The Securities Law Blog provides commentary and news on the latest securities law developments impacting established and emerging growth publicly-traded issuers and investment banks, as well as entrepreneurs and venture-backed private entities. Our blog closely follows SEC rulemaking in several key areas including public and private securities offerings, shareholder activism and equity investment, and mergers & acquisitions.
The authors of this blog are members of the Corporate/Securities practice of Olshan Frome Wolosky LLP. Since our founding, this firm has been distinguished by responsive, independent and client-focused legal services provided by lawyers with a profound commitment to the companies they serve. This blog is an outgrowth of this representation of our clients in a wide range of capital market transactions.
On April 9, 2020, the Federal Reserve announced the details of a new program established under the CARES Act, the Main Street Lending Program, intended to assist small and medium-sized businesses impacted by the COVID-19 pandemic by making up to $600 billion in loans available for eligible borrowers. The program is designed for businesses with up to 10,000 employees or up to $2.5 billion in 2019 revenues. This client alert summarizes the terms of the loans available under this new program.
In a client alert issued by Olshan's Shareholder Activism Group last week, we reported that certain factions within the Delaware State Bar Association were attempting to fast track an amendment to Section 110 of the Delaware General Corporation Law that would allow Delaware corporations to postpone their annual meetings of stockholders in light of the COVID-19 pandemic. We expressed serious concerns that the proposed amendment could be abused by corporations looking to postpone their annual meetings and disenfranchise stockholders under the pretense that such a delay is required due to COVID-19. Shortly after the release of our client alert, Governor John Carney issued on April 6 the tenth modification to his State of Emergency Declaration relating to COVID-19 intended to reduce the number of in-person stockholder meetings held by Delaware corporations in order to protect the health and safety of the civilian population in light of the pandemic. As discussed in this client alert, we believe the Governor's order is sufficient to allow corporations to address COVID-19 related logistical challenges they may be facing with respect to their meetings and there is no need for state legislators to rush to adopt a statutory amendment that could threaten stockholder rights.
As businesses in the current environment are looking for ways to conserve or obtain liquidity, we have set forth below some avenues to liquidity, one or more of which might be applicable to your business.
On March 25, 2020, the SEC issued an updated executive order granting extended filing relief and disclosure guidance as publicly traded companies address the COVID‑19 pandemic and its effect on operations and financial condition. The SEC Staff also recently issued a statement regarding the manual signature requirement for electronic filings with the SEC. This post summarizes the significant aspects of the SEC’s recent pronouncements.
Despite the continuing coronavirus global pandemic, business marches on, including compliance with applicable regulatory requirements. Regulatory bodies recognize that the reduced staffing, “social distancing” and other factors could hamper efforts to comply with various regulations. The U.S. Securities and Exchange Commission (“SEC”) has acted to ameliorate certain of the burdens publicly traded companies are currently facing. In addition, companies need to take into account the effects of COVID-19 on their businesses and regulatory disclosures, and we have highlighted certain significant considerations in this client alert.
On January 30, 2020, the Securities and Exchange Commission (“SEC”) proposed a series of new amendments to the Regulation S-K requirements. The proposed amendments seek to modernize, simplify, and enhance certain financial disclosure requirements primarily by reducing duplicative disclosure and focusing issuers’ efforts on material information. The proposal would eliminate Items 301 and 302, which deal with selected financial data and supplementary financial data, respectively. The SEC’s primary focus is on Item 303. This item addresses disclosure requirements in the Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) section of issuers’ periodic reports (i.e., Forms 10-K and 10-Q) and registration statements.
In Casper Sleep’s initial public offering prospectus, the company states that the use of third-party paid marketing programs to promote its products presents the possibility of negatively affecting its reputation and subjecting it to fines and other penalties.
On February 3, 2020, Olshan’s Shareholder Activism Group issued a letter of comment to the Securities and Exchange Commission in response to its proposed amendments to the federal proxy rules released on November 5, 2019 that would condition the availability of certain existing exemptions from the information and filing requirements of the proxy rules for proxy voting advice businesses upon compliance with additional disclosure and procedural requirements. The scope of our comments is limited to the severe shortcomings of the proposed rules in terms of their practical application in the “real world” of a proxy contest. We have drawn upon our vast experience in advising on hundreds of contested solicitations to highlight the flaws inherent to the proposed rules.