Bloomberg Law describes how Chelsea Grayson went from being a high-powered M&A partner at Jones Day to general counsel of clothing brand American Apparel and then stepped in as CEO.

“As GC, Grayson saw the company through its chapter 11 bankruptcy  and helped engineer the debt for stock swap that transformed American Apparel from a public company to private one owned by hedge funds,” writes Gabe Friedman.

Her career at American Apparel began as general counsel in 2014. The next year she became chief administrative officer and defended the company against founder and ousted CEO Dov Charney’s litigation to regain control of the company. She took over the CEO role in September.

The article includes a question-and-answer transcript about her goals, preparation, learning the business, and handling the high-pressure job as a single mother.

Read the article.

The sixth installment in Bryan Cave LLP’s series about banks’ third-party vendor service contracts covers two subjects: first, ownership of trademarks, copyrights, patents and other trade secrets, source code escrow agreements; and second, confidentialty.

Jerry Blanchard wrote the article for the firm’s Bank Bryan Cave blog.

“The contract should include intellectual property provisions that clearly define each party’s intellectual property rights for their pre-existing materials and materials developed as part of the contract,” he explains.

And: “The bank will want the vendor to maintain the confidentiality of all information provided by the bank. This includes preventing the vendor or its subcontractors from using the information in a manner that is not anticipated by the contract.”

Read the article.

The risk of a data breach cuts across industries and affects businesses large and small, causing some companies to migrate mission-critical data, including sensitive customer information, to third-party cloud providers, according to an article written by Sidley Austin lawyers Scott Nonaka and Kevin Rubino for Bloomberg Law.

“As data breaches have increased, so have the number of companies migrating mission-critical data to the cloud, including sensitive customer information,” they write. “These companies often turn to third-party cloud service providers to provide data hosting, software or infrastructure services. This trend is driven, in part, by the growing perception that cloud services are more secure than traditional information technology environments.”

They point out that data stored in the cloud faces many of the same threats as locally-stored data and, due to the growing amount of information in the cloud, it can be an attractive target for hackers.

Read the article.

In a federal lawsuit filed this week, Apple asserted that nearly all the iPhones, chargers and cables it surreptitiously purchased from online retailer Amazon were fakes, according to a Computerworld report.

Reporter Gregg Keizer quoted the complaint: “As part of its ongoing brand protection efforts, [Apple] has purchased well over 100 iPhone devices, Apple power products, and Lightning cables sold as genuine by sellers on Amazon.com and delivered through Amazon’s ‘Fulfillment by Amazon’ program. Apple’s internal examination and testing for these products revealed almost 90% of these products are counterfeit.”

Apple sued Mobile Star, a New York-based former Amazon supplier. The plaintiff said it purchased iPhone-related products that were advertised by Amazon as genuine Apple gear, complete with Apple copyrighted images and sometimes in packaging copied from real Apple accessories.

Read the article.

Bartonfalls LLC, an entity formed in August in the patent hotspot of East Texas, has sued 14 big media companies, claiming the media giants like CBS, NBC Universal and Bloomberg violated patented technology designed to switch automatically from one video display another, reports Ars Technica.

Reporter Joe Mullin explains that the patent, filed in 1997, “doesn’t talk about Web video or the Internet at all. Rather, it talks about switching between different video inputs when changing television programs.”

“Corporate documents show that Bartonfalls was formed as a Texas LLC in August,” according to the article. “Its business office is a virtual office in Plano, a city that’s just inside the borders for the Eastern District of Texas, the venue that it filed its lawsuits in. The only listed manager of Bartonfalls is a paralegal at a small Texas law firm, Stoddard and Welsh.”

Read the article.

Practical Law will present a free 75-minute webinar involving a Q&A discussion on tips and techniques for litigators wanting to build their book of business. The event will be Thursday, Oct. 27, at 1 p.m. EDT.

The webinar will include discussions on:

• Winning business from new clients and maximizing existing client relationships.
• Best practices for client pitches.
• Creative approaches to business development, including technological and practice management solutions.
• Key takeaways when developing a personal business plan.

A short Q&A will follow.

PANELISTS:

• James Lee, Managing Partner, LTL Attorneys LLP
• Frederic Mauhs, General Counsel, BBVA S.A., New York Branch
• Katherine Perrelli, Chair of the Litigation Department, Seyfarth Shaw LLP

The moderator will be Meagan Crowley-Hsu, Deputy Editor, Practical Law The Journal: Litigation, Practical Law

Register for the webinar.

The Innoxcell Annual Symposium – The US -Asia Cross Border White Collar Crime Series will be on Dec. 6, 2016, in New York at the Warwick New York Hotel.

Complimentary passes are available for General Counsel, Corporate Compliance, Head of Audit, Head of M&A, IP and Head of Risk. Contact Jeffrey Teh at Jeffrey.teh@innoxcell.net for more information on passes.

The Innoxcell Annual Symposium (IAS) is the world’s largest and most comprehensive white-collar crime and regulatory compliance conference, focusing on cross-border business legal relations between the US and Asia.

In 2016, the Innoxcell Annual Symposium (IAS) has been held in Hong Kong, Shanghai, Singapore, Australia, the United Kingdom and now, the United States. This is the only event of its kind, featuring multiple streams covering the great diversity of cross-border issues, including:

• US – Asia eDiscovery judiciary panel
• US-China anti-corruption best practices
• Financial Crime Compliance
• Employee Misconducts
• China outbound investment and merger review best practices
• Cross-border fraud investigation and litigation
• One belt, one road – risk and legal considerations

Register for the symposium.

The ongoing fallout from Samsung’s Note 7 debacle now includes a possible class-action lawsuit against the company in the U.S., according to a report by digital Trends.

Three former Samsung Note 7 users in New Jersey filed the suit a week after the Korean company ended production of the handset after faulty batteries caused more than 100 units to overheat and catch fire, reports Trevor Mogg.

The suit focuses on Samsung’s handling of the recall, which the plaintiffs claim caused them to go without a phone for several weeks while still having to pay for the device and plan charges, Motherboard reported on Tuesday.

Read the article.

Starting next year, the federal government will require that all new or replaced gas lines for hundreds of thousands of apartments and small businesses across the U.S. must be equipped with special valves that can shut off gas automatically when a line is ruptured.

In a post on its website, Androvett Legal Media & Marketing reports that the government’s Oct. 11 announcement expands the mandatory installation of excess flow valves beyond new single-family homes. The valves, priced at around $30, don’t prevent gas lines from being ruptured, such as when a backhoe accidentally hits one. But by limiting the amount of gas that escapes, federal regulators say the valves can prevent a buildup of fuel that can contribute to explosions or fires.

“These simple and inexpensive devices can save dozens of lives and millions of dollars in property damage each year,” says Dallas attorney Tom Carse. “But gas companies, contractors and consumers need to understand how and where the valves should be located. Otherwise the devices will provide very little or no protection.”

In August, Carse filed suit against Atmos Energy on behalf of 20 people who suffered physical and emotional injuries and property damage after a 2015 gas explosion destroyed four homes and heavily damaged nine others in their Waxahachie, Texas, neighborhood.

The lawsuit claims that Dallas-based Atmos Energy was negligent in how it located and installed the excess flow valves during construction of the subdivision. Court documents claim that the explosion occurred when an Atmos gas line was cut by contractors who were working to install underground fiber-optic cable.

Practical Law will present a complimentary webinar on steps investors can take to gain a more comprehensive awareness of the challenges they face and to protect their investments and rights when investing in a foreign country.

The event will be Wednesday, Oct. 25, at 1 p.m. EDT. CLE credit available is available in multiple states. See the registration page for full details.

On its website, Practical Law says expropriation and resource nationalism, political and civil unrest, war, acts of terrorism, currency restrictions, endemic corruption and weaknesses in governance and the rule of law. These are only a few of the risks that investors must consider when investing abroad.

The failure to properly assess and account for these risks can result in:
A total loss of the investment.
Non-repayment of outstanding loans.
Reputational harm.
Civil and criminal penalties.

Practical Law, Baker & McKenzie LLP and Global Torchlight Ltd. will present the webinar, during which political risk and investment protection experts David J. Chmiel and Ed Poulton will examine the ways in which investors can mitigate these risks including:
Provisions in their loan and investment agreements.
Political and credit insurance.
Reliance on international agreements.
Comprehensive political risk due diligence.

Register for the webinar.

A short Q&A will follow.
Presenters:
David J. Chmiel, Managing Director, Global Torchlight Ltd.
David J. Chmiel advises companies on the effects of geopolitical risk on their business strategies and operations. He has a particular expertise in East and South Asia, Russia, and the CIS as well as the politicization of international commerce and the regulation of foreign direct investment for national security purposes. Before co-founding Global Torchlight, David practiced law for ten years as a cross-border M&A lawyer in the London and Chicago offices of a major global law firm.

Ed Poulton, Partner, Baker & McKenzie, LLP
Ed Poulton is a partner in Baker & McKenzie’s Dispute Resolution team, based in London. A key name in the arbitration community, Ed sits as an arbitrator in ICC and LCIA arbitrations, and is the consulting editor of a seminal text on the arbitration of M&A disputes. He advises clients on managing risk and resolving disputes relating to investment treaties, financial services and M&A.

Erlyne J. Nazaire, Senior Legal Editor, Practical Law Finance

Erlyne is a Senior Legal Editor with Practical Law’s Finance Service and is primarily responsible for writing, editing and curating Practical Law’s project finance and cross-border resources. These resources include practice notes on construction contracts, operation and maintenance agreements, loan documents and project risk assessment. In her capacity as Senior Legal Editor, Erlyne has moderated webinars on cross-border investment issues, financial covenants and public-private partnerships. Before joining Practical Law, Erlyne was an associate in Debevoise & Plimpton LLP’s international practice group where she represented clients in a wide range of cross-border transactions including project finance, private M&A and joint ventures.

Register for the webinar.

In a Fortune article, Paul Pendergrass analyzes the fall of Wells Fargo former CEO John Stumpf, finding that Stumpf underestimated the gravity of the situation three times, and each time his responses have been only strong enough to make things worse.

“When a corporation suddenly faces a public crisis of any kind – financial scandal, product recall, executive misbehavior, etc – the big question is always, ‘How strongly do we react?’ It’s often a tough call that has to be made under extreme time pressure, without all the essential facts fully known,” writes Pendergrass. “Overreact, and you can make the problem bigger than it actually is. But underreact, and you can find yourself in an irreversible nosedive.”

The writer traces the executive’s handling of the crisis, pointing to the three times he responded with too little too late.

Read the article.

A federal appeals court has found the structure of the U.S. Consumer Financial Protection Bureau to be unconstitutional but has left the agency in place to “continue to operate and perform its many duties.”

The court said the way the CFPB is organized violates the Constitution’s separation of powers because it limits the president’s ability to remove the agency’s director, currently Richard Cordray, reports James Peltz for the Los Angeles Times.

The court said the law that now allows the bureau’s director to be removed only “for cause” conflicted with the Constitution, which allows the president to remove executives for any reason.

In his written ruling, Judge Brett Kavanaugh of the U.S. Court of Appeals for the District of Columbia, rejected the notion of shutting down the CFPB and said that the bureau instead “will continue to operate and perform its many duties,” Peltz reports.

Read the article.

Attorneys representing oil and gas royalty owners with interests in the Texas Eagle Ford Shale have filed a federal lawsuit against Talisman Energy USA Inc. based on claims that the company manipulated oil and gas production volumes by as much as 20 to 30 percent and consistently shorted royalty payments, according to a news release posted by Androvett Legal Media and Marketing.

Attorneys from Texas-based Provost Umphrey Law Firm, L.L.P., are representing Eugene and Kimberly Cran of DeWitt County in their claims against Warrendale, Pennsylvania-based Talisman.

The article explains how a change in the operating agreement between Talisman and  Norway-based energy company Statoil in the Eagle Ford joint venture resulted in the Crans receiving monthly checks from both companies. But the production numbers accompanying the checks didn’t match — with Talisman reporting smaller total production.

Read the news release.

Many contracts contain no provisions regarding renewal, and the term simply ends after a specified period of time, write Peter M. Watt-Morse and Cindy L. Dole for the Sourcing @ Morgan Lewis blog.

They explain that sometimes this is appropriate:

“For example, contracts will end when a specific project has been completed or by a specified date for reasons related to intellectual property, third-party agreements, or specific business requirements. On the other hand, renewal should not be overlooked. The parties may have incurred significant start-up costs (including negotiating efforts) and want to avoid repeating those costs. For customers, the goods or services (or the price or quality of such deliveries) may not be available from other vendors. For vendors, the customer may be an important client that competitors prize. Therefore, before finalizing the term of any contract, potential renewal provisions should be reviewed.”

The article covers practical considerations of renewal, automatic renewal, and other renewal options.

Read the article.

The latest installment of Construction Dive’s “The Dotted Line” series discusses a problem many construction contractors see in their business: misinterpretation of terms in their contracts.

Writer Kim Slowey covers five of the most common sources of this misinterpretation, with input for experts.

“Most construction contractors follow custom and standard practice in the industry, or what they’ve always done in the past,” said Chicago attorney Matthew Horn, a long-time construction law attorney and founder of Legal Services Link.

The article discusses incorporation clauses, pay-if-pay versus pay-when-paid, Change orders and extras must be in writing to obtain payment, indemnify versus defend, and mechanics’ liens.

Read the article.

The executive director of the Federal Bank of Atlanta’s Center for Financial Innovation and Stability released a paper on smart contracts and their potential to change traditional legal proceedings, finding: “In many circumstances, smart contracts may eventually be a more efficient way of contracting than traditional paper contracts.”

The Cointelegraph reports that Larry Wall, in his paper titled “Smart Contracts in a Complex World,” explored the inefficiency of paper contracts in legal proceedings, which is primarily caused by ambiguity in the language of the law.

“The majority of contracts that are formed between two parties to ensure the fulfilment of the established agreements are often incomplete, because of the difficulty in stating every possible situation where the contract can be utilized,” according to the Cointelegraph article.

“Wall believes smart contracts demonstrate a series of major advantages of paper contracts,” it continues.

Read the article.

Image by Intropin

Mylan NV has announced it will pay $465 million to settle questions of whether it underpaid U.S. government healthcare programs by misclassifying its EpiPen emergency allergy treatment, Reuters is reporting. The announcement comes as the company is under intense scrutiny after a series of drastic price increases.

“Mylan has been lambasted by consumers and lawmakers for raising prices on the lifesaving EpiPen sixfold to over $600 for a package of two in less than a decade, making the devices unaffordable for a growing number of families,” writes Deena Beasley.

At issue is whether Mylan made more money on EpiPen than warranted from state Medicaid programs by having it classified as a generic product. That classification yielded much smaller rebates to the government health plans. Beasley explains that the Medicaid rebate for a generic prescription drug is 13 percent, compared with a minimum 23.1 percent for a branded drug.

Read the article.

In what it described as a case of first impression, the Northern District of California ruled that a professional liability policy that excluded the insured’s “assumption of liability obligations in a contract or agreement” did not extend to breach of warranty or false advertising claims arising out of a genetic data testing company’s marketing and sale of a personal genome service, reports Mary McCutcheon of Farella Braun + Martel LLP.

She writes in the article on the firm’s website that Ironshore Specialty Ins. Co. v. 23andMe, Inc. is noteworthy by the fact that the insurer challenged coverage on this ground.

“While this issue apparently has never been decided in the context of a professional liability policy, both case law and custom and practice recognize that the same phrase used in a general liability policy applies only to liabilities ‘assumed,’ i.e. created by, a contractual indemnity agreement,” according to McCutcheon.

Read the article.

A Dallas Morning News profile of Dallas Cowboys general counsel Jason Cohen tells how the New Jersey native thought his job interview with team owner Jerry Jones was going pretty well until Jones asked him if he was a Cowboys fan. He confessed to being a Giants fan.

“Mr. Jones, if I am selected to be your general counsel, I’m going to need to be in a position where I tell you the truth and tell you things you don’t want to hear and not sugar-coat anything,” Cohen replied, according to the profile by Mark Curriden of The Texas Lawbook. Jones brought him onto the legal team.

In his three years with the Cowboys, Cohen has handled big deals for the Cowboys and the Jones family, including negotiating with AT&T over naming rights for the team’s stadium, advising the Jones family on the development of its new practice facility and headquarters, working on contracts for players and coaches, and negotiating media and sponsorship deals.

Read the article.

The enactment of new Federal Aviation Administration (FAA) regulations governing unmanned aircraft systems – or “drones” – has companies and consumers alike dreaming of the stuff of science fiction, but if the new regulations are any indication, the FAA is in no rush to see those dreams become reality, write Sarah L. Bruno, Anthony V. Lupo and Daniel B. Jasnow of Arent Fox LLP.

The new regulations permit use of drones for some commercial purposes, but the FAA declined to clear the way for package delivery by drone, according to the article on the firm’s Behind the Scenes blog.

“Although not a blank check for commercial interests, the FAA’s new rule on commercial drone use likely signals just the beginning of a long regulatory debate over the commercial use of unmanned aircraft, as well as the potential safety and privacy concerns that should, or should not, influence such a debate,” the authors write.

Read the article.