The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | November 13, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | November 7, 2008
The Emergency Economic Stabilization Act was signed into law by President Bush on October 3, 2008. Included in the Act is new Internal Revenue Code Section 457A, which is intended to end the deferral of compensation payable to managers of offshore hedge funds under a nonqualified deferred compensation plan.
Client Alert | October 30, 2008
Many companies originally granted stock options to provide an incentive to employees to remain with the company and to enable them to share in the stockholder value that they help create. The recent prolonged and widespread stock market downturn has increased pressure on these companies to develop an effective strategy to provide stock compensation to employees and other service providers who feel as if all they have are worthless options and to use limited stock plan share reserves more effectively. The last broad market downturn in 2001 ushered in the first large-scale response to underwater options. The legal environment and the degree of oversight of large institutional investors and their advisory services have both changed greatly since that time. Gibson Dunn�
Client Alert | October 27, 2008
On October 16, 2008, the IRS released the inflation-adjusted limitations applicable to tax-qualified retirement plans for 2009. The increases are pursuant to inflation adjustment factors included in the applicable sections of the Internal Revenue Code.
Client Alert | October 23, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | October 23, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | October 23, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | October 21, 2008
Many of our clients have been facing unprecedented new challenges as a result of the dramatic economic events that have occurred over the last month. The financial markets continue to evolve in Washington on a real-time basis and the daily volatile gyrations in the stock markets around the world have led to uncertainty, anxiety and issues of first impression for many of our clients. We believe that the events that occur in the coming months will shape not only the financial futures of many of our clients and their competitors, but also the world economy.
Client Alert | October 20, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | October 20, 2008
On October 14, 2008, RiskMetrics Group – ISS Governance Services ("ISS"), a leading proxy advisory firm, announced the opening of the comment period for its proposed 2009 proxy voting policies. ISS is accepting comments on the proposed policy updates through October 31, 2008. It expects to release the final U.S.
Client Alert | October 17, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | October 14, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | October 9, 2008
With the Emergency Economic Stabilization Act (EESA) now law, Treasury is moving quickly to choose advisers, issue regulations, and hire companies to serve as asset managers for the Troubled Asset Relief Program (TARP).Today, Secretary Paulson announced that he has selected Neel Kashkari to be the interim head of the new Office of Financial Stability, which will implement the Troubled Asset Relief Program. Kashkari is currently Assistant Secretary for International Economics and Development and has been a key adviser to Secretary Paulson. It is our understanding that Secretary Paulson intends to hire a small staff with expertise in asset management, accounting, and legal issues to commence the Troubled Asset Relief Program.
Client Alert | October 6, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | October 3, 2008
We are pleased to provide our clients and friends with a section-by-section analysis of the Emergency Economic Stabilization Act of 2008 (hereinafter, the "Act") as passed by the Senate, by a vote of 74-25, on October 2, 2008.
Client Alert | October 2, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | September 30, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.What follows is our latest in a series of updates on key regulatory and legislative issues.Bipartisan RejectionLawmakers labored over the weekend to craft a financial package that would be palatable to both Democrats and Republicans, as well as to constituents back home. Draft legislation was circulated and tinkered with all weekend until the House Rules Committee, at 12:01 a.m.
Client Alert | September 29, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.What follows is our latest in a series of updates on key regulatory and legislative issues.Debate on the HillIn contrast to yesterday's public display of political and policy wrangling, today's activity was largely behind the scenes as designated negotiators worked to hash out the details of a rescue plan. Though congressional leaders reported yesterday that they had reached a compromise agreement, Republicans announced that they had developed a competing proposal late Thursday night. House Minority Leader John Boehner wrote Speaker Pelosi today to express concern that the Democra
Client Alert | September 26, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking government responses to the turmoil that has reshaped our capital and credit markets. The following is an update on key regulatory and legislative issues that are of particular interest to and are likely to affect hedge funds and private equity funds.Federal Reserve Board Enhances Passive Investment Framework for Minority Investors in Bank Holding Companies and BanksIn connection with its various efforts to increase the capital and liquidity available to the banking industry, on September 22, 2008 the Federal Reserve Board (the "Fed") issued a new policy statement providing additional guidance on making equity investments in a bank or bank holding company ("BHC"). Importantly, the iss
Client Alert | September 26, 2008
The Gibson, Dunn & Crutcher Financial Markets Crisis Group is tracking closely government responses to the turmoil that has catalyzed dramatic and rapid reshaping of our capital and credit markets.
Client Alert | September 25, 2008
Los Angeles partner Michael Farhang is the author of "Stock Option Backdating and the Independent Director: An Analysis of Litigation Trends" [PDF] published in the September 2008 issue of BNA's Executive Compensation Library on the Web.
Client Alert | September 8, 2008
With the continued spotlight on executive compensation, and with companies in the mortgage and finance industries facing ongoing challenges in the months ahead, the subject of recouping, or "clawing back," executive compensation in the event of financial statement errors is likely to remain a focal point for boards of directors. Moreover, in the past several years, institutional shareholders and governance activists have focused on clawback provisions as a significant corporate governance and executive compensation issue.
Client Alert | July 9, 2008
This spring, Washington, D.C. became the second municipality in the country to require employers to provide paid sick leave for employees.
Client Alert | June 30, 2008
The "good faith" transition period for compliance with Section 409A of the Internal Revenue Code expires on December 31, 2008, and the final Section 409A regulations become fully effective on January 1, 2009.
Client Alert | June 26, 2008
Today, the Supreme Court issued two important opinions interpreting the Age Discrimination in Employment Act (“ADEA”). In Meacham v. Knolls Atomic Power Laboratory, aka KAPL, Inc., et al., the Supreme Court resolved an emerging split among the U.S.
Client Alert | June 19, 2008
Recent turmoil in the mortgage and credit markets, and the resultant difficulties at a number of large financial institutions, have once again led some to ask the question: “Where was the board of directors?” Those raising this question have inquired about the nature and extent of the board’s involvement in overseeing the risks associated with sub-prime lending and other activities at these institutions. It is generally understood that the appropriate role of the board of directors is one of diligent oversight, and that directors cannot, and should not, be involved in the day-to-day operation of a company’s business. Recent events, however, have underscored that serving on a public company board of directors in the 21st century involves more than simply attending
Client Alert | May 1, 2008
The Supreme Court's decision last week in LaRue v. DeWolff, Boberg & Associates, No. 06-856, slip op. (U.S. 2008), addressed the first of several issues that have divided the courts in ERISA "stock drop" cases, which concern losses to company 401(k) plans resulting from downturns in the company's stock.The defendant employer in the case, DeWolff, maintained a 401(k) plan in which plaintiff LaRue had been a participant.
Client Alert | February 25, 2008
In reliance on the IRS's view as expressed in private letter rulings in 1999 and 2006, many public companies have taken the position that amounts can qualify as “performance-based compensation” under section 162(m) of the Internal Revenue Code if the amounts are payable in connection with an executive’s termination of employment without “cause” or for “good reason” regardless of whether the performance goals have been satisfied. However, in a controversial private letter ruling issued in late January, the IRS reversed its longstanding position that such provisions are permissible in performance-based arrangements, thereby calling into question deductions that many companies have taken in prior years and the attendant financial reporting, as well as the deductibility of
Client Alert | February 22, 2008
Washington, D.C. Partner Michael Collins co-authored "Internal Revenue Code Section 409A: Ten Traps for the Unwary", [PDF] which has been published in several BNA publications, including the January 8, 2008 Pension & Benefits Reporter.
Client Alert | January 8, 2008
On December 3 the Internal Revenue Service issued Notice 2007-100, which provides a limited voluntary correction program for certain operational violations of Section 409A of the Internal Revenue Code.
Client Alert | December 5, 2007
As another year comes to a close, employers must take a number of actions to (i) address Section 409A of the Internal Revenue Code for deferred compensation plans, (ii) comply with the Labor Department's "qualified default investment alternative" ("QDIA") fiduciary safe harbor for defined contribution retirement plans, and (iii) begin operating their qualified retirement plans in compliance with new rules that become effective on January 1, 2008.
Client Alert | December 4, 2007
On October 23, the Labor Department issued final regulations setting forth the standards applicable to qualified default investment alternatives ("QDIAs").
Client Alert | October 24, 2007
On October 22, the IRS issued Notice 2007-86, which extends to December 31, 2008 most of the transition relief under Section 409A of the Internal Revenue Code.
Client Alert | October 23, 2007
On October 18, the IRS released the inflation-adjusted limitations applicable to tax-qualified retirement plans for 2008. The increases are pursuant to inflation adjustment factors included in the applicable sections of the Internal Revenue Code. The limits are adjusted only in specified increments and, as a result, some of the key limits are unchanged from 2007.The key 2008 limits are as follows: Limitation 2008 Limit 2007 Limit 402(g) Limit on Employee Elective Deferrals (Note: This is relevant for "401(k)," "403(b)" and "457" plans.)$15,500 (unchanged)$15,500414(v) Limit on "Catch-Up Contributions" for Employees Age 50 and Older (Note: This is relevant for "401(k)," "403(b)" and "457" pl
Client Alert | October 19, 2007
On September 10, the IRS issued Notice 2007-78, which provides limited relief from the December 31, 2007 deadline to amend arrangements subject to Section 409A of the Internal Revenue Code.
Client Alert | September 11, 2007
On July 20, the Delaware Chancery Court issued an important decision awarding damages to holders of "out-of-the-money" stock options that were cancelled in connection with a corporate merger.
Client Alert | August 15, 2007
On June 4, the IRS issued guidance clarifying which executive officers are "covered employees" for purposes of the $1 million deduction limitation under section 162(m) of the Internal Revenue Code.
Client Alert | June 8, 2007
On April 10, the IRS issued final regulations interpreting the rules and standards under Section 409A of the Internal Revenue Code ("Section 409A"). Our client memorandum of April 11 summarizes key provisions of the regulations. Section 409A provides various rules that "deferred compensation" must satisfy in order to avoid unfavorable tax treatment of employees, directors and other service providers, including immediate income tax, a 20% penalty tax, and an interest charge. In addition, some states (including California) have implemented similar rules, and deferred compensation payments that do not comply with Section 409A can be taxed at marginal rates exceeding 75%.The sweep of Section 409A is extremely broad, and reaches far beyond traditional nonqu
Client Alert | April 26, 2007
On April 5, the IRS issued final regulations under Section 415 of the Internal Revenue Code (“Code”). Section 415(c) of the Code generally limits the amount of annual contributions to a tax-qualified defined contribution plan on behalf of a participant to the lesser of 100% of compensation or $40,000 (adjusted for inflation; currently $45,000).
Client Alert | April 16, 2007
On April 10, the IRS issued long-awaited and often-delayed final regulations ("Regulations") interpreting the deferred compensation rules under Section 409A of the Internal Revenue Code ("Section 409A").
Client Alert | April 11, 2007
On February 8, the IRS Released Announcement 2007-18. Pursuant to the Announcement, employers may take advantage of a special settlement program (the "Program") to address the payment of additional taxes arising under Section 409A of the Internal Revenue Code as a result of an employee's exercise of a "discount" stock option or stock appreciation right in 2006.
Client Alert | February 9, 2007
A recent decision of the U.S. Court of Appeals for the Fifth Circuit has addressed one of the most important issues in the recent wave of ERISA fiduciary breach “stock drop” litigation.
Client Alert | February 5, 2007
RevisedYesterday, the Division of Corporation Finance (“Staff”) at the Securities and Exchange Commission issued 18 pages of interpretations on its new executive and director compensation disclosure rules, which are applicable for 2007 proxy filings by companies with fiscal years ending on or after December 15, 2006.
Client Alert | January 25, 2007
On January 17, the Senate Finance Committee unanimously approved the Small Business and Work Opportunity Act of 2007 (the "Act"). The Act includes a number of tax breaks for small businesses in connection with the proposed increase in the minimum wage.
Client Alert | January 18, 2007
As another year comes to a close, employers must take a number of actions to (i) address Section 409A of the Internal Revenue Code, (ii) amend their tax-qualified retirement plans to reflect certain rules that became effective in 2006, and (iii) begin operating their plans in compliance with new rules that become effective on January 1, 2007.
Client Alert | December 7, 2006
Decision has significant implications for option backdating litigationIn a significant decision issued on November 6, 2006, the Delaware Supreme Court ruled on the standard to be applied under Delaware law when assessing the personal liability of corporate directors for failing to adequately oversee the corporation.
Client Alert | November 8, 2006
Over the last year or so there has been an increasing number of corporate investigations into alleged stock option backdating activities led primarily by the SEC, the DOJ and the FBI.
Client Alert | October 26, 2006
On October 18, 2006, the U.S. Securities and Exchange Commission unanimously approved changes to the tender offer best-price rules set forth in Exchange Act Rules 14d-10(a)(2) and 13e-4(f)(8)(ii).
Client Alert | October 24, 2006
On October 4, the IRS issued long-expected guidance extending the transition relief under Section 409A of the Internal Revenue Code (the "Code"). As described below, subject to an exception for certain "in the money" stock options granted to Section 16 officers and directors of publicly-traded companies, Notice 2006-79 generally extends the key transition rules through December 31, 2007.Effective Date/Good Faith Reliance.
Client Alert | October 5, 2006