A LETTER FROM THE PRESIDENT.
Spring. Wisps of Spanish lavender, wind chimes, and thrusting open our windows for a breath of fresh air. So too is the season to witness the blooms and blossoms of our planted seeds and pruned foundations. It is a reminder to look up – and around – and see what is right before us: our Members.
During the pruning season, we have been busy working towards our defined 2019 Strategic Objectives, as we discussed in our Fall Newsletter - in particular, finding better ways to serve and invest in you – as the heart of our organization.
“‘We must hurry!’ said Mr. Wonka. ‘We have so much time and so little to do! No! Wait! Strike that! Reverse it!'”
-Roald Dahl, Charlie and the Chocolate Factory
Growing begins by first turning inward, so we turned our attention to the internal governance of our New York City chapter. More specifically, we have been working on developing and revitalizing internal practices, operating policies and functional tools, like a newly developed Board Portal designed to bring information to the fingertips of our Directors. Our aim is to deliver to you the information you want directly and in a more consumable fashion. We also have a renewed focus on our Sponsor relationships, carefully partnering Directors with each Sponsor to bring curated, substantive content. We launched new Spotlight groups and events designed to suit your needs on your schedule. Lastly, we’ve welcomed several fresh faces to the Board to fill interim vacancies and gaps and continue to grow with our new Chapter Management (and our Executive Director, Amy Adams).
You’ve no doubt noticed the wholesale changes to the overall ACC website initiated by Headquarters; thus, we too will be making changes so our local information and resources are easier to navigate. These improvements include a streamlined and consistent marketing approach, direct outreach to members, greater transparency into the organization membership, advanced calendaring options and friendly newsletter content. We’ve created a powerful team targeted at achieving these goals and demonstrating our value as a resource for education and community.
President, ACC New York City Chapter
If you aren't already an ACC member, you are missing out on valuable resources and access to networking opportunities. Membership connects you globally and locally. ACC provides an opportunity to connect with peers in your industry and region. Broaden your knowledge and expertise through collaboration with local in-house counsel.
If you have never been a member of ACC, now is a perfect time to join! Between March 26 - April 5, 2019, ACC is offering a discount code for $50 off membership. (Please note this is for new members only and is active between March 26 - April 5). Use discount code: GMM19-NYC to take advantage of this offer when you sign up online!
IRS Cracking Down on Taxpayer Travel Plans
By: Geoffrey M. Davis and David Bitkower, Jenner & Block
In an effort to put new pressure on taxpayers with tax delinquencies, the Internal Revenue Service (IRS) is leveraging its ability to block international travel—even in the absence of any flight risk. Delinquent taxpayers—but not their lawyers—may receive a Notice CP508C from the IRS if they’ve been certified to the US Department of State and had their passports revoked. Fortunately, there are avenues for dealing with this pressure beyond just relying on the IRS itself, as we describe below. But all of the avenues are time consuming and will take work—even if you pay your taxes in full. Be advised: cutting a check on the way to the international terminal is not likely to suffice.
On February 27, 2019, the IRS issued an information notice reiterating a prior warning that taxpayers with “seriously delinquent tax debts” (a relatively low $52,000 or more) will be reported to the State Department and may have their passports revoked and applications for new and renewed passports denied or significantly delayed. [READ MORE]
THE POWER OF TECHNOLOGY AND ITS ROLE IN THE ALTERNATIVE DISPUTE RESOLUTION ARENA
As a former Justice of the Supreme Court, I have seen first-hand how technology has impacted legal proceedings within the courtroom. From technology-based evidence presentations and electronic submissions, to “day in the life” videos by plaintiffs demonstrating the daily challenges their clients face to video conferenced expert witness testimonies – technology permeates nearly every facet of today’s modern legal proceeding.
Subsequently, as parties increasingly seek to settle their cases outside of the courtroom using alternative methods, such as arbitration or mediation, the role that technology plays provides endless opportunities to assist in the dispute resolution process. In my current role as a neutral for NAM (National Arbitration and Mediation), I have seen how the use of technology during these proceedings is key to a successful mediation or arbitration. [READ MORE]
M&A Update: Akorn Falls Far from the Tree: Delaware Chancery Court Finds a “Material Adverse Effect” for the First Time in Akorn, Inc. v. Fresenius Kabi AG, et al.
By: Joshua Apfelroth, Jason Halper, William Mills and Marianna Wonder, Cadwalader, Wickersham & Taft LLP
On October 1, 2018, the Delaware Court of Chancery found in Akorn, Inc. v. Fresenius Kabi AG, et al. that Fresenius was entitled to terminate its merger agreement with Akorn. In so ruling, Vice Chancellor Travis Laster found that: Akorn suffered a “Material Adverse Effect” (“MAE”) following the execution of the merger agreement; Akorn breached its representations related to regulatory compliance in a manner that would reasonably be expected to have an MAE; and Akorn did not comply in all material respects with its covenant to use commercially reasonable efforts to operate in the ordinary course of business following execution of the merger agreement. The decision is the first time a Delaware court has held that a seller has suffered an MAE, entitling the buyer to terminate an acquisition transaction. The decision offers insight into the interpretation of the term “Material Adverse Effect,” as well as other provisions commonly used in M&A agreements.
Fresenius and Akorn entered into a merger agreement in 2017, shortly after Akorn announced strong results for the first quarter of 2017. During the second quarter of 2017, however, “Akorn’s business performance fell off a cliff.” The Company’s second quarter results were well below its projected guidance, as well as the prior-year performance. Akorn’s performance did not recover by the end of 2017. Akorn attributed its failure to meet guidance and its sharp decline in performance to the loss of a key contract and unexpected competition. In October and November 2017, Fresenius received anonymous whistleblower letters that made “disturbing allegations about Akorn’s product development process failing to comply with regulatory requirements.” As a result of these communications, Fresenius and its advisors, relying on the reasonable access covenant contained in the merger agreement, conducted an investigation into these allegations. Akorn elected not to conduct an investigation, instead relying on its deal counsel to “shadow” Fresenius’ investigation. The Fresenius investigation “uncovered serious and pervasive data integrity problems that rendered Akorn’s representations about its regulatory compliance sufficiently inaccurate.” [READ MORE]
Open Season: Multi-Agency Report Makes Recommendations to Free the Health Care Sector from Overregulation and Enhance Competition
By: Christopher Flynn and Kevin Kroeker, Crowell & Moring
Last month, the U.S. Departments of Health and Human Services, Treasury, and Labor issued a report titled “Reforming America’s Healthcare System Through Choice and Competition,” to better describe what the federal government envisions for health care reform in 2019 and beyond. With input from the Federal Trade Commission (FTC), the report provides the President and the incoming 116th Congress with the federal agencies’ insights into the health care industry and its shortcomings, and their recommendations on how federal and state laws, regulations, and policies should be changed or eliminated to foster competition, promote innovation, and ultimately lower health care costs in the United States.
This alert provides a brief overview of the themes underlying the report’s recommendations – promoting competition, deregulation, and consumer engagement within the health care industry – and the possible implications for the future of antitrust enforcement, health insurance, the oversight of professionals and entities treating patients, and other areas. [READ MORE]
Women’s Group with Clifford Chance: Know Your Value: Fireside Chat with Mika Brzezinski
The ACC-NYC Chapter was pleased to welcome Mika Brzezinski, co-host of MSNBC's Morning Joe and best-selling author of Know Your Value, to the first Women's Group event of 2019, fittingly held on March 7th on the eve of International Women's Day. Women’s Group Sponsor, Clifford Chance, warmly greeted the nearly-100 ACC-NYC guests with a copy of Ms. Brzezinski’s book, and Clifford Chance partner, Jennifer DeMarco, moderated an engaging and motivational fireside chat with the inspirational journalist and author.
Ms. Brzeninski, clear in her message, encouraged the female attorneys in the room to know their value and unapologetically advocate for themselves. She provided practical tools such as “press reset” to promote effective and positive communication in the workplace. From the raw and authentic narrative of her own professional journey to tips on body language and tone, Ms. Brzeninski captivated the audience with humor, honesty and wisdom. [READ MORE]
Strategies for leveraging diversity and inclusion to develop meaningful law firm relationships
Without question, client demand has sparked an increased focus on diversity and inclusion (D&I) at law firms. That focus is beginning to have a positive impact on the law firm talent pool. According to the 2018 Vault/MCCA Law Firm Diversity Survey, diverse attorneys now account for 17% of lawyers at firms, nearly a percentage point higher than 2017, and lawyers of color now make up 25% of law firm associates and 13% of counsel. In addition, minority lawyer representation at the firm management and executive committee levels has shown steady increases in the last two years, increasing to 9% in 2017.
However, the Vault/MCCA Survey also indicates that much work remains to be done if law firms intend to retain diverse talent for the long-term. Minority lawyers still represent a disproportionate segment of lawyers who leave law firms, and the 2017 diverse attorney attrition rate was the highest in the past 11 years. While minority women represented 13% of associate departures in 2010, that number rose to more than 15% in 2017. Although Asian Americans represent the single largest racial minority group at law firms, they are the least likely to be partners at their firms. Hiring for African-American lawyers still remains below pre-recession levels, and, in 2017, Hispanic/Latinx attorneys represented only 3.5% of the lawyers promoted to partner, lower than in the previous two years. [READ MORE]
The SEC and Digital Assets—A Busy Year End
The end of the year has been a very busy time for the SEC in the digital asset space. From speeches to the issuance of joint statements to enforcement actions, there are many things to highlight, discuss and consider. This update summarizes the recent flurry of activity and emphasizes some key takeaways.
On November 16, 2018, the Division of Enforcement of the U.S. Securities and Exchange Commission (SEC) announced the settlement of administrative actions against two companies, Paragon Coin, Inc. (Paragon) and CarrierEQ, Inc. (AirFox), that sold digital securities in tokenized form in initial coin offerings (ICOs). Although neither company admitted or denied the findings, the SEC found that their ICOs violated the registration requirements of Section 5 of the Securities Exchange Act of 1933 (Securities Act). [READ MORE]
BRAND PROTECTION IN A POST-GDPR WORLD
April 30, 2019