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#BLT: July 2015

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Feature Articles

Recent Developments Related to the SEC’s Shareholder Proposal Rule

By Elizabeth A. Ising, Kasey L. Robinson

There were three significant developments relating to Rule 14a-8, the SEC’s shareholder proposal rule, during the 2015 proxy season that have the potential to change the shareholder proposal landscape for years to come: (1) the proliferation of proxy access shareholder proposals; (2) the SEC staff’s decision not to express its views on the exclusion of conflicting shareholder proposals; and (3) the Third Circuit holding that a shareholder proposal submitted to Wal-Mart Stores, Inc. was excludable under Rule 14a-8.

Overcoming the Challenge of Director Misconduct

By Elizabeth M. Dunshee, Jayne E. Juvan, Christian Douglas Wright

A board of directors, which acts collectively, needs to function effectively, but there are times when a board’s culture is not collegial, supportive, or respectful, and unhealthy dynamics have taken hold in the boardroom. This article discusses a board’s duties and responsibilities, as well as potential avenues a board may take when a director engages in misconduct.

When the Tides Turn: Fiduciary Duties of Directors and Officers of Distressed Companies

In the aftermath of corporate distress, the directors and officers of a company may find that their actions and decisions are challenged by various creditor and shareholder constituencies. Often, such challenges are presented as claims of breaches of fiduciary duty. This article will consider what corporate directors and officers (and the lawyers who represent them) should know about fiduciary duties in the zone of insolvency and beyond.

Departments

KEEPING CURRENT: Recent Developments in the Commercial Division of the New York State Supreme Court (Part Two)

By Hon. Timothy S. Driscoll

Last year, the author reported on the many then-recent changes that had taken place in the Commercial Division of the New York State Supreme Court to ensure the expeditious resolution of business cases. There has been “no rest for the weary,” however, as the Chief Judge’s Commercial Division Advisory Council continues to recommend innovations to streamline the resolution of business disputes.

DELAWARE INSIDER: Delaware Supreme Court Clarifies Divide Between Direct and Derivative Claims in Breach of Contract Actions and Demonstrates the Value of the Certified Question

By Stephen B. Brauerman, Sara E. Bussiere

In NAF Holdings, LLC v. LI & Fung Trading Ltd. (Del. June 24, 2015), the Delaware Supreme Court, in response to a question submitted by the Second Circuit, clarified the distinction between a direct and derivative action and held that “a suit by a party to a commercial contract to enforce its own contractual rights is not a derivative action under Delaware law,” even where the only economic damage the plaintiff suffered was to the value of stock of two wholly owned subsidiaries. The NAF Holdings decision also illustrates how the Supreme Court’s authority to answer questions certified to it allows the Court quickly and efficiently to decide critical legal issues as they arise, and to develop and strengthen Delaware’s corporate law.

ETHICS CORNER: Bridging an Executive’s Past and Present: The Unintended Consequences of the Facilitation of a Future Business Relationship

By Mneesha O. Nahata

Ethics are not just for lawyers. Strategic partnerships with related parties can raise similar issues.

MEMBER SPOTLIGHT: An Interview with Renie Yoshida Grohl

The progression of Renie Yoshida Grohl's legal career was not the result of a master plan, but of good fortune. "All these job opportunities came to me," she said. "I have to tell you, I feel very fortunate." In private practice, she spent the majority of her time representing savings and loan associations. She then served as Senior Vice President and Group Executive for Regulatory Affairs at the U.S. League of Savings Institutions, Deputy General Counsel at the Federal Housing Finance Board, and Senior Vice President and Deputy General Counsel at Fannie Mae. She currently serves as the Budget Officer for the Business Law Section of the ABA.

Inside Business Law

This month, Inside Business Law highlights the In The Know and Business Law Basics webinars to be offered in July and the Section’s Annual Meeting from September 17–19 in Chicago, with links to registration information. Summaries of the articles published in the Summer Edition of The Business Lawyer and several recent Committee newsletters, with links to each, are also included in this issue of Inside Business Law.