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Fairchild Morgan Law / Publications

SEC Proposes Changes to Financial Disclosures for Acquisitions

May 15, 2019 | Earlier this month, the U.S. Securities and Exchange Commission proposed amendments to the rules governing financial statement disclosures for business acquisitions and dispositions. The proposed amendments are intended to reduce the cost and burden of preparing historical statements and pro forma financial information in connection with acquisitions or other business combinations for public companies. The proposal amends Rule 3-05 (relating to historical financial statements) and Article 11 of Regulation S-X (relating to pro forma financial information). The...

SEC Adopts Rule to Simplify Redacting Confidential Information in Exhibit Filings

March 26, 2019 | On March 20, 2019, the SEC adopted a rule that will allow companies to omit confidential information from most exhibits without filing a confidential treatment request. In this significant development, registrants may now omit confidential information from material contracts filed under Item 601(b)(10) of Regulation S-K and agreements under Item 601(b)(2) without submitting a confidential treatment request (CTR) if and when the registrant determines that such information is (i) not material and (ii) would likely cause competitive...

Self-Reporting May Help Token Issuers Avoid SEC Civil Penalties

March 19, 2019 | Last month, the SEC announced it had settled an enforcement action against Gladius Network LLC for failing to register its initial coin offering, a violation of Section 5 of the Securities Act of 1933. The settlement, which was devoid of civil penalties, underscores two key points: a) the offer and sale of distributed ledger or blockchain tokens can be considered sales of securities and, as such, must be registered unless a valid exemption from registration is...

2019 M&A Trend Alert

February 8, 2019 | Over the past several years, the M&A insurance space has changed significantly, particularly as it relates to representation and warranty (R&W) insurance. Historically, R&W insurance – in the context of M&A transactions – has been an underutilized and virtually obscure product. Today, however, more entities recognize the myriad benefits it provides for both buyers and sellers. R&W insurance may enable buyers to offer more competitive bids, while sellers oftentimes receive a higher percentage of the sale proceeds...

SEC Moves to Enforce “Equal or Greater Prominence” in Financial Disclosures Containing Non-GAAP Information

January 24, 2019 | In December 2018, the Securities and Exchange Commission (SEC) announced it had entered into a settlement with ADT Inc. after finding the company had emphasized non-GAAP financial measures above comparable GAAP measures in two earnings releases. The Commission imposed a $100,000 fine for violation of Section 13(a) of the Securities Exchange Act of 1934, which, through application of Regulation S-K, requires GAAP financial measures to have “equal or greater prominence” as non-GAAP information within a company’s...

Enforceability of Trump Steel Tariffs May Depend on 50-Year-Old Law

Geoff Morgan was asked by Lawyer Monthly to comment on the pending lawsuit by the American Institute for International Steel (AIIS) challenging the constitutionality of President Trump's steel tariffs. Read more about the the challenges AIIS faces in what is sure to be an uphill battle in an uncertain political landscape. Morgan Legal Group Commentary on AIIS Lawsuit...

Illinois General Assembly Passes Bill, Establishing Statewide Historic Preservation Tax Credits

ILLINOIS GENERAL ASSEMBLY PASSES BILL, ESTABLISHING STATEWIDE HISTORIC PRESERVATION TAX CREDITS If signed into law, the bill would be a boon for developers of historic properties in Illinois June 12, 2018 | Earlier this month, the Illinois General Assembly passed SB3527, a bill which both amends and expands the River Edge Redevelopment Zone Historic Tax Credit (RERZ) and establishes a new statewide Illinois Historic Preservation Tax Credit, effectively incenting developers to undertake historic reuse projects across Illinois. If signed into law, the bill...

SEC Issues Guidance on Cybersecurity Disclosure

SEC ISSUES GUIDANCE ON CYBERSECURITY DISCLOSURE March 1, 2018 | The Securities and Exchange Commission (SEC) has issued interpretive guidance to assist public companies in preparing disclosures related to cybersecurity risks and incidents. The guidance represents the first of its kind released by the full Commission on the topic of cybersecurity for public companies. The 2018 interpretative release expands on guidance from 2011, which first outlined cybersecurity disclosure obligations. The latest interpretation also addresses two topics not previously developed by SEC staff:...

HAVE AN ESCAPE HATCH: EXIT STRATEGIES FOR UNWINDING JOINT VENTURES

HAVE AN ESCAPE HATCH: EXIT STRATEGIES FOR UNWINDING JOINT VENTURES Starting a joint venture is often exhilarating. The parties have grand plans for the future, and the decision to launch is most often the result of thorough analysis with a vision for the future and the conclusion that the whole will be significantly greater than the sum of the parts. The participants are eager to move forward and begin realizing the success of the venture. Because the venture partners are, at...

SIGNIFICANT DEVELOPMENTS FOR 2018 PROXY STATEMENTS AND ANNUAL REPORTS

SIGNIFICANT DEVELOPMENTS FOR 2018 PROXY STATEMENTS AND ANNUAL REPORTS It is time to begin planning for the 2018 proxy and annual reporting season. There are several developments this year, most notably the new pay ratio disclosure. Also, current geopolitical developments require a thorough review of risk factor disclosures in the Annual Report on Form 10-K. Here is an overview of the key matters that you should consider as you prepare for the proxy and annual reporting season. Pay Ratio Disclosure. Most public...