Practice Areas & Industries: Sullivan & Cromwell LLP

 




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Practice/Industry Group Overview

Sullivan & Cromwell’s Healthcare and Life Sciences Group has negotiated complex transactions and resolved high-stakes disputes for almost three decades. Today, it possesses an unrivaled grasp of these sectors and a practical understanding of the commercial realities underlying them. 

The Group’s multidisciplinary, global scope provides the expertise, experience and capacity to deliver best-in-class services to clients of all sizes, from start-ups to investment funds to the largest global healthcare businesses.

The Firm represents international clients in the following sectors:

  • pharmaceuticals and life sciences,
  • med-tech,
  • health insurers, and
  • healthcare services.

Mergers & Acquisitions
Lawyers in the Group have executed many of the industry’s most critical and challenging U.S. and non-U.S. transactions, including a number of important deals that helped consolidate this broad sector. S&C lawyers led eight of the 10 largest healthcare and life sciences M&A transactions ever.

Capital Markets and Taxation
Access to sophisticated capital markets know-how and cutting-edge tax expertise is essential for the success of S&C’s clientele. The Firm has a long-standing record of success in debt, equity and hybrid offerings for U.S. and non-U.S. clients. The Firm’s tax lawyers are familiar with, and have refined, many of the most current and innovative tax structures, such as inversion transactions and complex tax-driven financings.

Disputes and Investigations
For several decades, S&C has helped clients navigate highly complex government investigations at both the state and federal level. The Firm has also represented clients in some of the most significant securities class actions and shareholder derivative litigations in history.

SELECTED REPRESENTATIONS

Recent Sullivan & Cromwell healthcare and life sciences experience includes representations of:

  • Alcon (Switzerland) and its independent directors, in its $50.4 billion multistage acquisition by Novartis (Switzerland)—first in Novartis’s purchase of Nestlé’s 77 percent interest in Alcon (2008) and then its subsequent acquisition of the remaining publicly held minority interest in the company. (2010)
     
  • Amgen, in its $10.5 billion acquisition of Onyx Pharmaceuticals (U.S.). (2013)
     
  • Bayer (Germany), in its pending acquisition of Algeta (Norway) for approximately $2.9 billion. (2013)
     
  • Chiron (U.S.), a biotechnology company, in the $6.6 billion acquisition of 58 percent of Chiron shares not already owned by Novartis (Switzerland). (2006)
     
  • CVS Caremark (U.S.), in its pending $2.1 billion acquisition of Coram (U.S.) from Apria Healthcare Group. (2013)
     
  • Eisai (Japan), in its $3.9 billion acquisition of MGI Pharma (U.S.), a biopharmaceutical company specializing in oncology. (2007)
     
  • Eastman Kodak (U.S.), in the $2.55 billion sale of its health segment business to Onex Healthcare Holdings (U.S.). (2007)
     
  • IMS Health (U.S.), in its $5 billion acquisition by investment funds managed by TPG Capital, the Canada Pension Plan Investment Board and Leonard Green & Partners. (2009)
     
  • Medco Health Solutions (U.S.), in its $29.1 billion merger with Express Scripts (U.S.). (2012)
     
  • Medtronic (U.S.), in its $3.7 billion acquisition of MiniMed (U.S.) and Medical Research Group (U.S.), which both develop technologies and equipment related to the treatment of diabetes. (2001)
     
  • Perrigo (U.S.), in its approximately $8.6 billion acquisition of Elan Pharmaceuticals (Ireland). (2013)
     
  • Pharmacia (U.S.), in its acquisition of Monsanto (U.S.) in 2000, its spin-off of Monsanto in 2001 and its $60 billion acquisition by Pfizer (U.S.). (2003)
     
  • Pharmasset (U.S.), in its $11 billion acquisition by Gilead Sciences (U.S.). (2012)
     
  • Philips Healthcare (U.S./Netherlands) and its parent companies, in the $5.1 billion acquisition of Respironics (U.S.). (2007)
     
  • Stryker (U.S.), a surgical and medical products developer, in its $764 million acquisition of Trauson Holdings (China). (2013)
     
  • Valeant Pharmaceuticals (Canada), in its $2.6 billion acquisition of Medicis (U.S.). (2012)
     
  • Valeant Pharmaceuticals (Canada),  in its aborted $5.7 billion unsolicited bid for Cephalon (U.S.). (2011)

 
 
Articles Authored by Lawyers at this office:

IRS Issues Proposed Regulations on the Definition of Real Property for Purposes of the Real Estate Investment Trust Provisions of the Code
, May 15, 2014
On May 9, 2014, the Internal Revenue Service (“IRS”) issued proposed regulations (the “Proposed Regulations”) that provide guidance on what assets may qualify as real estate assets for purposes of determining whether a corporation qualifies as a real estate investment trust,...

Tax Court Addresses Implied Waiver of the Attorney - Client Privilege
, May 15, 2014
On April 16, 2014, in AD Investment 2000 Fund LLC v. Commissioner, 142 T.C. No. 13, the Tax Court held that, by putting into issue their own legal knowledge, understanding, and beli efs with respect to a particular tax position in order to establish their defenses to accuracy - related penalties,...

Deductibility of Fiduciary Expenses: IRS Publishes Final Regulations on Deductibility of Fiduciary Expenses Incurred by Estates and Trusts
, May 14, 2014
On May 8, 2014, the Treasury Department and the Internal Revenue Service (“IRS”) adopted final regulations (the “Final Regulations”) governing the treatment of expenses incurred by estates and non-grantor trusts, including ownership costs, tax preparation fees, investment...

FATCA: Transitional Relief: Soft Opening for FATCA:  2014 and 2015 Deemed a “Transition Period” and Other Limited Transitional Relief Under FATCA Announced
, May 12, 2014
On May 2, 2014, the IRS and the Treasury Department issued Notice 2014-33 announcing that calendar years 2014 and 2015 will be regarded as a transition period for purposes of IRS enforcement and administration of FATCA. Notice 2014-33 also provides additional transitional relief under FATCA and the...

Second Circuit Rejects “Listing” and “Foreign-Squared” Claims Under Morrison v. National Australia Bank
, May 09, 2014
In Morrison v. National Australia Bank, the U.S. Supreme Court opined that U.S. securities laws apply only “in connection with the purchase or sale of a security listed on an American stock exchange, and the purchase or sale of any other security in the United States.” Seizing on that...

Banking Applications: Federal Reserve Provides New Insight Regarding Consideration of Banking Applications and Notices; Announces New Semi-Annual Publication of Banking Application Data
, May 08, 2014
Supervisory Letter No. SR 14-2/CA 14-1 (the “Letter”), issued by the Board of Governors of the Federal Reserve System (the “Federal Reserve”), discusses various issues that may prevent the Federal Reserve from acting favorably on applications and notices submitted by banking...

Basel Large Exposures Framework: Basel Committee Publishes Standards for the Supervisory Framework for Measuring and Controlling Large Exposures
, May 08, 2014
The Basel Committee on Banking Supervision (the “Basel Committee”) recently published final standards for the supervisory framework for measuring and controlling large exposures (“LE Framework”) of internationally active banking organizations. The LE Framework, like...

SEC Staff Reaffirms June 2 Deadline for Conflict Minerals Disclosure but Revises Disclosure Requirements in Light of D.C. Circuit Court Ruling: New Staff Guidance Provides that Issuers Will Not Be Required to Identify Products as “DRC Conflict Free,” “DRC Conflict Undeterminable” or “Having Not Been Found to Be ‘DRC Conflict Free’”
, May 08, 2014
In its first published guidance since a decision by the U. S. Court of Appeals for the District of Columbia Circuit that held that certain aspects of the SEC’s conflict minerals disclosure rule violated the First Amendment, the Director of the SEC’s Division of Corporation Finance...

Supreme Court Addresses Fee Shifting in Patent Infringement Cases: In Pair of Rulings, the Supreme Court Relaxes the Federal Circuit Standard for When District Courts May Award Fees in Patent Infringement Cases and Limits Appellate Review of Those Awards
, May 08, 2014
On April 29, the Supreme Court issued two unanimous opinions that: (1) give federal district courts broad authority to award attorneys’ fees in patent infringement cases and (2) limit appellate review of those awards. Section 285 of the Patent Act provides that attorneys’ fees may be...

The ATU Restructuring and the Judgement of the English Courts: Novel Techniques for Restructuring European High Yield
, May 08, 2014
The restructuring of the ATU group as a European high yield issuer (pursuant to which the ownership of the group was transferred to its senior noteholders) provides a useful insight into how the next generation of European high yield issuers could potentially be restructured using English...

Ukraine-Related Sanctions
, May 08, 2014
In response to the escalating situation in Ukraine, including Russia’s failure to meet commitments that were made on April 17, 2014 at a meeting in Geneva with United States and European Union representatives, additional economic sanctions measures have been adopted by the United States and...

Corporate Inversion Transactions: IRS Announces Intent to Issue Regulations Under Section 367 Directed at Certain Transactions
, May 02, 2014
On April 25, 2014, the IRS issued Notice 2014-32 (the “Notice”), stating that the IRS and Treasury Department will issue regulations (the “Regulations”), to be effective immediately, targeting certain transactions that the IRS believes to be contrary to the policy underlying...

Chen v. Howard-Anderson: Delaware Court of Chancery Limits Scope of Lyondell Chem. Co. v. Ryan for Bad Faith Claims
, April 29, 2014
In a summary judgment opinion issued on April 8, the Delaware Court of Chancery (VC Laster) held that in a change of control case governed by enhanced scrutiny, directors and officers could incur personal liability for a breach of their duty of loyalty if it is established that they acted...

Tweets Allowed in Proxy Contests and Securities Offerings: New SEC Guidance Allows Use of Hyperlinks to Satisfy Legend Requirements in Social Media Communications with Character Limits and Limits Issuers’ Responsibility for Social Media Communications Re-Transmitted by Third Parties
, April 29, 2014
The staff of the Securities and Exchange Commission has published a number of new Compliance and Disclosure Interpretations facilitating the use of social media in proxy contests, business combination transactions, tender offers and securities offerings. The interpretations allow the use of active...

Bank Capital: Supplementary Leverage Ratio; Federal Banking Agencies Propose Revisions to the Supplementary Leverage Ratio’s Exposure Measure and Approve Final Rules Implementing an Enhanced Supplementary Leverage Ratio for the Largest U.S. Banking Organizations
, April 23, 2014
Last week, the Federal Deposit Insurance Corporation (the “ FDIC ”), the Board of Governors of the Federal Reserve System (the “ FRB ”) and the Office of the Comptroller of the Currency (the “ OCC ” and, together with the FDIC and F RB, the “ Agencies...

Conflict Minerals Disclosure Due Date Approaching; While SEC Staff Issues New Guidance, Court’s Decision Creates Some Uncertainty: D.C. Circuit Holds That Portion of Conflict Minerals Disclosure Rule Violates the First Amendment; Absent Further Developments, Issuers Should Continue to Prepare to File Disclosures by Monday, June 2
, April 23, 2014
The deadline-May 31, 2014, extended to June 2 because May 31 falls on a Saturday-for conflict minerals disclosures responsive to the SEC’s rule under Section 13(p) of the Securities Exchange Act, is quickly approaching.

Estate, Gift and Trust Provisions in New York State 2014-15 Budget: New York State 2014-15 Budget Makes Changes to the Taxation of Estates and Gifts and the Income Taxation of Certain Trusts
, April 15, 2014
On March 31, 2014, Governor Andrew Cuomo signed into law the New York State 2014-15 Budget (the “Budget”). This memorandum describes the changes made by the Budget to the taxation of estates and gifts and the income taxation of certain trusts. We will be distributing a separate...

International Tax Cooperation: UK Sets Out Its Priorities for the OECD Base Erosion and Profit Shifting (BEPS) Project
, April 15, 2014
The UK government has published a paper setting out in detail its position on the OECD’s Action Plan on Base Erosion and Profit Shifting.

New Guidance on Same-Sex Marriage Under Tax-Qualified Retirement Plans: IRS Notice 2014-19 Requires Prospective Application of the Windsor Decision as of June 26, 2013 and Compliance with “State of Celebration” Approach to Recognizing Marriages as of September 16, 2013
, April 15, 2014
On April 4, 2014, the Treasury Department and the IRS issued Notice 2014-19 (the “Notice), which provides long-awaited guidance on the effect of the Supreme Court’s decision in United States v. Windsor on tax-qualified retirement plans. In Windsor, 133 S. Ct. 2675 (2013), the Supreme...

New York’s Highest Court Strengthens Forum Non Conveniens Doctrine in Cases Having Peripheral Connection to New York Banking System: Mashreqbank PSC v. Ahmed Hamad Al Gosaibi & Brothers Company
, April 15, 2014
In an opinion issued on April 8, 2014, the New York Court of Appeals unanimously dismissed on forum non conveniens grounds a case arising from a foreign exchange transaction between a bank in the United Arab Emirates and a general partnership in Saudi Arabia, where the only nexus between the...

UK Employment Arrangements: UK Revises Proposed Tax Measures Against Dual Contracts
, April 15, 2014
The UK government has published this year’s Finance Bill, which contains revised draft legislation to “end the abuse of dual contracts”. Dual contracts have in particular been used by employees resident, but not domiciled, in the United Kingdom to benefit from the UK’s...

Volcker Rule: Federal Reserve Issues Statement of Intent to Extend the Volcker Rule Conformance Period Through July 21, 2017 for CLOs
, April 15, 2014
Late yesterday afternoon, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) released a statement regarding the treatment of collateralized loan obligations (“CLOs”) under Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act...

EU Competition Law: European Commission Adopts New Technology Transfer Block Exemption Regulation and Guidelines
, April 04, 2014
The principal rules of EU competition law relating to technology licensing are set out in the European Commission’s Technology Transfer Block Exemption Regulation (“TTBER”) and Guidelines on Technology Transfer Agreements (“Guidelines”) (collectively, the “TTBER...

Tax Court Addresses Material Participation by Trusts: Tax Court Holds That Services Performed by Trustees Who Are Also Employees May Be Taken into Account in Determining Material Participation for Passive Loss Purposes; Holding Also Relevant for 3.8% Net Investment Income Tax
, April 04, 2014
On March 27, 2014, in Frank Aragona Trust et al. v. Comm’r, the Tax Court ruled that, in determining whether a trust’s activities are “passive” for purposes of the passive activity loss rules, (i) a trust can qualify for the material participation exception relating to...

Chairman Camp’s Discussion Draft of Tax Reform Act of 2014 and President Obama’s Fiscal Year 2015 Revenue Proposals
Theodore D. Holt,Donald L. Korb,Andrew S. Mason,Andrew P. Solomon,S. Eric Wang, April 03, 2014
On February 26, 2014, Ways and Means Committee Chairman Dave Camp released a discussion draft of tax reform legislation entitled the “Tax Reform Act of 2014” (the “Discussion Draft”). Although the Discussion Draft is unlikely to be enacted in its current form, some or all of...

IRS Issues Third Directive Regarding the Issuance and Enforcement of Information Document Requests
, April 03, 2014
The Commissioner of the Internal Revenue Service (“IRS”) Large Business and International Division (“LBI”) issued a directive on February 28, 2014 (the “February Directive”), to revenue agen ts responsible for audits conducted by LBI. LBI oversees audits of...

Supreme Court Decision Resolves a Circuit Split Regarding Whether Payments of Certain Severance Payments Constitute “Wages” for Purposes of FICA
Alexander P. Apostolopoulos,Matthew M. Friestedt,Andrew S. Mason, April 03, 2014
Today, the Supreme Court resolved a split between the Circuit Courts of Appeals related to the treatment of certain severance payments for purposes of the Federal Insurance Contributions Act (“FICA”), holding that such payments constitute “wages” for such purposes.

Bank Capital Plans and Stress Tests: 2014 Stress Test Results Demonstrate the Strong Capital Position of U.S. Banking System
, March 24, 2014
Yesterday, the Federal Reserve announced the summary results of the Dodd-Frank Act 2014 supervisory stress tests for the 30 largest U.S. banking organizations. The results demonstrate the sharply enhanced capital strength and resiliency of the U.S. banking system. Under an “extreme stress...

FATCA—Updates and Coordinating Regulations: Treasury Releases Last Substantial Regulations Package Necessary to Implement FATCA
, March 24, 2014
On February 20, 2014, the IRS and the Treasury Department issued the last substantial package of regulations necessary to implement FATCA. The package consists of two Treasury Decisions: T.D. 9658, which modifies the nonresident alien withholding rules and the domestic backup withholding and...

Kahn v. M&F Worldwide Corp.: Delaware Supreme Court Affirms In Re MFW Court of Chancery Ruling that Business Judgment Review Can Apply to Squeeze-Out Mergers Conditioned Up Front on Both Approval by Special Committee and Majority-of-the-Minority Vote
, March 20, 2014
In an opinion issued last Friday, a unanimous Delaware Supreme Court sitting en banc affirmed then Chancellor (now Delaware Supreme Court Chief Justice) Strine’s decision in In re MFW Shareholders Litigation, holding that the business judgment rule standard of review applies to squeeze-out...

Chairman Camp’s Discussion Draft of Tax Reform Act of 2014 and President Obama’s Fiscal Year 2015 Revenue Proposals: Proposals Relating to Individuals, Retirement Plans, and Estate and Gift Taxation
, March 20, 2014
On February 26, 2014, Ways and Means Committee Chairman Dave Camp released a discussion draft of tax reform legislation entitled the “Tax Reform Act of 2014” (the “Discussion Draft”). Although the Discussion Draft is unlikely to be enacted in its current form, some or all of...

Ukraine-Related Economic Sanctions: U.S. and EU Adopt Economic Sanctions in Response to the Current Situation in Ukraine; Additional Measures Likely if Current Situation Persists or Escalates
, March 20, 2014
In response to the current situation in Ukraine, President Obama recently issued two Executive Orders authorizing so-called “targeted sanctions” against certain officials of the Government of the Russian Federation and certain other designated persons and entities determined, among...

In re Orchard Enterprises, Inc. Stockholder Litigation: Delaware Court of Chancery Provides Guidance on Squeeze-Out Mergers and Entire Fairness Review at Summary Judgment
, March 18, 2014
In a recent opinion analyzing breach of fiduciary duty claims in a summary judgment context brought more than two years after the consummation of a squeeze-out merger against the target company’s directors who approved the merger, the target and its controlling stockholder, the Delaware Court...

Arbitration: BG Group Decision: U.S. Supreme Court Holds that Failure to Fulfill Preconditions to Arbitration Are Generally for Arbitrators, Not Courts, to Decide and Court Review is Deferential
, March 11, 2014
Arbitration clauses commonly include preconditions to commencing arbitration, such as time periods during which the parties are to attempt to resolve the dispute through negotiation or mediation. The U.S. Supreme Court on March 5 decided 7-2 that the arbitrators in investment treaty arbitrations,...

Regulations Clarify When a Section 83 Substantial Risk of Forfeiture Exists: Only Established Through Service Condition or Performance Condition; Application of Section 16(b) Short-Swing Liability Rule Clarified
, March 11, 2014
On February 25, 2014, the Treasury Department and the IRS issued final regulations clarifying circumstances in which a substantial risk of forfeiture exists under Section 83 of the Internal Revenue Code. Section 83 generally provides that, when property is transferred in connection with the...

IRS Issues Third Directive Regarding the Issuance and Enforcement of Information Document Requests
, March 10, 2014
The Commissioner of the Internal Revenue Service (“IRS”) Large Business and International Division (“LBI”) issued a directive on February 28, 2014 (the “February Directive”), to revenue agents responsible for audits conducted by LBI. LBI oversees audits of...

Sarbanes-Oxley Whistleblower Provision: U.S. Supreme Court Significantly Expands Sarbanes-Oxley Whistleblower Provision to Include Employees of Non-Public Contractors and Subcontractors of Public Companies
, March 10, 2014
In Lawson v. FMR LLC, No. 12-3 (Mar. 4, 2014), the U.S. Supreme Court clarified the scope of whistleblower protection provided by the Sarbanes-Oxley Act of 2002 (“SOX”), holding that employees of private contractors and subcontractors of public companies are protected by the...

Spin-Off and Listing by Introduction of Feishang Anthracite Resources Limited
, March 10, 2014
China Natural Resources, Inc. (“CHNR”), a natural resources company based in the People’s Republic of China (the “PRC”) with shares listed on the NASDAQ Capital Market, recently completed the spin-off (the “Spin-Off”) and listing by introduction (the...

U.S. Supreme Court Hears Arguments on Critical Issue for Securities Fraud Class Actions
, March 10, 2014
On March 5, 2014, the U.S. Supreme Court heard oral argument in Halliburton Co. v. Erica P. John Fund, Inc., No. 13-317, which presents whether to overrule or significantly limit plaintiffs’ ability to rely on the legal presumption that each would-be class member in a securities fraud class...

International Tax Cooperation: OECD Standard for Automatic Exchange of Financial Account Information
, March 05, 2014
The Organisation for Economic Cooperation and Development has published a Standard for Automatic Exchange of Financial Account Information to aid in the global fight against international tax avoidance and evasion. Implementation of the Standard has been formally agreed to by the G20.

New York Budget Bill Proposes Estate and Gift Tax Reform and Changes to Income Taxation of Trusts
, March 05, 2014
On January 21, 2014, Governor Cuomo submitted his Executive Budget Bill for 2014-2015 to the New York State Legislature. Such Bill, as amended (the “Bill”) if passed, would include in the estate of a New York resident any gifts made on or after April 1, 2014 and while such taxpayer was...

Regulations Clarify When a Section 83 Substantial Risk of Forfeiture Exists: Only Established Through Service Condition or Performance Condition; Application of Section 16(b) Short-Swing Liability Rule Clarified
, February 27, 2014
On February 25, 2014, the Treasury Department and the IRS issued final regulations clarifying circumstances in which a substantial risk of forfeiture exists under Section 83 of the Internal Revenue Code. Section 83 generally provides that, when property is transferred in connection with the...

“Enhanced Prudential Standards” for Large U.S. Bank Holding Companies and Foreign Banking Organizations: Federal Reserve Approves Final Rule Implementing Certain Provisions of Section 165 of the Dodd-Frank Act Increasing Supervision and Regulation of Large U.S. Bank Holding Companies and Foreign Banking Organizations
, February 26, 2014
On February 18, 2014, the Board of Governors of the Federal Reserve System (the “FRB”) approved a final rule (the “Final Rule”) implementing certain of the “enhanced prudential standards” mandated by Section 165 of the Dodd-Frank Wall Street Reform and Consumer...

Changes to UK Corporate Prosecution Regime: Implementation of Deferred Prosecution Agreements and New Sentencing Guidelines
, February 26, 2014
Two new initiatives will shortly bring UK regulators one step nearer to emulating their U.S. counterparts in the enforcement of corporate crime. First, beginning on February 24, 2014, the Serious Fraud Office (“SFO”) will be permitted to enter into deferred prosecution agreements...

Federal Circuit Upholds De Novo Standard of Review for Claim Construction: En Banc Majority Holds that Claim Construction Will Continue to Receive De Novo Review on Appeal, Maintaining Current Law
, February 26, 2014
In Lighting Ballast Control LLC v. Philips Electronics North America Corp., the Court of Appeals for the Federal Circuit upheld, en banc, current law under which all aspects of claim construction - the determination of the meaning and scope of patent claims and claim terms - are questions of law...

New York City Requires Employers to Provide Reasonable Accommodations to Pregnant Workers: New York City Employers Required to Provide Reasonable Accommodations for Pregnancy, Childbirth and Related Conditions as of January 30, 2014 and to Provide Written Notice to Employees by May 30, 2014
, February 26, 2014
The New York City Council has passed an amendment to the New York City Human Rights Law that requires employers to provide reasonable accommodations to pregnant employees and employees recovering from childbirth and also to provide written notice to employees. The amendment was signed into law by...

Transfer Pricing Audit Roadmap: Internal Revenue Service Provides Guidance to Assist IRS Agents in Planning, Executing and Resolving Transfer Pricing Examinations
, February 26, 2014
On February 14, 2014, the Internal Revenue Service (the “IRS”) released a Transfer Pricing Audit Roadmap (the “Roadmap”) that provides IRS employees with audit techniques and tools to assist in the planning, execution and resolution of transfer pricing examinations. The...

Section 4371 Excise Tax on Insurance and Reinsurance Contracts: District Court Holds that Federal Excise Tax Does Not Apply to Retrocession Agreements
, February 14, 2014
On February 5, 2014, in Validus Reinsurance, Ltd. v. United States, 2014 WL 462886 (D.D.C. Feb. 5, 2014), the District Court for the District of Columbia held that the excise tax imposed on insurance and reinsurance contracts under Section 4371 of the Internal Revenue Code (the “Code”)...


IRS Issues Proposed Regulations on Allocation of Partnership Liabilities and Disguised Sales Rules: The Proposed Regulations, If Adopted, Would Affect the Tax Consequences of Many Transactions Involving Partners and Partnerships
, February 10, 2014
On January 29, 2014, the IRS and Treasury Department issued proposed regulations (the “Proposed Regulations”) that would amend (i) the rules regarding allocation of partnership liabilities and (ii) the partnership disguised sales rules.

UK Employment Arrangements: UK Publishes Proposed Tax Measures Against Dual Contracts
, February 10, 2014
The UK government has published the draft legislation announced in December’s Autumn Statement to “end the abuse of dual contracts”. Dual contracts have in particular been used by employees resident, but not domiciled, in the United Kingdom to benefit from the UK’s...

Chinese Affiliates of Big Four Accounting Firms Ordered Barred from Practicing Before the SEC for Six Months; Suspension Stayed Pending Appeal: Administrative Law Judge Finds that the Firms “Willfully Refused” to Comply with SEC Requests for Audit Work Papers for Issuers Under Investigation for Accounting Fraud
, February 03, 2014
On January 22, 2014, a Securities and Exchange Commission (“SEC”) administrative law judge issued a decision that is of substantial importance to China-based issuers of securities that are registered in the United States, to multinational corporations with significant operations in...

Corporate Inversion Transactions: IRS and Treasury Issue Temporary Regulations to Determine When Stock Is Disregarded for Purposes of the Internal Revenue Code’s Anti-Inversion Rules
, January 31, 2014
On January 16, 2014, the IRS and the Treasury Department issued temporary and proposed regulations (the “Regulations”) that disregard certain stock of a foreign corporation when calculating ownership of the foreign corporation in determining whether the foreign corporation is a...

Patent Infringement and Declaratory Judgment: U.S. Supreme Court Holds That a Patentee Has the Burden of Proving Infringement in a Declaratory Judgment Action Brought by a Licensee
, January 31, 2014
The U.S. Supreme Court has issued its first in a series of important patent decisions this Term. In Medtronic, Inc. v. Mirowski Family Ventures, LLC, No. 12-1128 (January 22, 2014), the Court unanimously reversed the Court of Appeals for the Federal Circuit, and held that when a licensee seeks a...

Heightened Risk Governance Standards for Banks and Bank Boards of Directors: Proposed OCC “Guidelines” Would Establish Heightened Standards for Large National Banks’ Risk Governance Frameworks and Boards of Directors, and Accelerate Trends of Regulatory Involvement and Reliance on Enforcement
, January 24, 2014
On January 16, 2014, the Office of the Comptroller of the Currency (the “OCC”) solicited public comment, through a Notice of Proposed Rulemaking (the “NPR”), on proposed “guidelines” to establish minimum standards for the design and implementation of risk...

Securities Law—Potential Expansion of Liability Theories Under the Martin Act: New York State Attorney General and BlackRock Settle Investigation into BlackRock’s Analyst Survey Program, Signaling Potential Expansion of Martin Act Liability Under “Insider Trading 2.0” Theory
, January 24, 2014
On January 8, 2014, the New York State Attorney General and BlackRock, Inc. entered into a settlement agreement by which BlackRock agreed to end its Wall Street research analyst survey program. The Attorney General alleged that BlackRock’s practice of systematically surveying and aggregating...

Hart-Scott-Rodino Act: HSR Act Revised Jurisdictional Thresholds
, January 20, 2014
The thresholds set forth in the HSR Act have been revised-as they are annually-based on the change in gross national product. The minimum size of transaction has been raised from $70.9 million to $75.9 million effective thirty days after the notice is published in the Federal Register. The notice...

Physical Commodities and Merchant Banking Activities Conducted by Financial Holding Companies: Federal Reserve Seeks Public Comment on New Limitations on Physical Commodities and Merchant Banking Activities Conducted by Financial Holding Companies Under the Bank Holding Company Act
, January 20, 2014
Earlier this week, the Board of Governors of the Federal Reserve System (the “Board”) solicited public comment, through an advance notice of proposed rulemaking (the “ANPR”), regarding various issues and questions related to physical commodities activities conducted by...

Personal Jurisdiction: U.S. Supreme Court Limits General Personal Jurisdiction Over Out-of-State and Foreign Corporations
, January 17, 2014
In Daimler AG v. Bauman, No. 11-965 (Jan. 14, 2014), the U.S. Supreme Court limited the scope of general personal jurisdiction over out-of-state and foreign corporations. It held that a corporation is subject to general jurisdiction only in a State where its contacts are so “continuous and...

Volcker Rule: Agencies Issue Interim Final Rule Exempting Certain TruPS-Backed CDOs from the Volcker Rule’s Prohibition on Banking Entities’ Holding Ownership Interests in or Sponsoring Covered Funds
, January 17, 2014
Earlier this evening, the Board of Governors of the Federal Reserve System, Office of the Comptroller of the Currency (the “OCC”), Federal Deposit Insurance Corporation (such three agencies together, the “Banking Agencies”), Securities and Exchange Commission, and Commodity...

CFTC Cross-Border Jurisdiction and Comparability Determinations: CFTC Issues Substituted Compliance Comparability Determinations and Takes Other Actions Regarding the Cross-Border Applicability of Dodd-Frank Title VII
, January 08, 2014
The Commodity Futures Trading Commission (“CFTC”) has recently taken a number of actions related to the cross-border applicability of Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). On December 20, 2013, the Commodity...

IRS Issues Regulations Regarding Ownership and Information Reporting of Passive Foreign Investment Companies: Final and Temporary Regulations Provide Guidance Regarding Ownership of Passive Foreign Investment Companies and Implement the Annual Report Requirement for Shareholders of Passive Foreign Investment Companies
, January 08, 2014
On December 30, 2013, the IRS and Treasury Department issued Temporary and Final Regulations providing guidance on the ownership of “passive foreign investment companies” and implementing an annual reporting requirement for shareholders of such companies. The regulations replace and...

Regulatory Capital Requirements: UK Enacts Tax Regime for New Additional Tier 1 and Tier 2 Regulatory Capital Instruments
, January 08, 2014
The UK Parliament has approved regulations setting out the tax treatment of Additional Tier 1 and Tier 2 regulatory capital securities issued by UK financial institutions to reinforce their regulatory capital base under Basel III.

Volcker Rule: Agencies Reviewing Applicability of Volcker Rule to TruPS-Backed CDOs; Intent Appears to Be to Forestall Immediate Write-Downs
, January 03, 2014
Earlier this afternoon, the Board of Governors of the Federal Reserve System (the “Federal Reserve”), Office of the Comptroller of the Currency (the “OCC”), Federal Deposit Insurance Corporation (the “FDIC”) and Securities and Exchange Commission (collectively,...

IRS Issues Final and New Proposed Regulations Implementing the 3.8% Tax on Investment Income: Final Regulations and New Proposed Regulations Implement the 3.8% Tax on Net Investment Income of Individuals, Estates and Trusts with Income in Excess of Statutory Thresholds
, January 02, 2014
The Internal Revenue Service (the “IRS”) recently adopted final regulations (the “Final Regulations”) and contemporaneously issued new proposed regulations (the “2013 Proposed Regulations”) related to the 3.8% tax on the “net investment income” of...

M&A Executive Compensation Enhancements and Impact on the Say-on-Golden-Parachute Vote: Review Shows that Companies Continue to Adopt Deal-Related Enhancements and that Many Enhancements do not Negatively Impact the Say-on-Golden-Parachute Vote
, December 19, 2013
We have reviewed the 365 merger agreements that were announced during the two years after the “Say-on-Golden-Parachute” vote rule went into effect on April 25, 2011 and that were subject to the rule. 1 We found that 39 companies (11% of the total) substantively enhanced executive...

Federal Insurance Office Report: The Federal Insurance Office Releases Report on How to Modernize and Improve Insurance Regulation in the United States
, December 17, 2013
On December 12, 2013, the Federal Insurance Office released its long - awaited report to Congress on how to modernize and improve the system of insurance regulation in the United States, as mandated by the Dodd - Frank Wall Street Reform and Consumer Protection Act. The Report recommends various...

Volcker Rule Agencies Approve Long - Awaited Final Rule; Most Requirements to Take Effect on July 21, 2015
, December 17, 2013
On December 10, 2013, the Board of Governors of the Federal Reserve System (the “Federal Reserve”), Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation (the “FDIC”), Securities and Exchange Commission (the “SEC”) and Commodity Futures...

“SPOE” Resolution Strategy for Systemically Important Financial Institutions Under Dodd-Frank: FDIC Seeks Comment on Its “Single Point of Entry” Strategy for Resolving Systemically Important Financial Institutions Under Title II of the Dodd-Frank Act
, December 16, 2013
On December 10, 2013, the Federal Deposit Insurance Corporation (the “FDIC”) proposed for public comment a notice (the “Notice”) describing its “Single Point of Entry” (“SPOE”) strategy for resolving systemically important financial institutions...

Financial Market Utilities Regulation: Federal Reserve Issues Final Rules Setting Forth Requirements for a Federal Reserve Bank to Open and Maintain Accounts for, and Provide Financial Services to, Designated Financial Market Utilities
, December 16, 2013
On December 6, 2013, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) approved a final rule (the “Final Rules”) to amend Regulation HH (12 C.F.R., part 234), the rule relating to the financial market utilities (“FMUs”) that are...

EU Merger Control: European Commission Simplifies Merger Control Procedures
, December 13, 2013
On 5 December 2013, the European Commission adopted a package of measures to simplify certain procedural aspects of EU merger control. The package will allow more transactions to be reviewed under the European Commission’s simplified review procedure, which requires merging parties to provide...

Nasdaq Compensation Committee Independence Requirements: SEC Publishes Nasdaq Rule Change Removing Prohibition on Receipt of Compensatory Fees by Compensation Committee Members; Change Aligns Nasdaq Rule with NYSE Rule
, December 13, 2013
Yesterday, the Securities and Exchange Commission published immediately effective changes to the NASDAQ Stock Market Listing Rules that remove the prohibition on a compensation committee member’s receipt of compensatory fees. Instead, consistent with the New York Stock Exchange compensation...

Activision Blizzard, Inc. v. Hayes: Delaware Supreme Court Rules that Equity Repurchase Is not a Merger, Business Combination or Similar Transaction
, December 11, 2013
In an order entered in October and an opinion issued on November 15, 2013, the Delaware Supreme Court, sitting en banc, unanimously reversed a decision of the Court of Chancery (V.C. Laster) that had preliminarily enjoined the repurchase by Activision Blizzard, Inc. (“Activision”) of...

Great Hill Equity Partners IV, LP v. SIG Growth Equity Fund I, LLLP: Delaware Court of Chancery Rules that Attorney-Client Privilege Passes as a Matter of Law to the Surviving Corporation in a Merger
, December 11, 2013
In a recent opinion, the Delaware Court of Chancery (Strine, C.) found that under the unambiguous language of Section 259 of the Delaware General Corporation Law (“DGCL”), the attorney-client privilege of an acquired corporation passes as a matter of law with all other privileges to the...

EU State Aid: EU Commission Consults on New Rules on State Aid for Companies in Difficulty
, December 11, 2013
On 5 November 2013, the European Commission released for public comment proposed new guidelines on state aid for rescuing and restructuring companies that operate in sectors other than financial services coal and steel. The proposed guidelines are intended to replace the Commission’s current...

German Merger Control: German Federal Cartel Office Publishes Draft Guidelines on Jurisdiction for Merger Review
, December 11, 2013
On 5 December 2013, the German Federal Cartel Office (Bundeskartellamt) published new draft guidelines on its jurisdiction to review M&A transactions.

UK Employment Arrangements: UK Plans Tax Measures Against Dual Contracts
, December 11, 2013
The UK government published its Autumn Statement on 5 December 2013. In his speech the Chancellor of the Exchequer announced, among other proposed changes, that the government would “end the abuse of dual contracts”.

Withholding Tax on Dividend Equivalent Payments: IRS and Treasury Issue Final and Proposed Regulations on Withholding Tax on “Dividend Equivalent Payments”
, December 11, 2013
On December 5, 2013, the Treasury Department and the IRS issued final and proposed regulations (the “Final Regulations” and “New Proposed Regulations”, respectively) relating to “dividend equivalent” payments on certain U.S. equity swaps and other U.S....

Legal Exposure Impact on CCAR 2014
, November 26, 2013
A series of recent pronouncements by the bank regulators and announcements of large fines and settlements by banks are likely to have a significant impact on the Comprehensive Capital Analysis and Review (“CCAR”) process for 2014.

New York State Tax Reform Commission Issues Final Report: New York State Tax Reform and Fairness Commission Recommends Merging Bank Tax into Corporate Franchise Tax, Streamlining Corporate Audit Process, Increasing Estate Tax Exemption, Eliminating GST Tax, Reinstating Gift Tax and Closing “DING” Trust Loophole
, November 26, 2013
On November 11, 2013, the New York State Tax Reform and Fairness Commission issued its final report (the “Commission” and the “Report”, respectively) recommending changes to New York’s tax system, including changes to its franchise, sales, estate and personal income...

CFTC Proposes Position Limit Aggregation Rules: CFTC Proposes Aggregation Standards Applicable to Position Limits for Derivatives
, November 22, 2013
On November 5, 2013, the Commodity Futures Trading Commission (the “CFTC” or “Commission”) held a public meeting during which it voted unanimously to propose for public comment rules that would expand in certain respects the availability of aggregation exemptions (the...

Federal Circuit Clarifies “Nexus” Requirement for Permanently Enjoining Patent Infringement: The Court of Appeals Vacates the District Court’s Denial of Apple’s Request for a Permanent Injunction Against Samsung With Respect to Smartphone/Tablet Utility Patents and Remands for Further Proceedings
, November 22, 2013
On November 18, 2013, in Apple Inc. v. Samsung Electronics Co., Ltd., the Court of Appeals for the Federal Circuit vacated the denial by the District Court for the Northern District of California of Apple’s request for injunctive relief against Samsung’s infringement of several utility...

IRS Issues Directive Revising the Information Document Request Enforcement Process for LBI Examinations: IRS Large Business and International Division Revises and Expands Earlier Directive on Requirements for Revenue Agents Who Issue Information Document Requests
, November 22, 2013
The Commissioner of the Internal Revenue Service (“IRS”) Large Business and International Division (“LBI”) issued a directive on November 4, 2013 (the “November Directive”), to revenue agents responsible for audits conducted by LBI. LBI oversees audits of...

U.S. Supreme Court to Consider Critical Issue for Securities Fraud Class Actions: Possible Overruling of Basic’s “Fraud-on-the-Market” Presumption Could Spell Major Changes for Current Regime
, November 22, 2013
On November 15, 2013, the U.S. Supreme Court granted certiorari in the case of Halliburton Co. v. Erica P. John Fund, Inc., No. 13-317, raising the prospect that the Court will overrule or significantly limit the legal presumption that each member of a securities fraud class action relied on the...

Hart-Scott-Rodino Act: Federal Trade Commission Amends HSR Act Rules Applicable to Transfers of Exclusive Patent Rights in the Pharmaceutical Industry
, November 12, 2013
The Federal Trade Commission (“FTC”) has amended the rules promulgated under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act Rules”) to provide “clarity and consistency” to the determination of whether a transfer of rights to a patent, o r part...

U.S. District Court Holds That a Foreign Parent Company Can Be Liable for Pension Liabilities of Its U.S. Subsidiary
, November 12, 2013
The U.S. District Court for the District of Columbia recently held in Pension Benefit Guaranty Corporation v. Asahi Tec Corporation that (i) it had personal jurisdiction over Asahi Tec Corporation (“Asahi”), a Japanese corporation, and (ii) Asahi was liabl e for the underfunded defined...

Bank Capital Plans and Stress Tests: Federal Reserve Issues Instructions and Guidance for the 2014 Comprehensive Capital Analysis and Review Program
, November 07, 2013
Last Friday, the Federal Reserve issued its summary instructions and guidance (the “CCAR 2014 Instructions”) for the supervisory 2014 Comprehensive Capital Analysis and Review program (“CCAR 2014”) applicable to bank holding companies with $50 billion or more of total con...


FATCA: Updates and Draft FFI Agreement: IRS Notice Previews Proposed FATCA Guidance and Provides a Draft Agreement for Participating FFIs
, November 07, 2013
On October 29, 2013, the Internal Revenue Service (the “IRS”) and the Treasury Department (“Treasury”) issued a notice providing additional guidance regarding the Foreign Account Tax Compliance Act (“FATCA”). Notice 2013 - 69 (the “notice”) previews...

Final Regulations Ease Compliance with the Loss Trafficking Rules: IRS Finalizes Regulations Limiting the Application of the Section 382 Segregation Rules in Certain Circumstances
, November 07, 2013
Under Section 382 of the Internal Revenue Code, a corporation’s use of net operating losses is limited if there is an “ownership change.” On October 22, 2013, the Internal Revenue Service adopted Final Regulations intended to lessen the compliance burden on a corporation...

Partial Offer for Chong Hing Bank Limited: Takeover Code Lessons
, November 07, 2013
Under Section 382 of the Internal Revenue Code, a corporation’s use of net operating losses is limited if there is an “ownership change.” On October 22, 2013, the Internal Revenue Service adopted Final Regulations intended to lessen the compliance burden on a corporation...

Basel III Liquidity Framework: Federal Reserve Issues Basel III Liquidity Coverage Ratio Proposal for Large U.S. Banks
, November 01, 2013
On Thursday, October 24, the Board of Governors of the Federal Reserve System (the “FRB”) approved for publication a notice of proposed rulemaking (the “Proposal”) to implement a quantitative liquidity coverage ratio (“LCR”) requirement for certain large domestic...

ISS Proposes Limited Updates to 2014 Voting Policy: Proposals Would Provide Greater Flexibility on Board Implementation of Shareholder Proposals and Eliminate One-Year TSR from the Quantitative Pay-for-Performance Analysis
, November 01, 2013
Institutional Shareholder Services, the influential proxy advisory firm, has published for public comment two proposed changes to its proxy voting guidelines for U.S. companies. The proposals are limited and do not include any change related to the effect of longer board tenure on director...

Royalty Rates for Standard-Essential Patents: In Second Decision of Its Kind, District Court Determines RAND Royalty Rate for 19 Patents Essential to 802.11 WiFi Standard
, October 09, 2013
Many patents that are essential to a technology standard-so-called “standard-essential patents”-are subject to a commitment that they be licensed on “reasonable and non-discriminatory” (“RAND”) terms. Last week, the district court in In re Innovatio IP Ventures,...

Asset Management and Financial Stability: Office of Financial Research Publishes Report on “Asset Management and Financial Stability”
, October 07, 2013
On September 30, 2013, the U.S. Department of the Treasury’s Office of Financial Research (OFR) delivered a report to the Financial Stability Oversight Council (FSOC) exploring ways that activities in the asset management industry might create, amplify or transmit stress through the...

Bank Capital Plans and Stress Tests: Federal Reserve Issues Interim Final Rules Addressing Application of New Basel III-Based Capital Framework for Purposes of the 2013-2014 Capital Plan and Stress Test Cycle
, October 07, 2013
The Federal Reserve recently issued two interim final rules that clarify how covered companies must incorporate the new U.S. Basel III-based final capital rules (the “Basel III Capital Rules”) into their capital plan submissions and Dodd-Frank Act stress tests for the upcoming 2013-2014...

Credit Risk Retention: Six Federal Agencies Repropose Joint Rules on Credit Risk Retention
, October 07, 2013
On August 28, 2013, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Securities and Exchange Commission (“SEC”), the Federal Housing Finance Agency (“FHFA”) and the Department of Housing and Urban Development...

SEC Publishes CEO Pay Ratio Proposal: Will Not Affect 2014 or, Most Likely, 2015 Proxy Seasons; Issuers May Use Sampling and Reasonable Estimates to Determine Median; Ratio Must Include All Full-Time, Part-Time, Temporary, Seasonal and Non U.S. Employees
, September 24, 2013
On Wednesday, the SEC published the text of its proposed rule, adopted that morning by a three-to-two vote, requiring U.S. public companies to disclose:

Recent Amendments to Delaware Corporation and LLC Statutes: Adoption of Section 251(h) Facilitates Tender and Exchange Offers; Fiduciary Duties Obtain in LLC Absent Elimination; Public Benefit Corporations Authorized
, September 19, 2013
The State of Delaware recently enacted several significant changes to the Delaware General Corporation Law (“DGCL”) and the Delaware LLC Act (“LLC Act”).

SEC Proposes CEO Pay Ratio Rule: At Earliest, New Rule Will Not Be Effective Until 2015 Proxy Season; Issuers May Use Sampling and Estimates to Calculate Ratio
, September 19, 2013
This morning, a divided SEC Commission proposed a requirement that U.S. public companies disclose:

Broker-Dealer Audit and Reporting Updates: PCAOB Report and New SEC Rules Address Audit, Financial Reporting, Internal Control and Risk Management Issues Relating to Broker-Dealers; These Developments May Be Relevant for Audit Committees of Public Companies that Own Broker-Dealers
, September 17, 2013
The Public Company Accounting Oversight Board and the Securities and Exchange Commission have recently issued reports and taken other steps to strengthen the audit, financial reporting and risk management functions relating to broker-dealers. Broker-dealers, as well as audit committees of public...