News

Delaware Supreme Court Upholds Merger Termination Under Material Adverse Effect Provision

For apparently the first time, a Delaware court has found that a material adverse effect occurred in a merger transaction and affirmed the unilateral termination of the agreement. In 2008, the Delaware Chancery Court in Hexion Specialty Chemicals, Inc. v. Huntsman Corp., recognizing material adverse effect clauses as a “backstop” against the occurrence of unknown events substantially threatening the long-term profitability of the target, stated “(m)any commentators have noted that Delaware courts have never found a material adverse effect to have occurred in the context of a merger agreement.” 965 A.2d 715, 738 (Del. Ch. 2008). On Dec. 7, the Supreme Court of Delaware, in the expedited appeal of Akorn, Inc. v. Fresenius Kabi AG, upheld the chancery court’s opinion finding, among other things, the acquisition target “had suffered a material adverse effect” under the merger agreement “that excused any obligation on (the acquirer’s) part to close.” Notably, the case was submitted to the chancery court on Sept. 25, with a 246-page opinion issued on Oct. 1.

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Regular Memphis Pro Bono Clinic Has Served 12K Since Inception

Since its beginnings over a decade ago, a Memphis-area pro bono legal clinic has gone on to serve roughly 12,000 individuals in need, The Daily Memphian reports. The Saturday Legal Clinic, sponsored by Memphis Area Legal Services (MALS) and the Memphis Bar Association, has been held at the Benjamin L. Hooks Library once a month since November 2006. Firms and associations work to promote the event to ensure that 30 to 40 attorneys attend each month.
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Webcasts: Transactional Practice Series (Parts 1 and 2)

New for 2018! Every lawyer experiences transactional law at some point in the year, and this all-in-one online video series features up to six dynamic hours of valuable content providing lawyers in various areas of the law with the information, tools, and tips needed to successfully handle transactional, traditional business, and probate matters. Perfect for General, Solo, Small Firms, Real Estate Law, Entertainment Law, Health Law, Business Law, Bankruptcy Law or Young Lawyers Division attorneys. Earn up to five general (online) CLE hours and one dual (online) hour. Part 1: Earn up to 3 general (online) CLE hoursPart 2: Earn up to 2 general and 1 dual (online) CLE hours.

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CBS Has to Pay Moonves’ Legal Fees Against CBS

Former CBS Corporation Chairman and CEO Les Moonves may utilize a confidential arbitration to challenge the decision recently reached by CBS’s board to deny him any severance payment, The New York Times reports. In his termination agreement, CBS is liable for paying his attorney fees. Arbitration at this level could run up anywhere between $20 million to $50 million. CBS is facing high costs due to having to pay for legal representation for itself, its board and Moonves; a cheaper option may be a settlement. However, the article notes that a settlement would likely anger many people given the publicity of the sexual assault and misconduct allegations against Moonves.

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Johnson & Johnson Loses Bid to Reverse $4.7 Billion Verdict in Baby Powder Case

Johnson & Johnson lost its motion on Wednesday to reverse a jury verdict that awarded $4.69 billion to women who blamed their ovarian cancer on asbestos in the company’s baby powder and other talc products, The New York Times reports. Missouri Circuit Court Judge Rex Burlison upheld the verdict, which represented one of the largest personal injury awards on record. Johnson & Johnson has known for decades about the risk of asbestos contamination in its talc, but fought to keep negative information behind closed doors. The company said the verdict could still be reversed in appeals court.
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3 More Former Pilot Flying J Executives Sentenced

Three more former Pilot Flying J sales executives appeared in court yesterday to be sentenced for their roles in the fraud scheme that also took down the company’s former president and several other leaders, Knoxnews reports. Arnold Ralenkotter, Jay Stinnett and John Spiewak all worked approving contracts they knew Pilot didn't plan to honor with smaller trucking companies that sales execs hoped wouldn't be sophisticated enough to spot the deceit. Ralenkotter and Spiewak will serve 21 months apiece, and Stinnett will serve 30 months. 
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Court Solicits Comments on Rule Change for Professional Privilege Tax Payments

The Tennessee Supreme Court is soliciting comments on a proposed rule change that would make delinquent professional privilege tax fees payable via an online portal and remove the requirement of a Privilege Tax Delinquency Notice to be sent via mail, requiring only an email notice. The deadline for submitting written comments is Feb. 4. Written comments may be emailed to appellatecourtclerk@tncourts.gov or mailed to James M. Hivner, Clerk, Re: Tenn. Sup. Ct. R. 9, section 26 Tennessee Appellate Courts, 100 Supreme Court Building, 401 7th Avenue North, Nashville, Tennessee 37219-1407.
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Boy Scouts of America Considers Chapter 11 Filing

The Boy Scouts of America (BSA) is struggling financially as costs mount for defending against allegations of  sexual abuse of boys, NBC News reports. The nonprofit organization is exploring all options to continue its programming without interruption, including filing for Chapter 11 protection. Following some controversial policy changes — including the removal of a ban on openly gay members, accepting openly gay adult scout leaders, accepting girls into the program and changing the program name to a gender-neutral alternative — the Mormon Church decided to end its 105-year partnership with the BSA. The strategy of filing for Chapter 11 protection is not uncommon; many religious groups and dioceses have filed for Chapter 11 protections during settlement negotiations with victims. USA Gymnastics also filed for bankruptcy while the organization deals with a mountain of lawsuits related to the Larry Nassar scandal.   

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Amazon Faces Joint Employer Lawsuits

A federal judge recently ruled against the class claims of a delivery driver in the Miller v. Amazon.com Inc. case., Bloomberg Law reports. However, the judge’s ruling did leave room for a potential joint employment finding. The case is currently being reviewed under California labor law, but this finding would set precedent for other major businesses that regularly use contracted or subcontracted labor in California and other states with similar ‘joint employer’ laws. An additional lawsuit in a different jurisdiction seeks to hold Amazon liable as a joint employer of contractor’s workers.

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Join Us Today: LAW TECH

Today's the day! Discover the newest technology for your law practice and law office at this year's Law Tech Blast at the Tennessee Bar Center in Nashville!

The flexible open house format allows you to create your own schedule. You can attend CLE sessions, enter to win prizes, network with attendees, visit with sponsors and interact with speakers. Take as many or as few CLE hours as you need. Only those seeking to be awarded CLE Credit will be charged. The registration desk will be open all day, so you can come and go for the hours you need when it is convenient for you. Attendees can earn up to 6.5 hours of Dual CLE credit.

CLE TOPICS:
  • GDPR, Cloud and Technological Competency
  • The Bill and Phil Tech Show 2019: BEAT THE CLOCK
  • Best Practices: Information Security for Firms
  • Judicial Panel: Technology in the Courtroom
  • Know When to Hold 'Em
  • Digital Evidence – A Technical Life Raft for the Legal Mind
  • Make it Rain: Ethics Guidelines and Practice Essentials

ATTEND TO WIN: Attendees will have a chance to win prizes, including an iPad Pro. The tech prize drawing will be held at the 10:30 a.m. break. Must be present to win.

TAKE A LYFT: TBA has partnered with Lyft to offer attendees a discounted ride.

  • New to Lyft?: Get $5 off 2 rides at http://lyft.com/i/lawtech5 or download the app and enter code LAWTECH5
  • Already Have Lyft?: Save 10% off 2 rides to or from Law Tech Blast with code LAWTECH

THANK YOU TO OUR SPONSORS & EXHIBITORS:


 

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Give the Gift of TBA Membership

Give yourself (or a friend) the gift that keeps giving — one-year of unlimited access to professional development opportunities and a number of programs and services designed to help you become a better practitioner. Founded in 1881, the Tennessee Bar Association is dedicated to enhancing fellowship among members of the state's legal community. Oh, and did we mention some of the benefits? Earn three pre-paid credits to use on any live or online course featured in the 12-days of CLE. Join now!

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Downtown Memphis Development Board Approves First TIF Property

The Center City Revenue Finance Corp., a state-chartered industrial development board in Memphis, recently approved its first tax increment financing initiative, the Memphis Business Journal reports. The Union Row project will develop around 800 apartments, 200 hotel rooms and 460,000 square feet of mixed-use office and retail space in a location between South City and Downtown. Construction is set to start in June 2019, with the first phase scheduled for completion by June 2021.

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Application of Blockchain Tech Reaches the Music Industry

This article from BBC discusses how blockchain technology has the potential to change several industries, including the music industry. Musician Imogen Heap held a small show in Sweden and offered the ticket holders an opportunity to join an experiment of hers - those that sign up agreed to a ‘smart contract’ to ensure they automatically receive a portion of the royalties made from the sale of the recorded show. Blockchain is primarily used to support cryptocurrencies, like BitCoin, but other industries are starting to explore the benefits of utilizing the technology. This is increasing the need for blockchain specialists in all fields. The article notes that the demand for employees with expertise in blockchain is six times higher than it was in 2015.

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CVS to Scale Back Retail Operations After Aetna Acquisition

Pharmacy chain CVS Health on Wednesday announced that it plans to reduce the amount of store space devoted to retail and shift more to health care after its acquisition of Aetna, USA Today reports. With the $70 billion-dollar deal, CVS intends to position itself to control key health care components such as pharmacy, drug distribution and insurance. The acquisition has not been without controversy, with U.S. District Judge Richard Leon admonishing a U.S. Justice Department lawyer on Thursday for keeping him “in the dark” and treating his antitrust review as a “rubber stamp operation.” The Justice Department approved the deal in October on the condition that Aetna sells its Medicare Part D prescription drug plan business.

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Judge Refuses to Label Opioid Manufacturers as ‘Drug Dealers’

Eighth Judicial District Circuit Court Judge John D. McAfee has refused a move by prosecutors to label the manufacturers of opiates as drug dealers, Knoxnews reports. Fourteen prosecutors representing 47 counties in Middle and East Tennessee last year filed lawsuits against opioid makers, including OxyContin maker Purdue Pharma, and distributors under the Tennessee Drug Dealer Liability Act. In his ruling McAfee pointed out that despite their marketing practices, opioid manufacturers are making a legal and FDA-approved product.
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G20 Summit will Focus on Intellectual Property

The Group of 20 Summit starts today in Buenos Aires, Argentina, and President Trump and President Xi Jinping of China are expected to discuss trade, intellectual property and the theft of American technology, The New York Times reports. The Trump administration has accused China of stealing American technology on numerous occasions. However, the article points out that these accusations are offensive to the Chinese and may be a barrier for accomplishing a trade deal at the summit. The administration and American companies have expressed distaste for several Chinese trade requirements, including joint venture requirements for American companies wanting to do business in China, requirements of foreign-owned research companies being built in China and a compulsory certification program for foreign products. All of these policies put sensitive American technology at risk for replication and theft. In response to the Chinese appropriating American technology, President Trump has imposed significant tariffs on over $200 billion of Chinese goods. China has eased joint venture requirements in some sectors and is implementing a new intellectual property appeals court system to remedy some of the foreign concerns regarding trade secrets.   

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Rutherford County Industrial Development Board Member Faces Federal Fraud Charges

Rutherford County Industrial Development Board (IDB) member and former chairman of the Rutherford County Republican Party Nate Schott has resigned from the board after being indicted on federal fraud charges, The Daily News Journal reports. Schott is accused of using his dental practice to defraud TennCare, DentaQuest, Delta Dental and Cigna by having employees submit false and fraudulent claims. An IDB steering committee will begin reviewing applicants for the vacancy in January; interested parties can apply at the mayor's office on the first floor of the County Courthouse in Murfreesboro.

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Jay Z Lawsuit Halted Due to Lack of African-American Arbitrators

A lawsuit between Jay Z’s company, Roc Nation, and clothing company Iconix was temporarily halted on Wednesday due to the lack of African-American arbitrators available to assess the case, The New York Times reports. Iconix purchased Rocawear clothing brand from Jay Z, real name Shawn Carter, in 2007.  Later, Jay Z produced merchandise with the logo of a newly formed company, Roc Nation. Iconix argued the merchandise violated the terms of the Rocawear sale; Jay Z countersued, which resulted in an arbitration hearing.  Each side needed to select four arbitrators from 200 members of the American Arbitration Association. It was during this process that Jay Z and his legal team discovered no African-American arbitrators were on the roster for large and complex cases. The association could only find three available arbitrators who identified as African-American, and one had a conflict of interest. Jay Z and his legal team filed a petition arguing that the lack of black arbitrators could subject black litigants, such as Jay Z, to unconscious bias from white arbitrators. Further, the petition also argued that the lack of black arbitrators “deprives litigants of color of a meaningful opportunity to have their claims heard by a panel of arbitrators reflecting their backgrounds and life experience.” The court upheld the petition and the arbitration has been halted until the next hearing set for Dec. 11.

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Ohio Now Accepts Bitcoin as Tax Payment

Ohio State Treasurer Josh Mandel said this week that businesses operating in the state will be able to pay for 23 different types of taxes using bitcoin, Huffington Post reports. Businesses will need to register for the program through a website that utilizes a third-party processor, BitPay. The digital currency is converted into dollars and deposited in the state’s account. Bitcoin is the only cryptocurrency currently accepted, but Mandel is looking to add others in the future. This Forbes article analyzes the tax implications for business that choose to use this type of payment, including triggering tax gains and losses.

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Supreme Court Adopts Proposed Amendments to Rule 33

The Tennessee Supreme Court on Wednesday approved amendments to Rule 33 dealing with the Tennessee Lawyer Assistance Program (TLAP) and the establishment of a supporting organization under the Tennessee Nonprofit Corporation Act. The court filed an order soliciting public comments on the proposed amendments on Oct. 17. It received three written comments during that period, each in support of the proposed amendments.

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Tomorrow: Estate Planning & Probate Forum 2019

This year’s Estate Planning & Probate Forum to be held at the Embassy Suite Cool Springs on Friday! The annual staple allows you to learn from seasoned practitioners and top players in the field while being a beneficiary of necessary CLE credits. Topics for the forum will include:
  • Income tax planning for estates
  • Medicaid protection
  • Charitable planning
  • Legislative updates
  • Ethics in estate planning
  • A Clerk and Master’s panel
  • And more
A networking event will follow the program. Don’t sleep, missing out is irrevocable.
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Former Pilot President Fights Unsealing of Court Documents

Convicted former Pilot Flying J President Mark Hazelwood is fighting an effort by the Knoxville News Sentinel to unseal a transcript of a behind-closed-doors hearing during his trial, a copy of a deal he struck with his former bosses, and notes jurors sent to a judge during deliberations, the newspaper reported on Tuesday. Attorney Richard Hollow last week filed a motion on behalf of the News Sentinel challenging Hazelwood’s bid to keep under seal records in his case involving a closed-door hearing, an employment contract that led Pilot Flying J to fund his defense, and notes jurors sent to U.S. District Judge Curtis L. Collier. The news outlet contends there is no legal basis to keep the records secret.
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Board of Law Examiners Holds Deans' Summit in Nashville

Law school deans from across the state recently gathered in Nashville for the Tennessee Board of Law Examiners’ 2018 Deans’ Summit. The summit, which included deans from most of Tennessee's law schools, featured presentations and discussions on a range of topics, from law student wellness, to innovations at Tennessee law schools, to the state’s recent adoption of the Uniform Bar Exam. Other parts of the program took the form of an open discussion between members of the board and the deans. 
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December CLE in 6 Cities

TBA offers CLE in six locations during December. See offerings in Chattanooga, Knoxville, Memphis, Nashville, Johnson City and Jackson. Find last-minute by the hour through Dec. 31 or take any of the TBA's online CLE packages.
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Longtime NHC Counsel Resigns

Longtime National HealthCare Corp. executive John Lines has resigned from his general counsel post after serving with the company since 2006, The Nashville Post reports. Murfreesboro-based NHC, which runs skilled-nursing facilities and home health care programs in 10 states, disclosed Lines’ resignation in a recent regulatory filing but did not elaborate on the reasons. 
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