Source: http://news.feedzilla.com/en_us/stories/law/video/366640301?client_source=feed&format=rss
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Source: http://legaltalknetwork.com/podcasts/2013/12/the-soft-skills-every-paralegal-needs
In In re Answers Corp. Shareholders Litigation, C.A. No. 6170-VCN, 2014 WL 463163 (Del. Ch. Feb. 3, 2014), the Delaware Court of Chancery (Noble, V.C.) granted summary judgment in favor of defendants in a stockholder class action for breach of fiduciary duty arising out of the merger of Answers Corporation (“Answers” or the “Company”) with AFCV Holdings, LLC (“AFCV”). Because the undisputed material facts showed that a disinterested majority of the Board of Directors approved the transaction, plaintiffs were required to offer evidence that the Board consciously acted in bad faith or was controlled by an interested party to survive summary judgment. Plaintiffs were unable to do so. The Answers decision highlights the high burden stockholder plaintiffs face to proceed with breach of fiduciary duty claims where a merger is approved by an independent/non-controlled board, even where the sale process may have been flawed. As the court explained, there is a vast difference between “a flawed inadequate effort to carry out fiduciary duties and a conscious disregard for them.”
Answers was a publicly traded Delaware corporation focused on the questions and answers space online. Approximately 90% of the website’s traffic and 75% of its revenue came from Google. In March 2010, AFCV, a portfolio company of a private equity firm with a focus on social media and online information resources, submitted an expression of interest to members of the Answers board concerning a possible business combination. In September 2010, AFCV sent Robert Rosenschein, the Company’s CEO, a letter of intent proposing to acquire Answers for between $7.50 and $8.25 per share. The Board eventually obtained an offer of $10.25 per share, but refused to grant AFCV exclusivity while it continued to evaluate other alternatives and strategic buyers.
While negotiations were proceeding, the Company’s financial conditions improved significantly when Answers announced its fourth quarter results for 2010. In January 2011, the financing committee of the Board recommended attempting to increase the offer price beyond the pending $10.25 per share, but to accept that amount if no further concessions on price were obtained. AFCV responded with its best and final offer at $10.50 per share. After noting that there were no other offers of the table and recognizing that Google continued to significantly threaten the Company’s core business, the Board unanimously approved the proposed transaction.
Shortly after the announcement of the merger agreement, several stockholder plaintiffs filed complaints in the Delaware Court of Chancery challenging the transaction. Plaintiffs alleged that Rosenschein (and two other directors) were conflicted and controlled the negotiation process. Plaintiffs also alleged that the members of the Board breached its fiduciary duties by acting in bad faith to sell Answers before its rising stock price would exceed AFCV’s offer by (1) purposefully engaging in a limited shopping process, (2) failing to act in the interest of the Company’s public stockholders after circumstances had changed to indicate the offer price was too low and (3) exerting willful blindness by ignoring alternatives to the AFCV transaction.
The court granted defendants’ motion for summary judgment. The court recognized that a disinterested majority of the Board approved the transaction. Thus, to survive summary judgment, plaintiffs were required to show that the Board consciously acted in bad faith or that it was controlled by an interested party. Plaintiffs failed to do so. The directors submitted evidence that they fielded a variety of unsolicited offers and participated in numerous meetings where they discussed transaction alternatives. Despite discussions with at least seven other possible acquirers, nobody else made a credible offer to acquire Answers. The directors also caused the Company’s financial advisor to perform a market check. Moreover, the directors actively negotiated with AFCV on price. This evidence undermined any assertion of bad faith.
The court discounted plaintiffs’ contention than an email where a director stated that the value of Answers could be as much as $1.50 higher than AFCV’s $10.25 offer price showed “bad-faith” by recognizing that the Board had plausible business concerns regarding the stability and future success of the Company tied to its reliance upon Google for traffic and revenues. Plaintiffs also ignored the fact that the Board secured additional merger consideration as a result of the Company’s improving financial condition. As the court explained:
Plaintiffs’ proffered evidence does not create a genuine issue of material fact. Evidence based upon a few isolated quotes stating the deal was accelerated or reflecting one director’s belief, or perhaps mere bargaining position, of the Company’s value does not state a claim for bad faith in this context. Such considerations are within the purview of a disinterested Board . . . . [N]o allegations have been made concerning the Board’s motives for favoring AFCV as a bidder or presenting some other motive for failing to maximize shareholder value.
Ultimately, although plaintiffs argued a “variety of ways in which they believe the process could have been better conducted, they offer no evidence of that extreme set of facts required to show that the board utterly failed to comply with its duties.”
The court also rejected plaintiffs’ claim that Rosenschein and two other directors dominated and controlled the Board to such a degree as to render it not independent.
The decision in Answers confirms that stockholders bear a high burden when challenging a disinterested/non-controlled board’s decision to approve a strategic transaction. When faced with non-exculpated duty of loyalty claims, Delaware courts will accept a less-than-optimal shop process as long as the directors did not act with a “conscious disregard” of their duty under Revlon, Inc. v. MacAndrews & Forbes Holdings, 506 A.2d 173 (Del. 1986) [see generally here] to maximize stockholder value in a change-in-control transaction.
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Let the NLRB's press release tell the story:
The National Labor Relations Board has found that the firing of a BMW salesman for photos and comments posted to his Facebook page did not violate federal labor law, because the activity was not concerted or protected. [Decision here]The question came down to whether the salesman was fired exclusively for posting photos of an embarrassing and potentially dangerous accident at an adjacent Land Rover dealership, or for posting mocking comments and photos with co-workers about serving hot dogs at a luxury BMW car event. Both sets of photos were posted to Facebook on the same day; a week later, the salesman was fired from Knauz BMW in Lake Bluff, IL.
The Board agreed with Administrative Law Judge Joel P. Biblowitz, who found after a trial that the salesman was fired solely for the photos he posted of a Land Rover that was accidently driven over a wall and into a pond at the adjacent dealership after a test drive. Both dealerships are owned by the same employer.
In a charge filed with the NLRB, the salesman maintained that he was principally fired for posting photos and sarcastic comments about his dealer serving hot dogs, chips and bottled water at a sales event announcing a new BMW model. “No, that’s not champagne or wine, it’s 8 oz. water,” the salesman commented under the photos. Following an investigation,the regional office issued a complaint. Judge Biblowitz found that this activity might have been protected under the National Labor Relations Act because it involved co-workers who were concerned about the effect of the low-cost food on the image of the dealership and, ultimately, their sales and commissions.
The Land Rover accident was another matter. A salesperson there had allowed a customer’s 13-year-old son to sit behind the wheel following a test drive, and the boy apparently hit the gas, ran over his parent’s foot, jumped the wall and drove into a pond. The salesman posted photos of the accident with sarcastic commentary, including: “OOPS”.
The National Labor Relations Act protects the group actions of employees who are discussing or trying to improve their terms and conditions of employment. An individual’s actions can be protected if they are undertaken on behalf of a group, but the judge found, and the Board agreed, that was not the case here.
As Judge Biblowitz wrote, “It was posted solely by [the employee], apparently as a lark, without any discussion with any other employee of the Respondent, and had no connection to any of the employees’ terms and conditions of employment. It is so obviously unprotected that it is unnecessary to discuss whether the mocking tone of the posting further affects the nature of the posting.” Because the posts about the marketing event did not cause the discharge, the Board found it unnecessary to pass on whether they were protected.
However, the three-member panel differed in its opinions of a “Courtesy” rule maintained by the employer regarding employee communications. Chairman Mark Gaston Pearce and Member Sharon Block found the language of the rule to be unlawful because employees would reasonably believe that it prohibits any statements of protest or criticism, even those protected by the National Labor Relations Act.
Dissenting, Member Brian E. Hayes found that the employer’s rule was “nothing more than a common-sense behavioral guideline for employees” and that “nothing in the rule suggests a restriction on the content of conversations (such as a prohibition against discussion of wages)”.
The Board ordered Knauz BMW to remove the unlawful rules from the employee handbook and furnish employees with inserts or new handbooks. The decision, dated Sept. 28 but made public today, was the Board’s first involving a discharge for Facebook postings; other such cases are pending before the Board.
Source: http://www.lawmemo.com/blog/2012/10/nlrb_firing_for.html
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The NLRB this week made public a number of significant decisions, most reached in the final days of the term of Member Brian Hayes, which ended on December 16. The Board continues with three members, Chairman Mark Gaston Pearce and Members Richard F. Griffin, Jr. and Sharon Block.
The decisions touch on a variety of issues including social media postings, charter school jurisdiction, backpay awards, the chargeability of certain union lobbying expenses, and an employer’s responsibility to continue dues collection after the expiration of a contract.
Hispanics United of Buffalo
The Board found that the employer unlawfully fired five employees because of their Facebook posts and comments about a coworker who intended to complain to management about their work performance. In its analysis, the Board majority applied settled Board law to the new world of social media, finding that the Facebook conversation was concerted activity and was protected by the National Labor Relations Act. Member Hayes dissented.
Alan Ritchey, Inc.
In a unanimous decision that resolved the last of the two-member cases returned following the 2010 Supreme Court decision in New Process Steel, the Board found that where there is no collectively-bargained grievance-arbitration system in place, employers generally must give the union notice and an opportunity to bargain before imposing discipline such as a discharge or suspension on employees. Member Hayes was recused.
Latino Express
In a decision that will affect most cases in which backpay is awarded, the Board decided to require respondents to compensate employees for any extra taxes they have to pay as a result of receiving the backpay in a lump sum. The Board will also require an employer ordered to pay back wages to file with the Social Security Administration a report allocating the back wages to the years in which they were or would have been earned. The Board requested briefs in this case in July 2012. Member Hayes did not participate in the case.
Chicago Mathematics & Science Academy
Rejecting the position of a teachers’ union, the Board found that it had jurisdiction over an Illinois non-profit corporation that operates a public charter school in Chicago. The non-profit was not the sort of government entity exempt from the National Labor Relations Act, the Board majority concluded, and there was no reason for the Board to decline jurisdiction. Member Hayes dissented in part.
United Nurses & Allied Professionals (Kent Hospital)
The Board, with Member Hayes dissenting, addressed several issues involving the rights of nonmember dues objectors under the Supreme Court’s Beck decision. On the main issue, the majority held that, like all other union expenses, lobbying expenses are chargeable to objectors, to the extent that they are germane to collective bargaining, contract administration, or grievance adjustment. The Board invited further briefing from interested parties on the how it should define and apply the germaneness standard in the context of lobbying activities.
WKYC-TV, Gannet Co.
Applying the general rule against unilateral employer changes in terms and conditions of employment, the Board found that an employer’s obligation to collect union dues under a check-off agreement will continue after the contract expires and before a bargaining impasse occurs or a new contract is reached. Member Hayes dissented.
Source: http://www.lawmemo.com/blog/2012/12/nlrbs_recent_si.html
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Source: http://jurist.org/paperchase/2014/03/supreme-court-rules-tax-unavailaable-for-severance-packages.php
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Source: http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202624154645&rss=rss_nlj
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Source: http://jurist.org/paperchase/2014/03/bangladesh-authorities-move-to--ban-islamist-group.php
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An ABA task force recently found that only 56% of recent law school graduates achieve full-time employment as an attorney within twelve months of graduation, over the last five years, applicants to law schools have declined by roughly 50% from approximately 100,000 to approximately 50,000 per year.
This will have a dramatic impact on the availability of lawyers for the American public. And couple this statistic with the more than 400,000 lawyers who will retire in the next 10 years, and you will see a dramatic change in the legal landscape.
For those who complain that there are too many lawyers, this should satisfy their desire to thin the ranks of lawyers. For those who want to better serve those currently under-served Americans, this will add yet another challenge to the system. And for lawyers, the likelihood increases that the Bar will add yet another requirement of pro bono service and added cost to doing business as a lawyer.
Source: http://feeds.lexblog.com/~r/LawBizBlog/~3/0jN9qNjPgRk/
Source: http://legaltalknetwork.com/podcasts/un-billable-hour/2014/02/attorneys-billing-art-getting-paid
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Source: http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202637032014&rss=rss_nlj
If you’re thinking this story is about a smoker who did something with a cigarette butt that caused a HUGE amount of damage, you would be right. Per The Star-Ledger (via nj.com):
Middlesex County acting Prosecutor Andrew C. Carey said investigators believe that [school custodian] Jerome C. Higgins, 48, of East Brunswick, tossed an unfinished portion of a cigarette into a trash can inside the school before he left the building sometime Saturday.
Uh-oh.
Carey said the contents of the trash can, located in a custodian’s office, caught fire and the blaze spread throughout the building at about 7:45 p.m.
The result was an inferno that consumed the 50-year-old building that held 450 students in kindergarten through fifth grade.
Poof. Just like that, the building was gone. There must be some serious consequences for that, right? Well …
Higgins is charged with a petty disorderly persons offense for smoking inside the school.
Well, it’s not like anyone will be inconvenienced or anything …
[Edison Board of Education President Gene] Maeroff said the school’s students and staff will not return to school until Wednesday when they will be placed in temporary quarters at Middlesex County College in Edison until more permanent facilities can be found.
All of the children will have to be bused to the college, which is several miles away from the school.
“We’re doing this so they will all stay together,” the board president said. “After a few weeks, they will go to more permanent facility once we find one.”
Um. Sorry? Click here for the source, some photos, a video, and some additional information on this unfortunate event.
Source: http://rss.justia.com/~r/LegalJuiceCom/~3/suJryqm5NBo/qwre-2.html
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Different versions of the "stop-and-frisk" policy are playing out in several major cities. Writer Daniel Bergner and educator Gemar Mills discuss how it works in Newark, New Jersey.
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Source: http://jurist.org/paperchase/2014/03/egypt-court-sentences-529-morsi-supporters-to-death.php