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- A New Approach to Executory Contracts? Fifth Circuit Opens the Door for the Functional Approach In a decision holding that surety bonds are not executory contracts, the Fifth Circuit signaled that courts may in the future utilize the functional approach to determine if multiparty contracts are executory in nature. The case, filed in the United States Bankruptcy Court for the Middle District of Louisiana as In re Falcon V, L.L.C.,... Continue Reading...
- Important New U.S. Supreme Court Opinion Holding Prejudice No Longer Required To Show Waiver Of Arbitration Agreements In the recent unanimous United States Supreme Court opinion, Morgan v. Sundance, Inc., No. 21-328, 2022 WL 1611788 (2022), issued May 23, 2022, the Court abrogated existing case law and held that prejudice is not a condition of finding that a party, by litigating too long, waived its rights to stay litigation or compel arbitration... Continue Reading...
- Issuing Unconditional "McDill" Tender to Plaintiffs with Pre-Existing Injuries Under Louisiana law, uninsured/underinsured ("UM") insurers are under strict requirements to issue "good faith" unconditional tenders of the undisputed portion of the plaintiff's damages. These unconditional tenders are not contingent on the final disposition of the case, rather they must be paid up front and cannot be recovered in the event of a lower judgment... Continue Reading...
- U.S. Supreme Court Gives Good News to Secured Lenders, Tempered with Words of Caution The U.S. Supreme Court offered some good news to secured lenders last week, tempered with words of caution. In Chicago v. Fulton, the Court held that a secured creditor does not violate Section 362(a)(3) of the Bankruptcy Code by merely continuing to hold property of its debtor after that debtor files a bankruptcy petition. The... Continue Reading...
- The Effect of the Uniform Commercial Code on Certain Limited Liability Company Transfer Restrictions in Louisiana The substantial flexibility afforded by the limited liability company structure has made it an increasingly popular business entity choice. Indeed, most of the default provisions in the Louisiana Limited Liability Company Law, La. R.S. 12:1301, et seq. (the "La LLC Law") may be altered or superseded by the articles of organization or operating agreement of... Continue Reading...
- Statutory Employer: A Louisiana Law Primer Under Louisiana law, workers' compensation is the exclusive remedy that an employee may assert against his employer or fellow employees for work-related injury, unless he was the victim of an intentional act. That exclusive remedy also extends to statutory employers. Workers' compensation legislation was enacted to provide social insurance to compensate victims of industrial accidents,... Continue Reading...
- Successor Liability: Considerations When Structuring Your Acquisition In targeting a company for purchase, many buyers prefer to purchase the assets of a company, as opposed to the stock (or other equity) of the company because, as a general rule, the buyer of assets in an asset acquisition does not automatically assume the liabilities of the seller. Accordingly, an asset acquisition generally allows... Continue Reading...
- Sandys v. Pincus: Expansion of the Rales Test and Lowering of Threshold for Lack of Independence in the Demand Futility Context In Sandys v. Pincus, the Delaware Supreme Court reversed a "thoughtful forty-two page opinion" by Chancellor Bouchard that dismissed a derivative action based upon the stockholder's failure to make pre-suit demand.[1] The court's opinion can be found here. The underlying Court of Chancery opinion can be found here. Expansion of the Rales Test for Demand Futility The authority... Continue Reading...
- Navigating the Uncertain Horizon of Post-Closing Indemnification Claims Helping sellers navigate the uncertain horizon of post-closing indemnification claims is a crucial part of a deal lawyer's job on the sell-side of any M&A transaction. According to a relatively recent study by Shareholder Representative Services (the "2013 SRS Study"), approximately 67% of private M&A transactions have "material post-closing issues."[1] While post-closing liability exposure is industry and deal specific, the empirical data presented... Continue Reading...
- Delaware Court of Chancery Provides Additional Guidance on the Application of the Business Judgment Rule in the Context of a Controller Buyout In In re Books-A-Million, Inc. Stockholders Litigation, the Delaware Court of Chancery dismissed a suit by minority stockholders (the "Plaintiffs") alleging that several fiduciaries breached their duties in connection with a squeeze-out merger (the "Merger") through which the controlling stockholders of Books-A-Million, Inc. (the "Company") took the Company private.[1] The decision, authored by Vice Chancellor J. Travis Laster, provides additional guidance... Continue Reading...
