Last month, President Bush signed into law the Class Action Fairness Act of 2005, which enables certain lawsuits commenced in state courts to be removed by a defendant to federal district court. The Act applies to class actions with more than 100 class members seeking more than $5 million, where at least one of the […]
Sabatini Joanna
Posted inFrom the Archive
An Analysis Of Executive Pay After Big Mergers
The rash of corporate mergers and acquisitions erupting in recent months is fueling a re-examination of big pay packages for top executives at acquired companies. Earlier this month Equilar, a compensation analysis firm in San Mateo, California, reviewed the executive compensation and severance plans triggered by 10 mergers and acquisitions announced last year. Although not […]
Posted inBoards & Shareholders
WorldCom, Enron Settlements Could Yield Tougher Directors
Company board members have escaped the punishment meted out to executives and sometimes their lawyers and accountants for corporate fraud. Until now. Earlier this month former directors at WorldCom and Enron agreed to pay millions to settle shareholder lawsuits. Though the cases themselves are separate and the circumstances differ, both settlements mark a watershed event […]
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Volatility Assumptions Play Key Role In Stock Option Valuations
Now that companies must report stock options as expenses and deduct them from earnings, they are deliberating over how to calculate the lowest possible value of options. According to experts, one way to lower value is to reduce the estimate of how much a stock will fluctuate during an option’s term. Expected stock volatility is […]
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New Risks As Cos. Hire Counsel To Investigate Fraud
A recent report that the Securities and Exchange Commission may sue a company’s outside lawyer for his role in an internal investigation has put renewed emphasis on the role and risks of “gatekeepers” in the post-Sarbanes-Oxley era. The move comes as corporate boards and committees are increasingly hiring outside lawyers to investigate accusations of fraud […]
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SEC Crackdown Not Relevant To Most Functioning Cos.
The Securities and Exchange Commission suspended trading of 26 small, barely operating or defunct companies earlier this month because they had not filed quarterly and annual reports in one to nine years. Securities lawyers say the Securities and Exchange Commission seldom suspends trading, especially as a punishment for missing or late financial paperwork. Instead, companies […]
Posted inBoards & Shareholders
Troubled Company Directors Impacted By Delaware Ruling
Creditors may sue directors of companies that can’t pay their debts, but the board members can protect themselves with the same provision that shields them from certain shareholder lawsuits, Delaware’s Court of Chancery ruled last month. It’s long been settled in Delaware law that when a company is insolvent, the directors have fiduciary duties to […]