCA published its final guidance for firms on 9 April 2020.


Related Attorney(s): Suzanne Bell, Robert Cannon, Stephen Day, David Quirolo, Michael Sholem
Related Practice(s): CLOs, Financial Regulation, Securitization & Asset Based Finance
Related Office(s): London
read more »

COVID-19 Update: COVID-19 and the Courts: Part II How Appellate Court Procedures Are Changing and What May Be Here to Stay

April 15, 2020

In the second of our series of articles examining emergency procedures in the wake of the COVID‑19 pandemic (“pandemic”), we examine the emergency procedures put into place in Federal Appellate Courts and explore which changes may disappear as the pandemic wanes and which are likely to stick around.  


Related Attorney(s): Christopher Hughes, Bradley Small, Jessica Talar, Monica Martin
Related Practice(s): Global Litigation, Intellectual Property
read more »

COVID-19 Update: Federal Reserve Announces Municipal Liquidity Facility

April 15, 2020

The Federal Reserve has announced the Municipal Liquidity Facility (the “MLF”) to provide liquidity to state and local governmental authorities affected by the COVID-19 pandemic.  The MLF, which is established pursuant to the Federal Reserve’s emergency lending authority under Section 13(3) of the Federal Reserve Act, will lend up to $500 billion to “Eligible Issuers” through September 30, 2020, subject to extension.


Related Attorney(s): Scott Cammarn, Ivan Loncar, Jed Miller, Lary Stromfeld, Nihal Patel, Owen Omoregie, Danielle Wheeler
Related Practice(s): Financial Regulation
read more »

COVID-19 Update: The Paycheck Protection Program and the Secondary Market

April 13, 2020

Last week, the Board of Governors of the Federal Reserve System (the “Federal Reserve”), the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (collectively, the “Banking Agencies”) adopted two measures to facilitate aid to small business employees under the CARES Act.


Related Attorney(s): Scott Cammarn, Joseph Beach
Related Practice(s): Financial Regulation, Securitization & Asset Based Finance
read more »

COVID-19 Update: IRS Issues Securitization Guidance on Coronavirus-Related Forbearances

April 13, 2020

On April 13, 2020, the Internal Revenue Service issued a helpful revenue procedure that permits loans that are subject to certain forbearances and related modifications as a result of the COVID-19 pandemic to be contributed to, and held in, real estate mortgage investment conduits (REMICs) and grantor trusts without jeopardizing these vehicles’ U.S. tax status.


Related Attorney(s): Jason Schwartz, Gary Silverstein, Linda Swartz
Related Practice(s): Tax
read more »

COVID-19 Update: ISS Provides Policy Guidance on Limited Duration Poison Pills to Address the Impact of COVID-19

April 10, 2020

On April 8, 2020, Institutional Shareholder Services (“ISS”) published guidance on its voting policies in light of the market-wide effects of the COVID-19 pandemic.  While ISS maintains that its existing policies are sufficiently flexible to take into account the impact of COVID-19 on a case-by-case basis, ISS provided more specific guidance on certain issues, including shareholder rights plans, stating that plans with a duration of less than one year will likely be justified in most cases given the impact of the pandemic on stock prices.


Related Attorney(s): William Mills, Braden McCurrach, Peter Bariso
Related Practice(s): Corporate
read more »

COVID-19 Update: Federal Reserve Broadens Range of Eligible Collateral for Term Asset-Backed Securities Loan Facility (TALF)

April 09, 2020

On April 9, 2020, the Federal Reserve unveiled an array of additional programs to bolster the U.S. economy in response to the COVID-19 pandemic. One of those programs is aimed at expanding the coverage of the Federal Reserve’s previously announced Term Asset- Backed Securities Loan Facility (TALF). TALF is a facility intended to help lenders meet the credit needs of households and U.S. businesses by supporting the issuance of asset-backed securities.


Related Attorney(s): Lisa Pauquette, Noah Allen
Related Practice(s): Securitization & Asset Based Finance, TALF Task Force
read more »

COVID-19 Update: NYSE Temporarily Waives Certain Shareholder Approval Requirements

April 09, 2020

In order to provide temporary relief to listed companies that may have urgent liquidity needs as a result of the market disruption caused by COVID-19, the New York Stock Exchange has (i) partially waived its shareholder approval requirement for issuances of stock to a “related party” when the number of new shares to be issued is more than 1% of total share volume or voting power and (ii) expanded the existing exception to its shareholder approval requirement for transactions involving the issuance of 20% or more of the company’s outstanding common stock or 20% of the voting power outstanding before such issuance, other than a public offering for cash. The waivers are effective immediately and will remain in effect through June 30, 2020.


Related Attorney(s): William Mills, Braden McCurrach, Chelsea Donenfeld
Related Practice(s): Corporate
read more »

COVID-19 Update: When Computers Invent: How the Use of Artificial Intelligence to Treat COVID-19 Highlights Novel Inventorship Issues

April 08, 2020

Technology and medical companies around the world are rising to meet the challenges created by the COVID-19 pandemic, in many cases turning to artificial intelligence (“AI”) and super computers in their efforts to develop life-saving treatments for the disease as quickly as possible. In late March, the White House announced the launch of the COVID-19 High Performance Computing Consortium to bring together industry leaders in AI with national laboratories and academics to “significantly advance the pace of scientific discovery in the fight to stop the virus.”


Related Attorney(s): John Moehringer, Danielle Tully, Michael Powell, Maegan Fuller, Jaclyn Hellreich
Related Practice(s): Global Litigation, Intellectual Property
read more »

COVID-19 Update: FCA Proposals on Temporary Financial Relief for Consumer Credit Customers Affected by COVID-19

April 07, 2020

On 2 April 2020, the UK Financial Conduct Authority (“FCA”) proposed a number of temporary measures designed to support users of certain consumer credit products during the adverse economic conditions in the UK generated by the COVID-19 pandemic. These proposals provide guidance to FCA regulated providers of credit cards, retail revolving credit facilities, arranged overdrafts and personal loans. The FCA decided to consult for an unusually short period on these proposals, with the consultation closing at 9:00 a.m. on 6 April 2020. The FCA intends for these measures to come into effect on 9 April 2020.


Related Attorney(s): Suzanne Bell, Robert Cannon, Stephen Day, David Quirolo, Michael Sholem
Related Practice(s): CLOs, Financial Regulation, Securitization & Asset Based Finance
Related Office(s): London
read more »

COVID-19 Update: COVID-19 and the Courts How Court Procedures Across the Country Are Changing and What May Be Here To Stay

April 07, 2020

Americans are no stranger to calamitous events—whether human-induced (e.g., the 2008 financial crisis) or nature-induced (e.g., Superstorm Sandy)—and the immediate, and often long-term, changes which result. Currently, we face a disastrous pandemic not experienced by generations of Americans and it is causing profound changes in virtually every facet of life—health, personal mobility, business disruption, financial hardship, etc. The aim of this series of articles is to explore the numerous and varied procedural changes occurring in the legal system and to attempt to project those that may persist, even if in modified form, once the emergency is declared over.


Related Attorney(s): Christopher Hughes, Bradley Small, Jessica Talar
Related Practice(s): Global Litigation, Intellectual Property
read more »

COVID-19 Update: Extraordinary Measures in Extraordinary Times: The Federal Reserve Responds to the Coronavirus Pandemic

April 03, 2020

The Federal Reserve has established a number of programs to provide targeted support to the corporate credit, asset-backed securities, money market and commercial paper markets in light of the evolving coronavirus disease 2019 (COVID-19) pandemic. In broad strokes, these temporary programs backstop markets through the purchase or financing of highly rated securities. In this memorandum, we review the mandate and key terms of each program.


Related Attorney(s): Scott Cammarn, Joseph Beach, Chris van Heerden
Related Practice(s): Financial Regulation, Securitization & Asset Based Finance, TALF Task Force
read more »

COVID-19 Update: What Are the Effects on the SEC’s Enforcement Program?

April 03, 2020

In response to the COVID-19 crisis, the SEC has sought to reassure investors and the financial industry that it is maintaining its investor protection and enforcement efforts.  In a statement setting out the Commission’s initial response to the crisis, issued on March 20, the SEC pledged that its enforcement and examination programs will continue to execute their missions and are fully operational.


Related Attorney(s): Kyle DeYoung, Lex Urban
Related Practice(s): Global Litigation, White Collar Defense and Investigations
read more »

COVID-19 Update: Litigation, Incarceration, and Investigation in the Time of COVID-19

April 03, 2020

In ways unimagined less than three weeks ago, the face of in-court litigation in civil and criminal matters transformed seemingly overnight and continue at near breakneck speed. The following article describes the key changes trial lawyers and their clients are likely to experience as the impact of COVID-19 continues to increase unabated.


Related Attorney(s): Jodi Avergun, Kevin Roberts, Lex Urban, Duncan Grieve, Rachel Ross, Stephen Weiss, Wesley Wintermyer
Related Practice(s): Global Litigation, White Collar Defense and Investigations
read more »

COVID-19 Update: Cybersecurity and Data Privacy Best Practices Remain Critical During the Coronavirus Pandemic

April 03, 2020

With much of the nation’s workforce transitioning to telework for the foreseeable future, hackers and scammers are lurking to take advantage of technical vulnerabilities and anxious targets.  As companies amass—and create new repositories of—personal and health information for employees and customers as a result of the coronavirus (COVID-19) pandemic, adherence to cyber and data privacy best practices remains critically important.  Companies, firms, employees, and consumers are increasingly relying on home networks, virtual workspaces, videoconferencing, and other forms of remote work practices, further opening the door to cyber concerns.


Related Attorney(s): Keith Gerver, Hyungjoo Han, Stephen Weiss
Related Practice(s): Global Litigation, White Collar Defense and Investigations
read more »

COVID-19 Update: The SBA’s Paycheck Protection Program Explained

April 03, 2020

On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act (the “Act”) into law following the Act’s approval by both chambers of Congress.  The Act amends Section 7(a) of the Small Business Act to include a new guaranteed, unsecured loan program (the “Paycheck Protection Program”).  The Paycheck Protection Program is an expansion of the Small Business Administration (the “SBA”) Economic Injury Disaster Loan program.  The program provides for $349 billion to support loans to a broader segment of small businesses than those that would otherwise be eligible to receive SBA 7(a) loans. 


Related Attorney(s): Scott Cammarn, Joseph Beach, Lorien Golaski, Bonnie Neuman
Related Practice(s): Financial Regulation, Real Estate, Securitization & Asset Based Finance
read more »

COVID-19 Update: Practical Guide to Electronic Signatures

April 01, 2020

The COVID-19 pandemic has unexpectedly required lawyers and, in many circumstances, judges to attempt to operate in a remote work environment.  This abrupt change has heightened the importance of relying on electronic signatures and notarization, in lieu of traditional “wet ink.”  This article discusses the applicable laws and practical guidance for ensuring valid e-signatures and notarizations.


Related Attorney(s): Mary Elizabeth Taylor, Gillian Burns, Bradley Small
Related Practice(s): Global Litigation
read more »

COVID-19 Update: Are You For Real? Due Diligence in the Age of Coronavirus

April 01, 2020

In the context of COVID-19, there are significant challenges involved in conducting due diligence: hard-copy documents are inaccessible, in-person meetings have moved online, and on-site visits may be impossible.  Companies nonetheless can and should continue to comply with the law by adjusting policies and procedures, mitigating new risks that arise through the use of alternative diligence methods, and by staying abreast of changing regulatory expectations.


Related Attorney(s): Jodi Avergun, James Treanor, Christian Larson, William Simpson, Tammy Tran
Related Practice(s): Global Litigation, White Collar Defense and Investigations
read more »

COVID-19 Update: Competitor Collaborations in the time of COVID-19

April 01, 2020

The Antitrust Division of the U.S. Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”) jointly announced on March 24, 2020, an expedited antitrust review process for proposed collaborative efforts aimed at protecting the health and safety of Americans during the COVID-19 pandemic. The agencies have committed to reviewing all proposed collaborations submitted to the DOJ’s Business Review Letter procedure and the FTC’s Staff Advisory Opinion procedure within seven calendar days of receiving all necessary information (both processes generally take several months). The DOJ and FTC also pledged to&

Related Attorney(s): Joel Mitnick, Ngoc Hulbig
Related Practice(s): Global Litigation
read more »

COVID-19 Update: Protecting Trade Secrets In The Midst Of The COVID-19 Pandemic

April 01, 2020

Millions of Americans and others around the globe have been told to work from home in order to blunt the spread of COVID-19. In short order, companies have been faced with unprecedented strain on internal networks and demands from employees to access confidential business information from home. While the COVID-19 Pandemic presents serious challenges to public health and the economy, the extraordinary access of confidential business information at home should present a lurking concern for companies, since employees themselves are typically the largest source of trade secret misappropriation. Moreover, cybercriminals may prey on employees inexperienced with working from home and those who fail to follow proper cyber-hygiene.


Related Attorney(s): John Moehringer, Danielle Tully, Michael Powell
Related Practice(s): Global Litigation, Intellectual Property
read more »

COVID-19 Update: Coronavirus Bill Radically Overhauls the Use of Video / Telephone Facilities in UK Criminal Proceedings

March 31, 2020

The Coronavirus Bill 2020 (the “Bill”) received Royal Assent and passed into law on Wednesday, 25 March 2020. Amongst a wide range of emergency measures, the Bill includes urgently-needed provisions allowing for the greater use of video and telephone communication in UK criminal court proceedings. The Bill updates several pieces of legislation including the Criminal Justice Act 2003, the Crime and Disorder Act 1998 and the Criminal Procedure Rules (“CrimPR”).


Related Attorney(s): Kevin Roberts, Duncan Grieve
Related Practice(s): Global Litigation, White Collar Defense and Investigations
Related Office(s): London
read more »

COVID-19 Update: Planned Changes to UK Insolvency Laws to Enable Companies to Continue Trading

March 31, 2020

On Saturday 28 March 2020, the Business Secretary, Alok Sharma, announced that the UK government would be introducing legislation to make changes to existing insolvency laws in response to COVID-19. The new measures seek to enable companies undergoing a rescue or restructuring process to continue trading and help them avoid insolvency, and include a temporary suspension of wrongful trading provisions retrospectively from 1 March 2020 for three months. This in particular will be welcome to directors who may be weighing the potential for personal liability when considering taking on Government or bank funding. Legislation to introduce these changes will be introduced in Parliament at the earliest opportunity, although the exact timing remains uncertain – Parliament is currently in recess until 21 April 2020.


Related Attorney(s): Joanna Valentine, Richard Nevins, Jeremy Cross, Nathan Parker, Christopher Smith
Related Practice(s): Corporate, Financial Restructuring, Fund Finance
Related Office(s): London
read more »

COVID-19 Update: NYSE and Nasdaq Consider Impact of COVID-19

March 31, 2020

In light of the market-wide declines caused by the COVID-19 pandemic, on March 19, 2020, the New York Stock Exchange filed with the Securities and Exchange Commission a proposed suspension of its listing requirement that companies must maintain an average global market capitalization over a consecutive 30 trading-day period of at least $15 million (the “Market Cap Standard”).  On March 20, 2020, the SEC granted NYSE’s proposed suspension of the Market Cap Standard until June 30, 2020, and also designated the suspension operative upon NYSE’s filing, thereby waiving the standard 30-day operative delay of proposed rule changes.  Additionally, on March 26, 2020, the Nasdaq Stock Market announced that it will consider the effects of COVID-19 in its review of requests for financial viability exceptions to Nasdaq’s shareholder approval rules.


Related Attorney(s): William Mills, Gregory Patti, Braden McCurrach, Chelsea Donenfeld
Related Practice(s): Corporate
read more »

COVID-19 Update: Banking Agencies Delay CECL Capital Impacts

March 31, 2020

On March 27, 2020, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (collectively, the “Agencies”) issued an interim final rule that allows banking organizations to mitigate the effects of the “current expected credit loss” (“CECL”) accounting standard in their regulatory capital.


Related Attorney(s): Scott Cammarn
Related Practice(s): Financial Regulation
read more »

COVID-19 Update: The UK Government and Regulators Respond to the COVID-19 Pandemic

March 30, 2020

On 25 March 2020, the UK Government published a letter sent by the Chancellor of the Exchequer, the Governor of the Bank of England and the CEOs of the UK Prudential Regulation Authority (“PRA”) and the UK Financial Conduct Authority (“FCA”) to leaders of UK banks (the “Joint Letter”), addressing the impact of COVID-19 on the UK economy and bank lending. The letter highlighted action taken in concert between the UK Government, the regulators and banks to address the economic impact of the COVID-19 pandemic.


Related Attorney(s): Michael Sholem, David Quirolo, Adam Blakemore, Joanna Valentine, Oliver Bond
Related Practice(s): Corporate, Financial Regulation, Securitization & Asset Based Finance, Tax
Related Office(s): London
read more »

COVID-19 Update: Key Provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act

March 30, 2020

On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act (the “Act”) into law following the Act’s approval by both chambers of Congress.  The Act is aimed at reducing the economic impact of the novel coronavirus 2019 (“COVID-19”) pandemic and authorizes $2.1 trillion in aid to various sectors of the economy.


Related Attorney(s): Andrew Alin, Joseph Beach, Richard Brand, Scott Cammarn, Sophie Cuthbertson, Michael Gambro, Chris Gavin, Christopher Hughes, Vivian Maese, Braden McCurrach, William Mills, John Moehringer, Jason Schwartz, Linda Swartz, David Teigman
Related Practice(s): Corporate, Financial Regulation, Intellectual Property, Securitization & Asset Based Finance, Tax
read more »

Delaware Supreme Court Rejects Challenge to Federal Forum Provisions Requiring Securities Act Claims to Be Brought in Federal Court

March 30, 2020

On March 18, 2020, the Delaware Supreme Court issued its unanimous decision in Salzberg v. Sciabacucchi, authored by Justice Karen L. Valihura, in which it reversed the Court of Chancery and rejected a facial challenge to provisions in the charters of three Delaware corporations that require any claims brought against each company under the Securities Act of 1933 (the “1933 Act”) to be filed in federal court (“federal forum provisions” or “FFPs”).


Related Attorney(s): Jason Halper, Nathan Bull, Matthew Karlan, Charles Hurley
Related Practice(s): Global Litigation
read more »

COVID-19 Update: Coronavirus-Related REMIC Considerations

March 30, 2020

The COVID-19 pandemic has created significant headwinds for mortgage loans.  Loan forbearances and workouts raise tax complexities for real estate mortgage investment conduits (REMICs), which are the most common vehicles for securitizing mortgage loans.  With careful planning, REMICs can continue to be highly useful during these difficult times.  This alert explores the feasibility of continuing to use REMICs to securitize mortgage loans subject to forbearance and potential default as a result of the pandemic.


Related Attorney(s): Jason Schwartz, Gary Silverstein, Linda Swartz
Related Practice(s): Tax
read more »

COVID-19 Update: Patent Rights in the COVID-19 Pandemic: How will Industries and Governments Respond?

March 27, 2020

As the world scrambles to address an ever-expanding wave of COVID-19 infections, new and urgent needs for medical supplies, diagnostics and treatments arise.  Shortages of such supplies are plaguing hospitals and care-givers, while doctors and nurses put their lives at risk in their desperate efforts to save COVID-19 patients.  Many of these vital supplies, however, are protected by valuable patent rights.  The essence behind patents rights is to exclude others from making, using, or selling a patented invention, except by authorization of the patent holder in carefully negotiated license agreements to ensure proper compensation for the efforts and costs invested in developing the patented invention.  On the other hand, the U.S. government has rights to forcibly license a patented invention during times of need, in particular when there is a threat to public safety.


Related Attorney(s): Dorothy Auth Ph.D.
Related Practice(s): Global Litigation, Intellectual Property
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En Banc Federal Circuit Declines To Address The Constitutionality Of Administrative Patent Judges And The Constitutional Remedy Of Severance, Potentially Setting Up Supreme Court Review

March 27, 2020

On March 23, 2020, the Federal Circuit denied the petitions for rehearing en banc filed in Arthrex v. Smith & Nephew, a decision which found the appointment of Administrative Patent Judges (“APJs”) unconstitutional under the Appointments Clause of the U.S. Constitution, and which severed their employment protections to cure the violation. This denial of en banc review follows a similar denial on January 31, 2020, for en banc review of Polaris v. Kingston another case dealing with the same constitutional questions concerning APJs and the remedy of severance.


Related Attorney(s): John Moehringer, Danielle Tully, Michael Powell, Jessica Talar
Related Practice(s): Intellectual Property
Related Office(s): New York
read more »

COVID-19 Update: Thoughts on Force Majeure and Impossibility of Performance

March 26, 2020

Force majeure clauses are provisions in contracts that either defer or release parties from contractual obligations due to specific circumstances beyond the control of the breaching party.  Such clauses allocate the risks of certain unforeseeable events that might result in a party’s nonperformance and in each case are (or at least should be) highly tailored to the nature of the transaction. Qualifying events that constitute force majeure, the contractual obligations to which the clause is applicable, as well as the rights and obligations of the parties upon the occurrence of such an event in order to invoke a force majeure defense, are specifically defined in and limited by the agreed upon terms of the force majeure clause.


Related Attorney(s): Steven Herman, Amanda Reasoner
Related Practice(s): Real Estate
read more »

COVID-19 Update: DOJ and FTC Launch Expedited Review Process for COVID-19-Related Collaborative Efforts

March 26, 2020

The Antitrust Division of the U.S. Department of Justice (the “Division”) and the Federal Trade Commission (“FTC”) have jointly announced an expedited process for the review of proposed collaborative efforts to deal with the COVID-19 pandemic.  The March 24 joint statement recognizes that addressing the spread of the virus will require “unprecedented cooperation . . . among businesses to protect America’s health and safety.”  Both agencies are “committed to providing individuals and businesses in any sector of the economy that are responding to this national emergency expeditious guidance about how to ensure their efforts comply with the federal antitrust laws.”


Related Attorney(s): Peter Moll, Brian Wallach, Gregory Langsdale, Lindsay Barnes
Related Practice(s): Global Litigation
read more »

COVID-19 Update: Restrictions on Short Selling in the UK and European Union

March 25, 2020

Background on the Short Selling Regulation
European Union (“EU”) national regulators have regulated the short selling of shares and certain aspects of credit default swaps (“CDS”) since 1 November 2012, under the EU Short Selling Regulation (“SSR”). The SSR applies to any person undertaking short selling of shares, sovereign debt, sovereign CDS and related instruments that are admitted to trading or traded on an EU trading venue. It also prohibits the entry into uncovered sovereign credit default swaps. The SSR does not relate to repos, securities lending, corporate and convertible bonds, although note that national regulators have powers (under Articles 18 to 21 of the SSR) to impose short selling restrictions on any financial instrument, if there is a serious threat to financial stability or to market confidence.


Related Attorney(s): Michael Sholem, Assia Damianova, Michael Newell, Joanna Valentine
Related Practice(s): Corporate, Financial Regulation, Securitization & Asset Based Finance
Related Office(s): London
read more »

COVID-19 Update: DFS Releases Emergency Regulation on Forbearance Actions

March 25, 2020

The New York State Department of Financial Services (“DFS”) has issued an emergency regulation on Governor Andrew Cuomo’s Executive Order No. 202.9 from March 21 (the “Executive Order”).  As discussed in our memorandum from March 23, the Executive Order temporarily requires, among other things, that banks subject to the jurisdiction of the DFS grant 90-day forbearance relief to “any person or business who has a financial hardship as a result of the COVID-19 pandemic.”  The Executive Order has sparked a flurry of questions within the lending market as to the scope of parties and products covered by its terms.


Related Attorney(s): Scott Cammarn
Related Practice(s): Financial Regulation
read more »

COVID-19 Update: SEC Guidance on Shareholder Meetings and Filing Deadline Extensions in Light of COVID-19 Concerns

March 23, 2020

In light of the recent COVID-19 global outbreak, on March 13, 2020, the Securities and Exchange Commission provided guidance to assist issuers, shareholders and other market participants affected by COVID-19 with meeting their obligations under the federal proxy rules. Additionally, on March 4, 2020, the SEC issued an order that, subject to certain conditions, provides publicly traded companies with an additional 45 days to file certain disclosure reports that otherwise would have been due between March 1 and April 30, 2020. On March 25, 2020, the SEC issued an order modifying the filing deadline extensions to cover filings due on or before July 1, 2020.


Related Attorney(s): William Mills, Gregory Patti, Braden McCurrach, Chelsea Donenfeld
Related Practice(s): Corporate
read more »

COVID-19 Update: New York Governor Issues Executive Order on Forbearance Actions

March 23, 2020

On March 21, New York State Governor Andrew Cuomo signed an executive order declaring that, in light of the COVID-19 pandemic, any bank that is subject to the jurisdiction of the New York State Department of Financial Services (“DFS”) shall be deemed to be engaging in an “unsafe and unsound business practice” under Section 39 of the New York Banking Law if the bank fails to grant a 90-day forbearance to any person or business with a financial hardship as a result of the pandemic.  The executive order is already effective and extends through April 20, 2020. 


Related Attorney(s): Scott Cammarn
Related Practice(s): Financial Regulation
read more »

COVID-19 Update: The Effects of COVID-19 on U.S. Antitrust Merger Clearance and Potential Delays in Transaction Closings

March 23, 2020

As businesses and government agencies continue to take measures in response to the new coronavirus, one area of notable change is the federal merger clearance process.  On March 13, the Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”) implemented a temporary e-filing system for premerger notification documents and announced that, beginning on March 16, (1) they no longer would accept hard-copy filings and (2) early termination would not be granted for any filing as long as the e-filing system remained in place.  As part of these efforts to limit the further spread of the coronavirus, the FTC also canceled a workshop on its vertical merger guidelines.


Related Attorney(s): Joel Mitnick, Marshall Jones
Related Practice(s): Global Litigation
read more »

COVID-19 Update: Federal Reserve Launches TALF (Again)

March 23, 2020

Today, the Federal Reserve announced that it was restarting the Term Asset-Backed Securities Loan Facility (“TALF”) to support the issuance of asset-backed securities (“ABS”) collateralized by consumer and commercial loans.  Established under Section 13(3) of the Federal Reserve Act, with the approval of the U.S. Treasury Secretary, the TALF will serve as a funding backstop to facilitate the issuance of eligible ABS on or after March 23, 2020 until September 30, 2020, unless extended.  


Related Attorney(s): Scott Cammarn
Related Practice(s): Financial Regulation, Securitization & Asset Based Finance, TALF Task Force
read more »

UK’s Financial Conduct Authority Consults on New Climate-Related Disclosure Requirements following TCFD Recommendations

March 17, 2020

In March 2020, the UK’s Financial Conduct Authority (the “FCA”) released a consultation paper entitled: “Proposals to enhance climate-related disclosures by listed issuers and clarification of existing disclosure obligations” (“CP20/3”).


Related Attorney(s): Joanna Valentine, Christopher Smith
Related Practice(s): Corporate
Related Office(s): London
read more »

UK Gambling Commission Cracks Down in Respect of Money Laundering Failures

March 16, 2020

On 12 March 2020, the UK Gambling Commission announced that it will fine online gambling business Betway Limited (“Betway”) £11.6 million for failures in respect of its anti-money laundering controls and handling of seven of its “VIP” high-spending customers.


Related Attorney(s): Kevin Roberts, Mark Beardsworth, Duncan Grieve
Related Practice(s): Global Litigation, White Collar Defense and Investigations
Related Office(s): London
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UK Budget 2020 - Key Tax Measures

March 12, 2020

The Chancellor of the Exchequer delivered the United Kingdom (“UK”) Budget for 2020 on 11 March 2020. The Budget was delivered against a backdrop that very few people could have anticipated at the commencement of the year.  The Government’s long term focus of re-orienting the UK away from the European Union, as a result of Brexit, is now overshadowed by the global pandemic of Covid-19.  Despite this dramatic political environment, the measures in the Budget relating to taxation are, by contrast, almost reassuringly down-to-earth.  Those measures deliver a consistent message of the UK being a top-tier jurisdiction in which investment can be made efficiently, alongside a careful eye being kept on the competitiveness of the UK’s tax policy environment. 


Related Attorney(s): Adam Blakemore, Catherine Richardson, Hugo Chan
Related Practice(s): Tax
Related Office(s): London
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The Federal Circuit’s Polaris Decision Provides Insights Into The Constitutionality Of Inter Partes Reviews

February 14, 2020

As previously reported here, Judges Reyna, Hughes, and Wallach ordered additional briefing in Polaris Innovations Ltd. v. Kingston Technology Company—an inter partes review appeal—regarding the constitutionality of Administrative Patent Judges (“APJs”) that oversee patent validity challenges at the Patent Trial and Appeal Board (“PTAB”).


Related Attorney(s): John Moehringer, Danielle Tully, Michael Powell, Jaclyn Hellreich
Related Practice(s): Global Litigation, Intellectual Property
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Final Regulations on Expanded Authority of CFIUS to Review Foreign Investor Transactions Go into Effect

February 13, 2020

Eighteen months after President Trump signed the Foreign Investment Risk Review Modernization Act (“FIRRMA”) which broadened the power of the Committee on Foreign Investment in the United States (“CFIUS”) to review foreign investments in the United States, final regulations to implement CFIUS’s expanded authority become effective on February 13, 2020.


Related Attorney(s): Keith Gerver
Related Practice(s): Corporate, Global Litigation, White Collar Defense and Investigations
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2019 Year in Review: Securities Litigation and Enforcement

February 10, 2020

There was abundant federal securities litigation activity in 2019.  Plaintiffs not only continued to file securities lawsuits at record numbers, but repeatedly secured victories in cases on significant issues of law. 


Related Attorney(s): Jason Halper, Jodi Avergun, Nathan Bull, Kyle DeYoung, Jared Stanisci, Adam Magid, Lex Urban, Victor Bieger, Kendra Wharton, Hyungjoo Han, James Orth, Stephen Weiss, Audrey Curtis, Victor Celis, Wesley Wintermyer
Related Practice(s): Global Litigation, White Collar Defense and Investigations
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Google v. Oracle: Will Software Be Free?

February 07, 2020

Referred to as “the copyright case of the century,” the Supreme Court could determine the fate of software protection in Google v. Oracle, namely that of Java.  At its core, the case asks whether software programmers may copy functional names present in software code (known as a software interface; e.g., the “print” function) so long as they do not copy the underlying source code implementing the function.


Related Attorney(s): Dorothy Auth Ph.D., Howard Wizenfeld, Jaclyn Hellreich
Related Practice(s): FinTech, Global Litigation, Intellectual Property
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Volcker 3.0: The Agencies Propose Relief for Securitizations and Foreign Funds and New Exemptions from the Volcker Rule’s Covered Fund Restrictions

February 05, 2020

On January 30, 2020, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, and the Commodity Futures Trading Commission (collectively, the “Agencies”) issued proposed regulations (the “Proposed Regulations”) revamping the regulations implementing the Volcker Rule, a centerpiece of the Dodd-Frank Wall Street Reform and Consumer Protection Act.


Related Attorney(s): Scott Cammarn, Stuart Goldstein, Gregg Jubin, Ivan Loncar, Dorothy Mehta, Joseph Beach
Related Practice(s): Financial Regulation, Securitization & Asset Based Finance
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2019 Year in Review: Securitization Litigation and Regulation

January 30, 2020

There were significant developments in 2019 as courts continued to issue important decisions in this space and significant legislation impacting the residential mortgage-backed securities (“RMBS”) market came into effect.  A number of cases have called into question firmly rooted practices in the securitization market.


Related Attorney(s): Jason Halper, Jonathan Watkins, Aaron Lang, Ailsa Chau
Related Practice(s): Global Litigation, Securitization & Asset Based Finance
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Delaware Court of Chancery Finds No Showing of Actionable Claim Required to Inspect Books and Records

January 29, 2020

In Lebanon County Employees’ Retirement Fund, et al. v. AmerisourceBergen Corporation, the Delaware Court of Chancery ordered the inspection of the books and records of AmerisourceBergen Corporation, one of the leading opioid distributors in the country, for the purpose of investigating potential mismanagement or breaches of fiduciary duty in connection with the company’s distribution of opioids.


Related Attorney(s): Jason Halper, Ellen Holloman, Sara Bussiere
Related Practice(s): Global Litigation
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FTC Announces 2020 Thresholds for Merger Control Filings Under HSR Act and Interlocking Directorates Under the Clayton Act

January 28, 2020

The Federal Trade Commission (“FTC”) has announced its annual revisions to the dollar jurisdictional thresholds in the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”); the revised thresholds will become effective on February 27, 2020.  These changes increase the dollar thresholds necessary to trigger the HSR Act’s premerger notification reporting requirements.  The FTC also increased the thresholds for interlocking directorates under Section 8 of the Clayton Act, effective as of January 21, 2020.


Related Attorney(s): Joel Mitnick, Ngoc Hulbig
Related Practice(s): Global Litigation
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SEC Proposes Rule Amendments Designed to Expand Access to Private Investment Opportunities

January 22, 2020

By a 3-2 vote, the Securities and Exchange Commission (the “SEC”) approved the publication of a release on December 18, 2019, generally expanding the scope of the definitions of “accredited investor” in Rule 501(a) of Regulation D and “qualified institutional buyer” in Rule 144A under the Securities Act of 1933 (the “Securities Act”) to increase accessibility to private investment opportunities. The Release also proposed related changes to Rules 215 and 163B under the Securities Act and Rule 15g-1 under the Securities Exchange Act of 1934 (the “Exchange Act”).


Related Attorney(s): Steven Lofchie, Dorothy Mehta, Mark Highman, Nikita Cotton
Related Practice(s): Financial Regulation
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CFTC Codifies Registration and Reporting Relief for Commodity Pool Operators and Commodity Trading Advisors

January 17, 2020

The Commodity Futures Trading Commission (the “CFTC”) approved the publication of two releases (the “Final Rules”) on November 25, 2019, adopting final amendments to Part 4 of the CFTC Rules which codify and expand a number of interpretative notices and no-action letters granting relief from the registration and reporting obligations applicable to various categories of Commodity Pool Operators (“CPOs”) and Commodity Trading Advisors (“CTAs”). The CFTC first proposed the amendments in a release published on October 18, 2018 (the “Proposed Rulemaking”).


Related Attorney(s): Steven Lofchie, Dorothy Mehta, Mark Highman, Nikita Cotton
Related Practice(s): Financial Regulation
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The Delaware Court of Chancery Rejects Termination of Merger Agreement Based on Material Adverse Effect

January 08, 2020

In Channel Medsystems, Inc. v. Boston Scientific Corporation, the Delaware Court of Chancery rejected an attempt by Boston Scientific to terminate and thus avoid consummating a merger agreement with Channel on the grounds that a material adverse effect as defined in the parties’ agreement had occurred.


Related Attorney(s): Jason Halper, William Mills, Joshua Apfelroth, Sara Bussiere
Related Practice(s): Corporate, Global Litigation
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No, You’re a Customer: Recent Second Circuit Decision Circumscribes Merit and Preempts State Law Impairment of Safe Harbor Protections in the Wake of a Failed LBO

January 07, 2020

On December 19, 2019, the United States Court of Appeals for the Second Circuit (the “Second Circuit”) affirmed a ruling of the United States District Court for the Southern District of New York (the “District Court”) dismissing constructive fraudulent conveyance claims brought by representatives of certain unsecured creditors of Chapter 11 debtor Tribune Company (“Tribune”) against Tribune’s former shareholders on the ground that the fraudulent conveyance claims were barred by Bankruptcy Code section 546(e)’s safe harbor provision.


Related Attorney(s): Ingrid Bagby, Michele Maman, Eric Waxman, Kathryn Borgeson, Samantha Greenfield
Related Practice(s): Financial Restructuring
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