Help Center

ABI Blog Exchange

STERN v. MARSHALL, 131 S.Ct. 2594 (2011):WHY SHOULD YOU CARE?Kevin C. McGee, PartnerSeder & Chandler, LLP339 Main Street, 3rd FloorWorcester, MA 01608©Kevin C. McGee
  • The Stern v. Marshall Facts:
    • Former Playmate of the Year Anna Nicole Smith (real name: Vickie Lynn Marshall) (“Smith”) marries J. Howard Marshall II (“Howard”), who is very old and very rich.
      • One year later – Howard dies & leaves Smith out of his will. Before his death, Smith files suit in Texas and accuses Howard’s son – E. Pierce Marshall (“Pierce”) – of shenanigans to keep her out of the will.
6 years 9 months ago
The SEC has published a notice to solicit comments on proposed rule changes by the New York Stock Exchange to its Listed Company Manual.
6 years 9 months ago
ISS has released a detailed set of FAQs on how it will select a company's peer group for purposes of conducting its pay-for-performance analysis.  ISS uses this peer group to measure a company's total shareholder return and CEO pay in deciding how to recommend for the say-on-pay vote.
6 years 9 months ago
More than 18 months ago, we alerted readers about a request for information by the Department of Labor (DOL) seeking suggestions from interested parties on the possibility of using electronic media by employee benefit plan sponsors to furnish information to participants.  The current ERISA rules under the DOL prevent companies from taking full advantage of using notice and access in lieu of paper copies of proxy statements for employee benefit plan participants as a practical matter.  We wrote a
6 years 9 months ago
At its upcoming webinar, ISS will likely discuss a new process for companies that are changing their own peer group selections from 2012 to 2013 to inform ISS of those changes prior to issuing their proxy statements, so that ISS can be aware of the companies’ most recent peer selections as ISS constructs its own groups for purposes of its proxy voting recommendations.  As we explained in our memo, t
6 years 9 months ago
A significant consideration in filing your bankruptcy case is "venue" -- that's legalese for the physical location of the court in which you file. It's a powerful feature of bankruptcy -- especially for business bankruptcy cases under Chapter 11 - that you may be able to pick the court, and that, in turn, can have a bearing on the legal outcome. A federal statute, 28 U.S.C. 1408(1), specifies where a bankruptcy case may be filed and applies to all types of bankruptcy, from Chapter 7 through Chapter 13. The statute provides options for filing your bankruptcy case. The law says a debtor may choose to file in the federal court district in which his domicile, residence, principal place of business, or principal assets in the United States have been located for the past six months (or where they have been located for the longest part of those six months, if they have been located in several places during that time.)
6 years 9 months ago
A significant consideration in filing your bankruptcy case is "venue" -- that's legalese for the physical location of the court in which you file. It's a powerful feature of bankruptcy -- especially for business bankruptcy cases under Chapter 11 - that you may be able to pick the court, and that, in turn, can have a bearing on the legal outcome. A federal statute, 28 U.S.C. 1408(1), specifies where a bankruptcy case may be filed and applies to all types of bankruptcy, from Chapter 7 through Chapter 13. The statute provides options for filing your bankruptcy case. The law says a debtor may choose to file in the federal court district in which his domicile, residence, principal place of business, or principal assets in the United States have been located for the past six months (or where they have been located for the longest part of those six months, if they have been located in several places during that time.)
6 years 9 months ago
Glass Lewis recently released its 2013 Proxy Season Guidelines for the 2013 proxy season, which will go into effect for shareholder meetings taking place after January 1, 2013, an abridged version of which is publicly available.
6 years 9 months ago
I had to smile when I read the news that the banks were now lobbying to keep former Harvard bankruptcy professor and Senator-elect Elizabeth Warren from getting appointed to the Senate banking committee. Lobbying is not cheap. It runs into the millions of dollars for a campaign. And, like most good businesspersons, I am sure the banks did some cost-benefit analysis in making this decision. This action by the financial industry must mean they see a big threat to profits. And consequently, since bank profits and consumer losses are a zero-sum game, it also means her appointment to the committee could mean a big financial win for consumers. Granted, one person alone will not do it all, but the banks perceive she could have a significant effect on the outcome. For consumers, let's hope the banks are not as successful with this campaign as they were in sinking her appointment to head the Consumer Financial Protection Bureau (CFPB), a sort of consumer safety protection agency she dreamt up. Among the CFPB's primary goals is to prevent the reappearance of the bad mortgages that blew up in the mid-2000s and harmed so many average people and the nation's economy as a whole. It was passed as part of the Dodd-Frank financial reform act. We'll see.
6 years 9 months ago
I had to smile when I read the news that the banks were now lobbying to keep former Harvard bankruptcy professor and Senator-elect Elizabeth Warren from getting appointed to the Senate banking committee. Lobbying is not cheap. It runs into the millions of dollars for a campaign. And, like most good businesspersons, I am sure the banks did some cost-benefit analysis in making this decision. This action by the financial industry must mean they see a big threat to profits. And consequently, since bank profits and consumer losses are a zero-sum game, it also means her appointment to the committee could mean a big financial win for consumers. Granted, one person alone will not do it all, but the banks perceive she could have a significant effect on the outcome. For consumers, let's hope the banks are not as successful with this campaign as they were in sinking her appointment to head the Consumer Financial Protection Bureau (CFPB), a sort of consumer safety protection agency she dreamt up. Among the CFPB's primary goals is to prevent the reappearance of the bad mortgages that blew up in the mid-2000s and harmed so many average people and the nation's economy as a whole. It was passed as part of the Dodd-Frank financial reform act. We'll see.
6 years 9 months ago
The SEC released its 151-page financial report for its fiscal year ended September 2012. The report discusses all of the different areas that the SEC is responsible for, but the governance community is likely most interested in the following in terms of historical and anticipated activities, and some of the more intriguing factual details: 
6 years 9 months ago
In a recent Sixth Circuit Decision, Waldman v. Stone, decided October 26, 2012, the Court may have significantly expanded the intended reach of a 2011 Supreme Court decision, Stern v. Marshall, 131 S.C.T. 2594 (2011). In Stern v. Marshall, the Supreme Court held that Bankruptcy Court Judges, as Article I Judges and not Article III Judges under the United States Constitution, could not exercise Article III judicial power to decide state law cause of action even where such state cause of action was arguably a core proceeding under 28 U.S.C. §157.  Under 28 U.S.C. §157 bankruptcy judges can enter final judgments in core proceedings but can only make recommendations to the District Court in non-core proceedings unless the parties consent.Following Stern, most courts and commentators assumed that a party could waive the limitations on the Bankruptcy Court’s jurisdiction imposed by Stern and consent to an adjudication in the Bankruptcy Court.  However, in the Waldman decision, the Sixth Circuit held that not only did the Bankruptcy Court lack constitutional authority to enter a judgment against Waldman but that Waldman could raise the issue for the first time on appeal.

Read More from: SCG Bankruptcy Blog

6 years 10 months ago
The United States Bankruptcy Court for the District of Puerto Rico, in a case of first impression in this district, on November 9, 2012, issued an opinion and order, concluding that the absolute priority rule applies to individual Chapter 11 debtors.   In re Lee Min Ho Chen, Case No. 11-08170 (BKT), Docket No. 211.The absolute priority rule of Section 1129(b) of the Bankruptcy Code is a fundamental creditor protection in a Chapter 11 bankruptcy case. In general terms, the rule provides that if a class of unsecured creditors rejects a debtor’s reorganization plan and is not paid in full, junior creditors and equity interestholders may not receive or retain any property under the plan. The rule thus implements the general state-law principle that creditors are entitled to payment before shareholders, unless creditors agree to a different result. Recent litigation in the federal courts nationwide has raised the issue and created a split among courts as to whether the absolute priority rule still applies in Chapter 11 cases filed by individuals. The absolute priority rule has been prominent in bankruptcy disputes, including a number of Supreme Court decisions.

Read More from: SCG Bankruptcy Blog

6 years 10 months ago
The U.S. Court of Appeals for the Seventh Circuit in Chicago has issued a decision with significant implications for licensees of trademarks whose licensors become debtors in bankruptcy.  In Sunbeam Products, Inc. v. Chicago American Manufacturing, LLC, the Court considered whether rejection of a trademark license in bankruptcy deprives the licensee of the right to use the licensed mark.[1]   Disagreeing with the holding of the Court of Appeals for the Fourth Circuit in Lubrizol Enterprises, Inc. v. Richmond Metal Finishers, Inc.,[2]  the Court concluded that a licensee could continue to use the licensed mark notwithstanding the rejection of the license agreement.  The decision may have important implications also for other types of intellectual property licenses and, indeed, all other kinds of contracts, licenses and leases as well.Lubrizol and Congressional ResponseLubrizol held that, when an IP license is rejected in the bankruptcy case of the licensor, the licensee “could not seek to retain its contract rights in the [IP] by specific performance.” 746 F.2d at 1048.  Lubrizol was universally understood to mean that the licensee loses the right to use any licensed IP following rejection of the license agreement.

Read More from: SCG Bankruptcy Blog

6 years 10 months ago
The much discussed fiscal cliff about which will fall over (or not based on Congress) is probably misunderstood more than any other jargonistic word in politics today. What is it? Please read further.About a year ago, or so it seems, Congress and the President couldn't agree on the issue of the national debt - should it be allowed to increase again. Actually, not even the House of Representatives and the Senate could agree (Thank you Tea Party!). A deal was made that allowed the Debt Ceiling to increase by $1-2Trillion. Had it not increased, so goes the theory, we would have defaulted on international and domestic debt. (I guess Bain Capital would have bought the Country for 5 cents on the dollar).The agreement was simple: "Everyone" agreed to reduce the debt by $1Trillion by a mix of spending cuts and increased revenues (called Taxes). Whether any of the parties would have actually done what they promised is still unknown. IN EXCHANGE for the "put the decision off until after the election" scenario, each "side" accepted the concept that if nothing is done, then Sequestration would come into play - putting everything on hold but with HUGE penalties.This basically means that budget cuts and revenues generation (taxes) would be forced into being. No turning back. Congress passed the law and the President signed it.
6 years 10 months ago
Today ISS issued policy updates applicable to the 2013 proxy season, for meetings held on or after February 1, 2012. We'll be distributing a client memo with details, and we understand that ISS plans to host a webcast on these updates on December 6th.  Below are a summary of the key highlights: Governance.
6 years 10 months ago
3,001 whistleblower tips from all 50 states and 49 countries were provided to the SEC in the 2012 fiscal year, according to its annual report on the whistleblower program. The annual report is required to be issued to Congress by the Office of the Whistleblower under Dodd-Frank. 
6 years 10 months ago
The SEC has announced the issuance of an exemptive order granting regulatory relief for SEC filers (public companies, investment companies, accountants, transfer agents and others) affected by Hurricane Sandy and its aftermath. Among other things, the order exempts:
6 years 10 months ago
In early October, the American Petroleum Institute, Chamber of Commerce, Independent Petroleum Association of America and National Foreign Trade Counsel had filed a complaint and a petition for review in the D.C. Circuit Court of Section 13(q) of the Exchange Act, which under Dodd-Frank required the Commission to issue rules mandating reports by resource extraction issuers relating to payments made to a foreign government or the U.S. federal government in order to further the commercial development of oil, natural gas or minerals.
6 years 10 months ago
National Fuel Gas Company has sent a letter to the SEC regarding a common shareholder proposal that authorizes the Harvard Shareholder Rights Project (HSRP) to ask the company’s board to declassify. The proposal was submitted on behalf of the Massachusetts Pension Reserves Investment Trust Fund (PRIT) by its trustee, the Pension Reserves Investment Management Board (PRIM).
6 years 10 months ago