News and Recent Events

Data breaches are expensive. They cost an average of $5.4 million each to US companies in 2011 for mitigation and remediation alone, while also causing significant harm to brand and reputation.  The first 24 hours after you discover a breach are critical to restoring security, minimizing harm, obtaining and preserving evidence and complying with contractual and legal obligations.  Read here for tips on responding to a breach.
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CB Insights created the below infographic on October 26, 2015 illustrating the rise of unicorn companies since 2011. This graphic is particularly interesting when viewed together with CB Insights’ blog post this morning (January 7, 2016) that recaps FY 2015 venture financing data.  CB Insights’ recent data shows that while FY 2015 was a record-setting year for venture financings, there was a dramatic drop in the number of mega financings in Q4 2015 (which mega deals had previously been driving the record level).  In any event, the graphics
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Just a reminder to those who have Delaware corporations, your annual report and franchise tax payment are both due by March 1. At this point, you have likely already received from Delaware your notification of annual report and franchise tax due, which is sent to a corporation’s registered agent in December or January of each year. Delaware requires these reports to be filed electronically.

As you will notice, there are two methods that you can use to calculate the amount of Delaware franchise tax due for your corporation (
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From our colleague Michael McKee

The EU has adopted a new regulation, which will introduce a new legal framework for electronic signatures, seals, time stamps and electronic documents.

These rules aim at creating a uniform regime across EU for the mutual recognition of electronic identification between member states. This new regulatory framework (910/2014/EU) was published in the Official Journal of the EU on 28 August 2014 under the name “Regulation on electronic identification and trust services for electronic transactions in the internal market” (commonly referred as “e-IDAS” Regulation).

It will
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Every so often a public company finds itself unable to file periodic reports for a protracted time.  For example, a company may upgrade auditors and the new firm may advise of the need to re-audit prior years, which can take significant time.  Until there is a reliable starting point for financial statements, new filings are in limbo.  As time marches on, the older missed filings have less and less signficance to investors but would still entail the same amount of effort and expense to complete as any periodic report.

Over
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Earlier today PitchBook released its M&A Report for Q3 2015 and the stats indicate continued strength in merger and acquisition activity.

While the overall deal count for Q2 2015 was down (4,250 deals with an aggregate value of $416 billion) as compared to the prior quarter (4,803 deals with an aggregate of $560 billion) and prior year (5,183 deal with an aggregate of $373 billion), the average transaction size spiked to $1.103 billion in Q2 2015 as compared to $795.3 million in Q1 2015 and $231.9 million in Q2 2014.
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PitchBook just released its analysis of Q2 2015 venture capital activity by region, focusing on the six of the most active U.S. regions: the Bay Area; Boston; Los Angeles; the Midwest; New York; and the Pacific Northwest.  Below is also a quick summary of the Q2 2015 highlights by region:

Bay Area:

  • The median pre-money valuation for Q2 2015 was $63.5m (up from $29m for Q4 2014).
  • The most active sector (by both deal count and capital invested), by a wide margin, was


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The SEC has proposed rules requiring listed issuers to adopt and comply with written “clawback” policies. These policies would need to provide that, if a listed issuer is required to prepare an accounting restatement due to the material noncompliance of the issuer with any financial reporting requirement under the securities laws, then the issuer will recover the amount of any incentive-based compensation erroneously awarded to an executive officer. The listed issuer would also be required to disclose its clawback policy, disclose information about actions taken pursuant to its policy, and file its policy as an exhibit to its annual report.
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Exclusive Forum Provisions

We have previously blogged about Delaware corporations considering, and Delaware courts upholding, “exclusive forum” provisions in their charter documents. These provisions require stockholder derivative and other intra-corporate lawsuits to be filed in the Delaware Court of Chancery.

Last week, following overwhelming support in the Delaware Legislature, the Delaware Governor signed into law an amendment to the Delaware General Corporation Law that expressly authorizes provisions in the corporation’s certificate of incorporation or bylaws establishing Delaware as the exclusive forum for “internal corporate claims.” Internal corporate claims
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From our colleagues Lucas V. Muñoz, Margaret Keane, Ben Gipson and Daniel Lac

Beginning July 1, 2015, employers in the State of California are required to provide employees with paid sick leave (PSL) under the California Healthy Workplace Healthy Family Act of 2014. In short, every employee who works at least 30 days in a year is entitled to accrue PSL at a rate of at least one hour of PSL per 30 hours worked, up to 24 hours per year.

Simple enough? Not really. As employers implement
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