Theranos Inc. investors accused the company of threatening to file for bankruptcy protection if they don’t agree to give up their rights to sue the firm over its flawed blood-testing business, reports Bloomberg Law.

Reporters Jef Feeley and Caroline Chen write that officials of Partner Investments LP and two other funds, which invested more than $96 million in Theranos preferred shares, said a lawyer representing the privately held medical-testing company suggested it would seek Chapter 11 protection if the investors won’t abandon their lawsuit and accept more equity instead.

Theranos officials have disputed the investors’ claims, saying they discussed the exchange offer with investors before the suit was filed.

“Having said it will no longer sell tests to consumers after running into trouble with U.S. regulators, Theranos and Chief Executive Officer Elizabeth Holmes are fighting for the company’s life,” according to Bloomberg. “It’s facing multiple suits by investors who claim they were misled about the technology and want their money back, and it is refocusing on research.”

Read the Bloomberg article.

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Bloomberg Big Law Business is convening leaders of corporate legal departments and law firms to address the diversity and inclusion challenge at a unique invitation-only event – the 4th Big Law Business Diversity Symposium.

The event will take place 8-10 a.m. Wednesday, May 10, 2017, at Bloomberg Government, 1101 K St NW, Suite 500, in Washington, DC 20005.

Request your invitation today to attend sessions such as:

Leading the Profession: Success Stories
Corporate legal departments see the most successful relationships when their goals and their law firm’s priorities are aligned. Hear how peers are approaching this effort and measuring success.

Inspiring Accountability: A Workshop
Big Law Business will facilitate a workshop on how to have the tough conversations on accountability for diversity and inclusion measures. Explore solutions to inspire leaders to create the incentives, models, and structures to increase diversity and stronger inclusion of ideas and skills in the profession.

Symposium Wrap-Up
Accountability measures that resonate: how the workshop results match back to traditional measurements of progress in the diversity of the legal profession.

The event is sponsored by Major, Lindsey & Africa and Quarles & Brady.

Request an invitation.

The National Association of Corporate Directors has published a guide that reviews the three main indicators of an effective partnership between the general counsel and the board. The guide is available for free downloading.

Those three indicators include:

• aligned role expectations
• open and direct communication
• enhanced dialogue on risk oversight

Over the past few years, the role of the general counsel has grown in both scope and stature, the NACD says on its website. Once seen purely as legal advisors, many general counsel now spend much of their time serving as strategic advisors, regularly providing strategic direction to the CEO and to the board of directors.

General counsel should recognize that directors’ expectations of them go beyond their traditional legal role and that their unique legal and ethical perspective strengthens their ability to help mitigate organizational risk.

Download the guide.

More than 1,700 compliance professionals are expected to attend the 16th Annual Compliance & Ethics Institute in Las Vegas Oct. 15-18, 2017.

The event — at Caesars Palace — will be presented by the Society of Corporate Compliance & Ethics Institute.

The agenda calls for more than 150 speakers in more than 110 sessions.

Learning tracks will include ethics, risk, case studies, compliance lawyer, multi-national/international, IT compliance, general compliance/hot topics, and advanced discussion groups.

New for 2017 is a full-day pre-conference workshop on building professional skills.

Register for the event.

Practical Law has completed its annual survey of public M&A transactions, the fourth to analyze deal-protection measures binding target companies.

The company will discuss the survey results in a complimentary 60-minute webinar scheduled for April 26 at 1 p.m. EDT.

This year’s edition reviews the first full year of public merger deals to have been negotiated following the Delaware Supreme Court’s seminal 2015 decision in Corwin v. KKR, which held that an informed stockholder vote can restore the presumptions of the business judgment rule in the target board’s favor. The study provides a timely snapshot of how practitioners have begun responding to this increased deference toward director decision-making in M&A.

The Practical Law study examines how various deal characteristics — including buyer type, form of consideration, deal size, and financing—affect the negotiations and ultimate agreement between the transaction parties. The study also reviews the deal protections negotiated by buyers who require their own stockholder approval before closing. This analysis has two goals: to learn how frequently those buyers agree to symmetrical deal-protection measures, and to determine how reciprocally binding covenants and remedies affects the deal protections agreed to by the target company.

Daniel Rubin, Senior Legal Editor, Practical Law Corporate and M&A and primary author of the study, will review the study’s results, including its findings on no-shop and go-shop provisions, fiduciary outs and matching rights, termination rights, and break-up fees.

Following the webinar, attendees will receive a link via e-mail to these Practical Law resources:

Fiduciary Duties in M&A Transactions
Fairness Opinions

Register for the webinar.

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The third-generation leader of South Korea’s top conglomerate was mostly silent at his first court appearance in what has been called the “trial of the century,” as his lawyers labored to portray him as an innocent bystander in a graft scandal, reports Reuters.

Jay Y. Lee, the 48-year-old de facto leader of Samsung Group, could face a prison sentence of up to 20 years on charges including bribery and embezzlement in a scandal that led to the ouster of President Park Geun-hye, writes Joyce Lee.

“The leader of the smartphones-to-biopharmaceuticals business empire is the only founding family member among the country’s most powerful conglomerates, called chaebol, to be indicted in a graft scandal that led to Park becoming South Korea’s first democratically elected leader to be removed from office,” according to the report.

Read the Reuters article.

Seth J. Pritikin has joined Neal Gerber Eisenberg in its Corporate & Securities practice group as a firm partner.

Pritikin experience includes mergers and acquisitions, divestitures, equity carve-out transactions, leveraged buyouts, joint ventures, growth capital investments, corporate restructurings and representations of large and middle market private equity funds, the firm said in a release.

“The addition of Seth to our team expands our ability to meet the needs of our corporate and private equity clients,” said David S. Stone, chair of NGE’s Corporate & Securities practice. “His wealth of experience with complex domestic and cross-border transactions adds value not only to our group but also to the services we offer to our clients.”

“Our strategic focus remains to be a destination for exceptional talent seeking an inclusive, collaborative and industrious culture; Seth clearly fits that bill. We are elated to have Seth join us and further enhance our ability to provide our clients with first-rate counsel,” commented NGE Managing Partner Scott J. Fisher.”

Pritikin graduated cum laude from Harvard Law School in 2007 and earned his A.B., magna cum laude, from Harvard University in 2003. Prior to beginning his legal career, Pritikin was a strategy consulting analyst with Dean & Company. Most recently, Pritikin was a partner at Kirkland & Ellis LLP.

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Wallace Global Fund wasn’t Morgan Lewis & Brockius’ biggest client, but it still made a big splash when it fired the BigLaw firm because it is “enabling” President Trump to use his new office for his own personal gain.

Bloomberg Law reports that that H. Scott Wallace, co-chair of the Wallace Global Fund, fired the firm in a letter to chair Jami McKeon.

“The letter points the finger at Morgan Lewis partner Sherri Dillon, who appeared next to the president in a Jan. 11 press conference, where she announced she had devised a plan so that the public could rest easy that Trump’s sprawling real estate, hotel and other business interests would not create any conflicts with his elected role,” writes Gabe Friedman.

The letter cites Trump’s business meetings at his Florida resort, Trump’s criticism of Nordstrom’s for dropping his daughter’s clothing line, and other reasons.

Read the Bloomberg article.

President Trump has named Makan Delrahim, a former government antitrust enforcer and corporate lobbyist, to lead the Justice Department’s review of mergers and acquisitions, The New York Times reports.

Companies are hoping that the new Republican administration will be more permissive with mergers than the Obama administration was, writes Cecilia Kang. Trump’s predecessor blocked dozens of blockbuster deals over the past eight years, including AT&T’s bid for T-Mobile in 2011 and Comcast’s merger with Time Warner Cable in 2015.

“Mr. Delrahim, who serves as legal counsel to the president, will be quickly tested in his new position by AT&T’s $85 billion bid for Time Warner, which is set to be reviewed this year. Other mergers under review include Dow Chemical’s bid for Dupont and Bayer’s acquisition of Monsanto,” Kang writes.

Read the NYT article.

Valeant Pharmaceuticals International Inc.’s former chief executive officer accused the drugmaker of failing to deliver 3 million shares promised him as part of an exit package, reports Bloomberg.

Michael Pearson resigned in May as the value of Valeant’s shares dropped and it became the subject of U.S. Justice Department and congressional investigations, write David Voreacos and Cynthia Koons.

They report that Pearson is claiming the company promised him 580,676 restricted shares and 2.46 million performance shares. Those shares would have a market value of more than $30 million, although exhibits to the lawsuit suggest the value for Pearson could be higher.

Read the Bloomberg article.

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Dennis Garcia, Microsoft Corp, assistant general counsel, offers an insider’s perspective on how in-house counsel trying to “sell” themselves to their business clients and senior legal department leaders. His observations are published on the Bloomberg Law website.

He starts at the beginning: “Start Strong:”

“Make sure to capture the hearts and minds of in-house counsel at the  very beginning of your pitch. If you do not generate a high level of enthusiasm, energy and compelling reason for in-house counsel to focus on your message early on in your presentation, you will not command their attention and they will lose interest.”

Other observations come under headings such as: know your audience, keep it simple,differentiate, the technology factor, highlight client references, don’t forget cybersecurity, and post-pitch activity.

Read the Bloomberg article.

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Amazon.com scored a big victory Thursday against the IRS in a case that the company says could have cost it about $1.5 billion, reports The Seattle Times.

The IRS contended that the e-commerce giant had inappropriately brought down its U.S. tax bill by grossly undervaluing the assets it transferred to its Luxembourg subsidiary, which the company created more than a decade ago.

“Judge Albert Lauber of the U.S. Tax Court ruled that the IRS’ determination of those assets’ worth was ‘arbitrary, capricious, and unreasonable.’ He also broadly sided with Amazon on the way the U.S. company calculates how it shares costs with its European subsidiary,” writes reporter Ángel González. “The ruling, in favor of Amazon, untangles part of the complex web of tax litigation the retailer faces as authorities in the U.S. and Europe review how they deal with global companies that straddle many jurisdictions seeking advantageous tax deals.”

Read the Seattle Times article.

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Reuters is reporting that more than 100 institutional investors opposed efforts by the U.S. securities regulator to delay a rule requiring companies to disclose a ratio comparing their chief executive’s pay with their workforce median.

The letter, signed by representatives of more than 100 unions, pension funds, activist investors, state treasurers and consumer advocacy groups urged Acting U.S. Securities and Exchange Commissioner Michael Piwowar not to delay the implementation of the rule, writes Sarah N. Lynch.

The requirement went into effect in January and could result in disclosures in many companies’ 2018 proxy statements unless the rule is delayed.

Piwowar said earlier this year that the SEC was accepting public comments on the rule, with an eye possibly to delaying implementation.

Read the Reuters article.

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Shareholder activists are pushing back against a major business trade group’s request that the White House use its influence on the U.S. securities regulator to make it harder to get governance, political or environmental issues onto corporate ballots, according to a letter seen by Reuters.

Reporter Sarah N. Lynch writes that existing U.S. Securities and Exchange Commission rules have “given shareholders an important voice,” and should not be changed, the five investor groups said in a March 15 letter to the White House’s National Economic Council Director Gary Cohn.

SEC rules now allow shareholders to submit proposals to corporate ballots if they own $2,000 or 1 percent of a company’s outstanding stock. The SEC can override a company’s objections if the proposal meets certain legal standards and should be on the ballot, Lynch explains.

Read the Reuters article.

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Before she was fired as CEO of Yahoo, Marissa Mayer’s golden parachute was estimated to be as high as $55 million. So the figure recently announced — $23 million — may not seem so outrageous.

“But looks can be deceiving,” writes reporter Michael Hiltzik for The Los Angeles Times. “One reason Mayer’s severance package appears to have shrunk is that the company’s latest disclosure leaves off tens of millions of dollars in stock options held by Mayer as of March 8, but already vested. So they aren’t subject to the accelerated vesting of $20 million in stock incentives that would result from the sale and Mayer’s departure from the company. That acceleration would provide the bulk of her severance.”

Because $56.8 million in options evidently have vested since the sale of the company to Verizon deal was announced in July, it’s reasonable to add them to the invoice, Hiltzik explains. “That puts Mayer’s out-the-door price nearer to $80 million.”

He said the situation raises some questions, including: Do America’s boards have any ability to distinguish good performance from bad, and pay their executives accordingly?

Read the LA Times article.

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A federal jury in Brooklyn convicted a former Hunton & Williams partner of insider trading charges of tipping off his financial adviser to his client King Pharmaceuticals’ then-pending $3.6 billion acquisition by Pfizer Inc., reports Bloomberg Law.

Robert Schulman of McLean, Va., was convicted of securities fraud and conspiracy charges. Post-trial defense motions are due April 14.

Schulman had represented King Pharmaceuticals Inc. in a patent case against Purdue Pharma LP as a lawyer with Hunton & Williams, the report says.

The indictment says Schulman tipped off his investment adviser of Klein Financial Services in Valley Stream, N.Y., about a Pfizer takeover plan during a dinner in August 2010 after having learned of it from another Hunton lawyer. During that dinner Schulman had several glasses of wine when he blurted to his adviser, “It would be nice to be King for a day,’” according to the SEC.

The adviser traded on the information and made profits for himself, Schulman and some other clients.

Read the Bloomberg article.

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Freeborn & Peters LLP announces that attorneys Kenneth M. Crane and Rita W. Garry have joined the firm’s Chicago office as members of the Corporate Practice Group. Crane is a partner and Garry serves as senior counsel.

“Kenneth and Rita both bring extensive experience in corporate and business law matters on behalf of clients in diverse industries,” said Freeborn’s Co-Managing Partner Michael A. Moynihan. “We are enthusiastic about having these two join our corporate practice, which focuses on helping middle-market companies and businesses of all sizes meet their challenges and achieve their full potential.”

In a news release, the firm said:

Crane is a deal lawyer who represents private equity, venture capital and family office clients, focusing on acquisitions and sale transactions. He works with entrepreneurs and companies from inception through closing of realization transactions. He also represents the portfolio companies of his private equity, emerging growth and other clients in a wide range of commercial transactions and legal matters, including equity-based compensation plans, manufacturing, distribution and sales agreements, and intellectual property licensing and development. Crane most recently was a partner with Perkins Coie LLP.

Crane earned his law degree from the University of Illinois College of Law and his Bachelor of Arts from the University of Illinois at Urbana-Champaign.

Garry focuses her practice on serving as outside general counsel to many small and middle market companies across an array of industries. With over 30+ years’ experience, Garry works closely with business owners, executive management teams, and stakeholders throughout the business’ life cycles, including entity design and maintenance, commercial transactions, mergers, acquisitions, business sales, joint ventures, corporate governance and succession planning. Additionally, Garry works to assist clients in capital market transactions and finance, including private securities offerings under Regulation D and the new equity crowdfunding exemption. She most recently was a corporate and transactional partner at Golan Christie Taglia LLP. Previously, she served as a partner and chair of the corporate practice group at SmithAmundsen LLC.

Garry earned her law degree from Boston University School of Law and her Bachelor of Arts from Lake Forest College.

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New York will seek to question top Exxon Mobil Corp. executives under oath as part of a probe into the accuracy of the company’s statements about climate change after discovering an email alias used by former Chief Executive Officer Rex Tillerson, according to a Bloomberg report.

“Tillerson, now U.S. Secretary of State, used the name Wayne Tracker for his secondary internal email account at Exxon, created for sending the most sensitive messages to and from company board members, including communications about the risks associated with climate change, New York Attorney General Eric Schneiderman said Monday,” writes reporter Erik Larson.

Carl Barnes, a former corporate general counsel who’s a lawyer at Morse, Barnes-Brown & Pendleton PC, told Larson that someone in Exxon’s general counsel’s office knew or should have known about the alias account.

Read the Bloomberg article.

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The National Association of Corporate Directors will present a complimentary webinar on reassessing the evaluation process on evaluations on director performance. The event will be Thursday, March 23, at 2 p.m. EDT.

“Given the increased emphasis on director performance, board evaluations have become commonplace in the boardroom over the last few years,” NACD says on its website. “The benefits of the evaluation are clear, including improving performance around identified opportunities, reviewing board composition relative to strategy, and communicating board effectiveness more effectively to shareholders. It is important, however, to periodically reassess the evaluation process to incorporate new leading practices and prevent complacency.”

Presenters will discuss how other boards:

• Align their evaluation process with the company’s strategy
• Incorporate peer-to-peer reviews
• Keep board members engaged in the evaluation process

Register for the webinar.

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The House is poised to pass three bills this week championed by industry that may tilt the civil litigation process in favor of business in thousands of cases each year, reports Bloomberg BNA.

The far-reaching bills address class actions, asbestos cases and attorneys who file “frivolous” suits, writes Bruce Kaufman.

The fast-track approach is deemed essential to give the bills time to advance in the more-deliberative Senate, where 60 votes are needed to overcome an almost certain filibuster.

The bill rewrites class-action practice, aids defendants striving to keep cases out of plaintiff-friendly state courts, punishes attorneys who file dubious claims, and seek to put new limits on settlements entered into by the Department of Justice and the EPA. They also would require more disclosures by asbestos victims who seek compensation from bankruptcy trusts.

Read the Bloomberg article.

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