Credit default swaps became notorious financial instruments and symbols of financial engineering run amok during the 2007-8 financial crisis. Once worth over $60 trillion a year, the credit default swap market has shrunk significantly, but it is still worth nearly $10 trillion a year.1 A credit default swap is a financial derivative contract that pays…
Year: 2019
The Delaware Chancery’s Unique MAE Ruling
In the recent decision of Akorn Inc. v. Fresenius Kabi AG, et. al., C.A. No. 2018–0300–JTL (Del. Ch. Oct 1, 2018), Delaware’s Chancery Court held, for the first time, that, because a corporation violated a “material adverse effect” clause of a merger contract, the purchasing company could forgo its obligation to buy the target company.1 …
Will There Be An Antidote to High Drug Prices in the U.S?
High drug prices in the United States are a sorely contested topic between consumers, lawmakers, and officials at pharmaceutical companies. The political pressure to lower drug prices is high and drug prices remain pharma’s biggest business and reputational risk.1 On Tuesday, February 26, 2019, officials from seven of the largest drug makers in the United…
Modern Monetary Theory: A Primer
As U.S. political debates continue to intensify around government benefits and tax policy, some politicians and pundits see modern monetary theory (“MMT”) as support for a system of low tax rates and generous government benefits programs.1 To help you get through the presidential election cycle and impress your economist friends, here is a quick primer…
Carried Interest Post-TCJA: Impact on Hedge Funds, Private Equity, and Real Estate
Academics, tax practitioners, and members of both political parties in the US have criticized the so-called carried-interest loophole for many years.1 Although a recent proposal to close the loophole estimated the US Treasury would only collect an additional $17 billion in revenue over ten years,2 the loophole continues to receive criticism due to its political…
Getting to a Financial Stress Test Equilibrium
On May 24, 2018, President Trump signed the Economic Growth, Regulatory Relief, and Consumer Protection Act (“EGRRCPA”).1 This law loosened several regulatory requirements instituted by the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) after the 2008 Financial Crisis.2 The EGRRCPA removed, inter alia, a Dodd-Frank requirement that prudential bank regulators and bank holding…
Rideshare, Regulation, and Rights: How Los Angeles’ initiative to monitor “dockless mobility” companies is complicated by individual privacy rights
Cities all over the country have seen their streets transformed overnight – sometimes literally – by the addition of personal electronic scooters.1 Taking the baton from Uber (who is trying to take it back), companies such as Bird, Lime and Spin have provided the public with another means of shared transportation. Unlike rideshare, dockless mobility…
The Impact of Murphy v. NCAA
For over two decades, the Professional and Amateur Sports Protection Act (PAPSA) stood as the federal roadblock preventing states from legalizing sports gambling. In May of this past summer, the Supreme Court removed this barrier by a vote of six to three in Murphy v. NCAA.1 Justice Alito wrote the opinion for the Court and…
Bird Law: The Emergence of Electric Scooter Companies and Their Potential Legal Repercussions
They appear, as if by magic, overnight and in swarms. With little to no warning, they descend upon urban populations, leaving city officials scrambling to find solutions. Although it may sound like something out of an Alfred Hitchcock horror flick, the scene described actually applies to the latest transportation business craze: electric scooters (e-scooters). As…
Who wants to go public, anyway?
For decades, the conventional wisdom on the public offering’s place in a firm’s lifecycle has been a rather linear story. As a company matures and its capital expenditure needs increase over time, it can afford – and thus take advantage of – raising funds in public capital markets. The first time a company sells equity…