Deal Teams Can Scheme to Success

Posted in M&A and Private Equity

By Simon Baskerville and Ed Richardson

Schemes of arrangement are a well-known and familiar tool for many within M&A. They are often used to implement acquisitions of public or widely held companies or restructurings of financial indebtedness, frequently as part of an acquisition through a debt-for-equity transaction. What is less well-known is how schemes of arrangement can potentially be used to manage a target company’s liabilities beyond financial indebtedness particularly in an increasingly litigious and regulated world.

What is a scheme of arrangement?

A long-standing feature of company law, a scheme of arrangement allows a company to impose a compromise or arrangement on its shareholders and/ or creditors, provided the scheme of arrangement is sanctioned by the court and approved by shareholders and/or creditors (depending on who is affected by the scheme) accounting for 75% in value and 50% in number.

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A Significant Win for ISPs: UK Supreme Court rules on blocking order compliance costs

Posted in Dispute Resolution

Favourable Supreme Court decision for ISPs finding they do not have to bear costs of complying with blocking orders.

By Oliver Middleton

Historically, internet service providers (ISPs) that have been ordered to block access to websites have had to bear their own costs of compliance on the basis that it was seen as being part of the cost of carrying out their business. That position has now changed due to the Supreme Court decision in Cartier International AG & ors v BT plc & anor [2018] UKSC 28 on 13 June 2018.

The previous rationale for ISPs bearing their costs was that, whilst they are not wrong-doers, they benefit financially from the content on the internet — including content that infringes intellectual property rights. Therefore, it is fair that they should bear costs of ensuring content infringing intellectual property rights is not accessible as part of the general costs of carrying on their business. Continue Reading

UK To Provide Compensation for Overseas Victims of Economic Crimes

Posted in Dispute Resolution

A new UK policy establishes a commitment to providing victims of overseas bribery with compensation; however, important questions remain that will impact implementation.

By Stuart Alford QC, Nathan H. Seltzer, Joseph M. Bargnesi, Laila Hamzi, Clare Nida, and Christopher M. Ting

The UK’s Serious Fraud Office (SFO), the Crown Prosecution Service (CPS) and the National Crime Agency (NCA) have released a joint statement in support of compensation for overseas victims of bribery, corruption, and other economic crimes. As set forth in the General Principles, which were published on 1 June, the UK enforcement agencies have committed to consider whether victim compensation is appropriate in “all relevant cases,” including those resolved by prosecution, a deferred prosecution agreement (DPA), or a civil settlement. Both aggrieved governments (and their instrumentalities) and corporates facing potential bribery-related inquiries should therefore be aware that the UK government will very likely at least consider victim compensation in any bribery resolution; however practical questions remain that will impact implementation.

UK Policy

In cases resolved through prosecution, the General Principles stipulate that the CPS and SFO will seek remedies under the Proceeds of Crime Act 2002 or the Powers of Criminal Courts (Sentencing) Act 2000 for compensation. In cases resolved with DPAs or through civil settlement, the agencies agree to seek compensation as part of the agreement with the accused. Continue Reading

5 Predictions for the UK’s Serious Fraud Office Under New Director

Posted in Dispute Resolution

New director Lisa Osofsky’s cross-border and corporate experience may lead the SFO in a fresh direction.

By Stuart Alford QC and Clare Nida

The announcement that Lisa Osofsky has been appointed as Director of the UK’s Serious Fraud Office (SFO) likely signals new strategic directions for the agency. For the past six years, the SFO has been led by David Green QC, who stepped down from his position in April. In this blog post, Latham partner and former Head of the Fraud Division at the SFO, Stuart Alford QC, provides five predictions for the SFO’s strategic priorities under Osofsky.


Osofsky previously served as Regional Leader of Investigations for Europe, the Middle East, and Africa (EMEA) at Exiger, the global regulatory and financial crime, risk and compliance company. She has also held posts on the other side of the Atlantic. Her experience includes serving as a US federal prosecutor, as Deputy General Counsel and Ethics Officer at the FBI, as Money Laundering Reporting Officer (MLRO) at Goldman Sachs International, and as a member of the Corporate Investigation Division of Control Risks. Continue Reading

US Tax Reforms Fuel M&A Activity

Posted in M&A and Private Equity

By William Lu and Jiyeon Lee-Lim

The fundamental US tax reforms brought in this year by the Tax Cuts and Jobs Act (TCJA) have changed the tax landscape for M&A more significantly than any other legislation in the modern era. Businesses and tax advisors will be considering the various opportunities created and threats posed by the TCJA for quite some time. This article looks at the tax drivers behind the current surge in US corporate M&A.

Federal corporate income tax rate reduced to 21%

From 1 January 2018, the TCJA reduces the federal corporate income tax rate from 35% to 21% (although the effective differential will often be less than 14% as a result of new deduction limitations and the addition of new taxes, as discussed below).

This tax rate reduction could increase the cash on balance sheets and overall value of US target corporations and by doing so increase their outbound M&A capabilities.

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New Listing Rules for Sovereign Controlled Companies … In 30 Seconds

Posted in Finance and Capital Markets

The Financial Conduct Authority has published final rules creating a new category within its premium listing regime for companies controlled by a shareholder that is a sovereign country.

By James Inness, Claire A. Keast-Butler, and Koushik K. Prasad

From 1 July, 2018, an issuer with a sovereign state as its controlling shareholder will be eligible for a premium listing if the issuer complies with all the requirements applicable to premium listed issuers under the Listing Rules, other than:

  • Controlling shareholder agreement: Sovereign controlled issuers will not be required to have a relationship agreement with a controlling shareholder. The issuer will still be required to have an independent business as its main activity under LR 6.4.
  • Related party transactions: Sovereign controlled issuers will not have to obtain independent shareholder approval or a sponsor’s confirmation for related party transactions (RPTs) with the sovereign or its associates. The obligations to disclose certain RPTs will apply to sovereign controlled companies.
  • Depositary receipts (DRs): The new premium listing category will extend to sovereign controlled issuers of DRs. DR holders must be afforded the same level of rights, e.g., voting rights that shareholders of premium listed companies enjoy.

For a full client briefing and previous analysis on the consultation process in July 2017, see Latham’s Client Alert here and here.

New UK Government Powers Over Smaller Transactions Raising National Security Concerns

Posted in Emerging Companies and Technology, EU and Competition, M&A and Private Equity

Buyers of businesses that produce military or dual-use goods, certain aspects of computing hardware, or quantum technology for supply in the UK should carefully assess the risk of governmental intervention if their targets fall within the scope of the new regime.

By Jonathan D. Parker and Calum M. Warren

On 11 June 2018, the UK government will gain new powers to review transactions raising potential national security issues if the target business is active in the production of military or dual-use goods, computing hardware, or quantum technology for supply in the UK. The government may intervene if the target business’ UK turnover is as low as £1 million, or if the target business has a share of supply of goods or services within the relevant areas of at least 25%. While these powers will apply to only a limited subset of transactions and do not give rise to mandatory notification requirements, the application of the new powers will require careful scrutiny during the due diligence phase of transactions that are potentially within scope. The new thresholds are the result of the government’s ongoing review of its foreign investment review powers, which may result in a further expansion of governmental powers in the longer-term. Continue Reading

Cartelised Products: In or Out of EEA? Only a Trial Will Tell

Posted in Dispute Resolution, Emerging Companies and Technology, EU and Competition

England may become an increasingly attractive forum for follow on damages claims, particularly those involving indirect cartelised product purchases initially acquired outside EEA the in wake of iiyama decisions.

By Oliver E. Browne and Hayley M. Pizzey


The English Court of Appeal has held iiyama’s two claims against cathode ray tube (CRT) cartelists and liquid crystal display (LCD) cartelists, may proceed to trial. iiyama is involved in the manufacture, distribution, and sale of electronic goods including televisions and computer monitors which originally contained CRTs and now contain LCDs.

This decision has overturned two High Court findings that indirect purchases of cartelised products outside of the European Economic Area (EEA) do not fall within the territorial scope of EU antitrust law.

The final outcome of these two claims will be of great interest to both claimants and defendants. Continue Reading

UK Supreme Court: NOM Clauses Invalidate Oral Variations of Contracts

Posted in Dispute Resolution

Judgment confirms the effectiveness of contractual provisions that prevent the parties from varying their contract orally.

By Oliver E. Browne and Robert Price

The Supreme Court of the United Kingdom recently held that an oral variation of a contract was invalid due to a No Oral Modification (NOM) clause contained in the contract. This clause required any variations to be provided in writing and signed on behalf of both parties. The judgment, which was handed down on 16 May 2018, cements the effectiveness and importance of NOM clauses for the foreseeable future.


MWB Business Exchange Centers Ltd (MWB) operated serviced offices in central London. Rock Advertising Ltd (Rock) entered into a contractual license with MWB to occupy office space. Their contract contained an NOM clause as follows: “All variations to this Licence must be agreed, set out in writing and signed on behalf of both parties before they take effect.” Continue Reading

UK Fair and Effective Markets Review Progress Report — A One-Stop Shop

Posted in Finance and Capital Markets

FEMR progress report commends the efforts of firms to drive higher market standards

By Rob Moulton and Katy Sanders

HM Treasury (HMT), Bank of England (BoE), and the Financial Conduct Authority (FCA) have issued a progress report in relation to the Fair and Effective Markets Review (FEMR). The progress report follows almost three years after the final FEMR report and recommendations were published, in an attempt to restore trust in the Fixed Income, Currency, and Commodities (FICC) markets after the attempted manipulation of LIBOR.

Whilst the progress report does not identify any new initiatives, it nonetheless provides a good summary of the work firms and authorities have undertaken and development to date across the following four areas:

  • Strengthening individual accountability
  • Improving market standards
  • Embedding a forward-looking approach to FICC markets
  • Strengthening benchmarks

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