November 19, 2014

Conflict Minerals: Panel Rehearing Granted on 1st Amendment Issues!

As noted by Cooley’s Cydney Posner in this blog, the DC Circuit Court of Appeals has granted the petitions of the SEC and Amnesty International for a panel rehearing (and the motion of Amnesty to file a supplemental brief) in connection with NAM v. SEC. (The Court also ordered that the petitions filed for rehearing en banc be deferred pending disposition of the petitions for panel rehearing.)

The per curiam order of the Circuit Court directs the parties to file supplemental briefs addressing the following specific questions related to the First Amendment:

(1) What effect, if any, does this court’s ruling in American Meat Institute v. U.S. Department of Agriculture, 760 F.3d 18 (D.C. Cir. 2014) (en banc), have on the First Amendment issue in this case regarding the conflict mineral disclosure requirement?

(2) What is the meaning of “purely factual and uncontroversial information” as used in Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626 (1985), and American Meat Institute v. U.S. Department of Agriculture, 760 F.3d 18 (D.C. Cir. 2014) (en banc)?

(3) Is determination of what is “uncontroversial information” a question of fact?

Twist to Fee-Shifting Bylaws: Limit Suing Ability of Small Shareholders

As highlighted in this RacetotheBottom blog and Reuters article – and analyzed in this Cooley blog – Imperial Holdings, a Florida corporation, is trying out a permutation on fee-shifting bylaws: requiring plaintiffs to obtain consents to the litigation from shareholders holding shares in excess of a minimum threshold (3% of the outstanding). The problem the bylaw seeks to address is that shareholder litigation is frequently launched by counsel representing shareholders with only nominal stakes. Here’s the “consent by other shareholders” bylaw.

Meanwhile, in the fee-shifting bylaw lawsuit in Delaware, the defendants have opposed a limit on discovery…

SEC & FASB Issue Guidance on Pushdown Accounting

Yesterday, the SEC’s Office of the Chief Accountant & Corp Fin jointly released Staff Accounting Bulletin #15 to rescind portions of the interpretive guidance included in its SAB Series for what’s known as pushdown accounting. To reflect private sector developments in GAAP, the SAB #115 rescinds SAB Topic 5.J. entitled New Basis of Accounting Required in Certain Circumstances. The new bulletin brings existing guidance into conformity with FASB Update No. 2014-17 – Business Combinations (Topic 805): Pushdown Accounting, a consensus of the FASB Emerging Issues Task Force, which was ratified by the FASB last month and issued yesterday too…

– Broc Romanek