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Best Practices for Performing and Supervising M&A Due Diligence
The title of this article seems a bit presumptuous given that “best practices” are always subjective and somewhat in the eye of the beholder. Nevertheless, the author, with nearly two decades of buy-side M&A experience, will attempt to impart some nuggets of wisdom and many practical tips for managing the M&A due diligence process. Managing such a process can encompass many steps and can be compressed into a few weeks or stretch out over several months. The process may involve many people from different departments within the acquirer company as well as outsourced expert advisors making contact with many people from different departments within the target company as well as the target company’s outsourced expert advisors. As such, the due diligence process can generate thousands of individual communications and loads of new data. Organization is the key to successfully navigating such a process. Lawyers are uniquely positioned to oversee and manage the process. With our ability to see across multiple domains, focus on the salient issues and manage competing deadlines, lawyers bring an important skillset to the M&A team. This article will attempt to provide lawyers with a roadmap and practical ideas for managing the M&A due diligence efforts of an integrated team.
Trade Secrets
Broadly speaking, a trade secret is any information that provides a company a competitive edge and is not publicly known. But to be entitled to these protections, a company must undertake some effort to maintain the secrecy of its trade secrets. In other words, it must keep its trade secrets “secret.” Unlike a patent or a copyright, trade secret protection can last forever. But it is a very unforgiving form of protection. It can be easily lost by disclosing the secret publically. Therefore, from the moment a trade secret is created, the owner must guard the secrecy of that secret 24 hours a day, 365 days a year. So how does a company maintain the secrecy of its trade secrets without simply locking the secret up and throwing away the key? Here are some reasonable and relatively simple steps that a company can take to protect its trade secrets under the new Texas Uniform Trade Secrets Act (“TUTSA”), Tex. Civ. Prac. & Rem. Code §134A.002 et seq. (2013).
Covenants to Not to Compete and Injunctive Relief
Almost every case involving non-competes and trade secrets deals in some fashion with injunctive relief. In fact, these cases are typically won or lost at the temporary injunction stage. For example, from the employee’s perspective, a former employer seeking injunctive relief will inevitably claim that damages are impossible to calculate in an effort to buttress its claim of irreparable harm—a necessary component of obtaining injunctive relief. If the injunction is denied, however, the former employer is left with the herculean task of quantifying these otherwise “impossible to calculate” damages. Thus, if an employee can successfully rebuff efforts by his or her former employer to either enforce a non-compete covenant or obtain the substantive equivalent through a temporary injunction preventing him from working for a competitor, that employee has essentially gutted his former employer’s ability to get any relief at all. Similarly, if an employer can obtain injunctive relief, an ultimate ruling on the non-compete may be unnecessary given the amount of time it takes to get to trial. Understanding both the substantive and procedural requirements for obtaining a TRO/TI—as well as their practical application—is, therefore, critical in either obtaining or defeating an injunction.
Social Media and Attorney Advertising
Seemingly light years removed from the mid-tolate 1960’s when engineers’ standard dress code was synonymous with a white or translucent pocket protector and a belt-hanging sliderule, to the late 1970’s and early 1980’s when an esoteric commanddriven cumbersome, elusive Internet-precursor was used virtually exclusively by hardcore technophiles affectionately deemed to be “nerds” or “geeks,” to the availability to the public at-large to such pedestrian platforms as CompuServe and America Online (“AOL”) in the late 1980’s throughout the 1990’s, to the modern-day graphically-interfaced Internet led by Yahoo, Amazon and then Google, has developed into a profoundly useful, friendly and globally informative platform for facilitating electronic communications that boast the capability of traversing virtually unlimited time and geographic boundaries. In the 2000’s LinkedIn emerged as a networking medium focusing on business professionals who sought to establish multifaceted productive connections that promoted business and related interests. Contemporaneously, MySpace launched as a vehicle having broad social and cultural appeal to a diverse adult population. Then, with the advent of the mid2000’s, Facebook appeared and continually dominated the social media marketplace which grew exponentially. As social media also known as “social networking” became the order of the day ― each and every minute of each day ― the population of users grew even more and indeed continues to grow apace, augmented and enriched with such platforms as Twitter, Pinterest, Google+, Tumblr, Instagram, Flickr, YouTube, etc. What next?
How to Successfully Submit a Claim Under a Liability Insurance Policy
The successful submission of an insurance claim depends on a policyholder’s compliance with the conditions in the insurance policy. Insurance policy conditions typically require that the insured (1) provide notice of the claim or suit to the insurer, (2) forward copies of demands or legal papers received in connection with a claim or suit to the insurer, (3) cooperate with the insurer in the investigation, defense and settlement of the claim or suit against the insured, and (4) not make any payment, assume any obligation or incur any expense without the insurer’s consent.
Crowdfunding from Texas Crowds
The Texas Intrastate Crowdfunding Rules have flexibility that neither the comparable federal statute nor the proposed federal rulemaking have. The Texas rules allow all of the intermediaries operating crowdfunding portals to take compensation. That should encourage the formation of portals and registration with the Texas State Securities Board. In contrast, the definitions and operational limits on both federal Funding Portals and intermediaries in Rule 506(c) offerings exempted under ’34 Act Section 3(h) cannot take compensation. The Texas issuer’s offering exemption provides for a larger ceiling for the investment by each individual investor and has no ceiling on investments by Accredited Investors. In contrast, federal statutory provisions for crowdfunding offerings have ceilings, whether the investors are Accredited Investors or not and all investors must be Accredited Investors in Rule 506(c) offerings made on portals. The Texas rules will likely disqualify fewer issuers than the federal statutory provisions for crowdfunding or the regulatory requirements for Rule 506(c) offerings do. And, the simpler set of disqualifying events or conditions under Texas rules impose a lesser burden in ensuring compliance with the exemption than exists under the federal exemptions.
The Walking Dead: Inadvertent Terminations of Business Entities
Hacking Through a Cyber-Liability Claim and Related Insurance Issues
This paper and corresponding presentation identify the most common cyber risks, which types of policies are implicated by the risks, and how courts across the country are interpreting the relevant policy language in light of these developing legal issues.
The" Wolfie" Awards - Top Texas Business Law Cases of 2014
How does the Academy do it? Before the Grammy is awarded to the Song of the Year, five nominees must be chosen from an entire year of songs. This would be hard enough for just one genre. Narrowing it down to five songs from all the major styles must be difficult. In the same way, selecting the five most important business law cases of the last year for Texas lawyers is no easy task. There are state and federal cases to choose from, at different levels, addressing a wide range of issues.
Cradle to Grave - The Impact of Family on the Business Case Study
Cradle to Grave - The Impact of Family on the Business, Choosing a Business Entity in Today's Business World
Taxes, liability protection, and other considerations have caused the choice of business entity by a new business owner, or an existing owner, to be an issue requiring competent advice from the business owner’s lawyer and accountant. Only after understanding all of the goals and plans of the business owner, both short term and long term, can a business owner’s advisors recommend to him or her the proper entity for their business operations. This outline is intended to raise the issues for a business owner to consider – not to provide answers. Only after a thorough analysis and review can the answers be provided by the business owner’s advisors. Good luck on your selection.
Covenants to Not to Compete and Injunctive Relief
Almost every case involving non-competes and trade secrets deals in some fashion with injunctive relief. In fact, these cases are typically won or lost at the temporary injunction stage. For example, from the employee’s perspective, a former employer seeking injunctive relief will inevitably claim that damages are impossible to calculate in an effort to buttress its claim of irreparable harm—a necessary component of obtaining injunctive relief. If the injunction is denied, however, the former employer is left with the herculean task of quantifying these otherwise “impossible to calculate” damages. Thus, if an employee can successfully rebuff efforts by his or her former employer to either enforce a non-compete covenant or obtain the substantive equivalent through a temporary injunction preventing him from working for a competitor, that employee has essentially gutted his former employer’s ability to get any relief at all. Similarly, if an employer can obtain injunctive relief, an ultimate ruling on the non-compete may be unnecessary given the amount of time it takes to get to trial. Understanding both the substantive and procedural requirements for obtaining a TRO/TI—as well as their practical application—is, therefore, critical in either obtaining or defeating an injunction.
Employment Law Hot Topics
Cradle to Grave - The Impact of Family Law on the Business, What Every Business Attorney Needs To Know About Family Law
This paper will help you advise business owners about the impacts of divorce and family law upon businesses. This is important not only for the business owner who may be facing divorce, but for his business partners as well, who may find themselves and their interests affected by the divorce litigation. With an understanding of how Texas divorce law impacts businesses, business agreements can be drafted to shield the business and its other owners from the impact of one owner’s marriage and divorce.
Data Privacy Issues
Due to the increase in cyber attacks and misappropriation of data from companies of all sizes and across all industries, attorneys, both personally and professionally, face increasing responsibilities to understand and implement strong and robust data protection programs. Attorneys should be aware of the relevant and changing data protection standards, understand how to meet such standards and help clients to do the same, and prepare to react effectively when a data breach occurs.
Corporate Compliance in the 21st Century
Dating back to the Civil War and the passage of the False Claims Act (“FCA”), the federal government has relied―and continues to rely―on whistleblowers to aid in the government’s ability to enforce regulatory laws and protect various government programs. The federal government simply lacks the limitless legal and investigative resources needed to do it entirely on its own. To this end, Congress has passed numerous regulatory statutes containing specific incentives that reward and protect whistleblowers for coming forward, including bounty programs and private causes of action to combat employer retaliation. This paper focuses on giving insight to the in-house counsel about those whistleblower statutes and their key provisions.
7 Deadly Sins of Contract Drafting - Constructive Interpretation and Interpretative Construction
This paper will analyze and discuss 7 topics regarding contract drafting that can impact the effectiveness, predictability and enforceability of an agreement. There are many other topics that deserve comment, so this paper will seek to include references to other resources useful to a practitioner in drafting, interpreting and construing contracts in many different types of transactions.
Fiduciary Duties for Employees in TX - A Moving Concept
Cradle To Grave - The Impact of Family on the Business, Estate Planning Strategies
Cradle to Grave - The Impact of Family on the Business, Development of a Family Business Objectives Statement (AKA Family Business Mission Statement)
Best Practices for Performing and Supervising M&A Due Diligence
The title of this article seems a bit presumptuous given that “best practices” are always subjective and somewhat in the eye of the beholder. Nevertheless, the author, with nearly two decades of buy-side M&A experience, will attempt to impart some nuggets of wisdom and many practical tips for managing the M&A due diligence process. Managing such a process can encompass many steps and can be compressed into a few weeks or stretch out over several months. The process may involve many people from different departments within the acquirer company as well as outsourced expert advisors making contact with many people from different departments within the target company as well as the target company’s outsourced expert advisors. As such, the due diligence process can generate thousands of individual communications and loads of new data. Organization is the key to successfully navigating such a process. Lawyers are uniquely positioned to oversee and manage the process. With our ability to see across multiple domains, focus on the salient issues and manage competing deadlines, lawyers bring an important skillset to the M&A team. This article will attempt to provide lawyers with a roadmap and practical ideas for managing the M&A due diligence efforts of an integrated team.
Crowdfunding from Texas Crowds
The Texas Intrastate Crowdfunding Rules have flexibility that neither the comparable federal statute nor the proposed federal rulemaking have. The Texas rules allow all of the intermediaries operating crowdfunding portals to take compensation. That should encourage the formation of portals and registration with the Texas State Securities Board. In contrast, the definitions and operational limits on both federal Funding Portals and intermediaries in Rule 506(c) offerings exempted under ’34 Act Section 3(h) cannot take compensation. The Texas issuer’s offering exemption provides for a larger ceiling for the investment by each individual investor and has no ceiling on investments by Accredited Investors. In contrast, federal statutory provisions for crowdfunding offerings have ceilings, whether the investors are Accredited Investors or not and all investors must be Accredited Investors in Rule 506(c) offerings made on portals. The Texas rules will likely disqualify fewer issuers than the federal statutory provisions for crowdfunding or the regulatory requirements for Rule 506(c) offerings do. And, the simpler set of disqualifying events or conditions under Texas rules impose a lesser burden in ensuring compliance with the exemption than exists under the federal exemptions.