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Yahoo Formally Rejects Microsoft Offer
Venture Business News |
2008/02/11 08:16
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Yahoo Inc. spurned Microsoft Corp.'s $44.6 billion takeover bid as inadequate Monday, betting that it can elicit a higher offer from the world's largest software maker or find another way to deliver a comparable payoff to its shareholders.
The rebuff by the slumping Internet pioneer had been widely anticipated after word of Yahoo's intention was leaked during the weekend. In its formal response, Yahoo said its board had concluded Microsoft's unsolicited offer "substantially undervalues" the Sunnyvale-based company. Yahoo indicated it could be lured to the negotiating table if Microsoft ups the ante, without mentioning the price it has in mind. "The board of directors is continually evaluating all of its strategic options in the context of the rapidly evolving industry environment and we remain committed to pursuing initiatives that maximize value for all stockholders," Yahoo said in a statement. Investors appeared confident that Microsoft wants Yahoo badly enough to raise the stakes. Yahoo shares rose 25 cents to $29.45 in Monday's morning trading while Microsoft shares fell 48 cents to $28.08. Yahoo's stock price had dropped by more than 40 percent in the three months leading to Microsoft's bid, valued at $31 per share when it was announced Feb. 1. The offer was 62 percent above Yahoo's market value at the time. Many analysts believe Redmond, Wash.-based Microsoft will eventually raise its bid to $35 to $40 per share, sweetening the pot by $5 billion to $12 billion in an effort to negotiate an amicable sale. Microsoft was prepared to pay at least $40 per share for Yahoo a year ago, according to a person familiar with the talks between the two companies a year ago. Yahoo wasn't interested then because it was confident in its own strategy, said the person, who didn't want to be identified because Microsoft's 2007 offer was never publicly disclosed. But a higher bid now could hurt Microsoft's own stock price, which has been slipping amid concerns that a Yahoo takeover could be more trouble than its worth. Microsoft's market value has plunged by more than $40 billion, or 14 percent, since the bid was made public. Microsoft representatives didn't immediately respond to requests for comment Monday morning. |
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U.S. to seek death penalty against 9/11 planner
Breaking Legal News |
2008/02/11 06:16
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The Pentagon is planning to charge six detainees at Guantanamo Bay for the Sept. 11 terror attacks on America and seek the death penalty. Defense Department spokesman Bryan Whitman said an announcement of the charges could come Monday.
U.S. military prosecutors will file charges on Monday against the alleged mastermind of the Sept. 11 attacks and five other Guantanamo prisoners and will seek to execute them if they are convicted, officials involved in the process said.
The charges against former al Qaeda operations chief Khalid Sheikh Mohammed and five other captives will be announced in an 11 a.m. EST (1600 GMT) news conference at the Pentagon. They will be the first charges from the Guantanamo war court alleging direct involvement in the attacks and the first involving the death penalty. |
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Lawyer accused of way-too-firm handshake
Court Watch |
2008/02/11 05:28
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A lawyer who allegedly shook a legal opponent's hand so fiercely she injured her shoulder is now facing physical assault charges in Florida.
An attorney for private lawyer Brewer Rentas said her client never intended to harm a federal prosecutor in Fort Lauderdale, Fla., when they shook hands last week, the South Florida Sun-Sentinel reported.
"It all stems from a handshake," attorney Gwendolyn Tuggle said. "In her mind she never intended to cause any harm to any federal official."
The 49-year-old Rentas had been in court Thursday as part of her husband's trial on cocaine distribution charges and the attorney reportedly made a point of shaking hands with Assistant U.S. Attorney Jennifer Keene after the court's ruling.
Rentas' arrest report states she then allegedly grabbed Keene's hand, knocking her off balance, and then roughly shook her arm up and down.
The Sun-Sentinel said Rentas is now facing a federal misdemeanor charge over the incident and will likely face an attorney conduct review, as well. |
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Microsoft-Yahoo: The Lawyer’s Edition!
Mergers & Acquisitions |
2008/02/11 04:26
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There’s nothing the Law Blog enjoys more than a big news story told through the prism of the lawyers. (Is there a better way?) So nothing could’ve pleased us more than today’s curtain-raiser in the Legal Times on the behind-the-scenes wrangling of the antitrust and deal lawyers squaring off in Microsoft’s $44.6 billion bid for Yahoo. The latest, according to the WSJ: Yahoo has formally rejected Microsoft’s bid, saying it “substantially undervalues” Yahoo. But Yahoo is leaving the door open for further negotiations. The Antitrust Argument, David vs. Goliath or Goliath vs. Goliath? Charles “Rick” Rule may sound like the name of a WWF wrestler, but he’s actually Cadwalader’s D.C.-based chairman and Microsoft’s go-to antitrust counsel. Rule will likely need all his best moves as he fights a two-front antitrust battle. First, he might have to convince the American Antitrust Institute, among others, that a Microsoft-Yahoo combination, despite its daunting size, is necessary in order to create a viable competitor to Google. Second, Rule will likley have to square off against Google lawyer-in-chief David Drummond, who’s trying to shoot down Microsoft’s economies-of-scale pitch. Working with Drummond are Cleary Gottlieb’s David Gelfand and Wilson Sonsini’s Susan Creighton, the two D.C.-based lawyers who last year helped Google usher its Doubleclick deal through the FTC. Is a Poison Pill in the Offing? Simpson Thacher’s New York-based team of Charles “Casey” Cogut, Kathryn King Sudol and Alan Klein might have helped Microsoft launch a bid for Yahoo that, suggests Legal Times, is just high enough so that shareholders can’t afford to say no. That leaves the Yahoo board –represented by Skadden’s Palo Alto-based Kenton King — with one option if it doesn’t want to sell: make Yahoo as unattractive as possible. That, according to the LT, means either a white knight or a poison pill. The pill, also known as a shareholder rights plan, was reportedly put in place by the Yahoo board in 2001. Under the provision, once another company buys 15% of Yahoo’s shares, other shareholders would be able to purchase stock at half-price, which would make the deal more expensive. |
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Have 2 firms? Make sure they relate
Practice Focuses |
2008/02/11 03:24
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For some entrepreneurs, opportunity knocks again and again.
While practicing corporate real estate law at Jenner & Block, Jennifer Sara Levin saw an opportunity to make a difference in the lives of other professionals by sharing what she had learned about building a client base.
So she launched a business-relationship consulting firm, NateandDot.com, in January 2006 and left the law firm seven months later to focus on it. Last year, the self-described multitasker launched a concurrent business, Legal Intelligence, an online platform connecting law school students with top-tier firms, in part by applying what she had learned about recruiting at major law firms.
Many people have asked Levin how she juggles both start-ups.
"I'm one of those people who is significantly more efficient when I'm busy," she said. "I try to stack my days for efficiency."
She schedules several downtown meetings on the same day, works nights as needed and relies heavily on communicating via her BlackBerry, Levin said.
While unusual, it's not unheard of for business owners to run two enterprises simultaneously, experts said. The phenomenon occurs most often when entrepreneurs see an opening in the marketplace that is somehow related to their first business and go for it.
They are more likely to succeed when the second business is strategic and not just opportunistic, said Linda Darragh, director of entrepreneurship programs at the University of Chicago.
"Look for a strategic link and a reason they fit together," she said.
For example, Darragh said, a holding company with three separate enterprises all supporting the restaurant industry, offering management, financing and data-processing services, could be effective.
"They link together in terms of cross-selling and some systems," she said.
But with no synergy, managing two enterprises at the same time could be a recipe for disaster, Darragh said, because most entrepreneurs are limited in time and money.
"If you're dividing your resources between two companies, you may be jeopardizing both at the same time," she said.
Levin's two companies have target markets with some overlap and share many core competencies, she said. She researched emotional intelligence and hired an industrial psychologist and cognitive behaviorist to learn the best way to teach networking and communication skills, which apply to both businesses, she said.
Client Sherwin Brook of Chicago accounting firm BrookWeiner said Levin did a stellar job developing a seminar for its young professionals on developing contacts and client relationships. The niche Levin has carved out has great potential, he said, because it is largely overlooked.
Pilot at Northwestern
Levin is just gearing up a pilot program for Legal Intelligence LLC, involving three law firms and her alma mater, Northwestern University School of Law, that will run online at http://www.legalintelllc.com from May 15 to Oct. 15. The idea is to help students find the law firm that fits them best, partly through online video conferences.
"It's like a Match.com for law students," Levin said of her second start-up.
Law firms pay to participate, Levin said, because they want to find law school graduates who aren't just qualified but who also share their firm's values. Often, Levin said, top-tier law firms end up with graduates who don't fit their culture.
"There's no way to do it in a 20-minute interview. You can't get enough information to know if this person is the right cultural fit," she said.
Still, growing two companies at once can be difficult, especially if investors react with skepticism, said Scott Meadow, professor at the University of Chicago Graduate School of Business.
"Unless I had Steve Jobs for both companies, I doubt I would consider backing someone who was working on two different deals," Meadow said.
So what should entrepreneurs do when they are enticed by a new opportunity? Before launching a new business, Meadow said, "you ought to sell that first one, get that off your mind. Then turn to something else." If you make money on the first enterprise, the second one will be that much easier to fund, he said.
Jay Goltz, president of the $15 million-plus Goltz Group, runs three separate operations, with design as the common thread.
He started Artists' Frame Service in 1978, then opened Jayson Home & Garden, a combined home and garden furnishings store, in 1996, in part to give Artists' Frame Service customers a place to shop while their art was being framed. Meantime, his 15-year-old Chicago Art Source aims to tap the corporate market.
"It always started from seeing an unfulfilled need in the marketplace and thinking I could do that better," he said.
Goltz said each time he came up with the new business concept, he thought it would be easy to make it work.
"I tend to jump into the deep end and figure it out later," he said.
Leaps sometimes painful
The process is sometimes painful. He faced several learning curves before he began to identify important differences among the three operations and adapt accordingly, he said.
"The same thing that can be a great asset also can be a liability," Goltz said.
Jayson Home & Garden has seasonal inventory challenges that Artists' Frame Service doesn't have. And Chicago Art Source requires a different type of sales representative than the two retail operations need.
"It has to be someone who understands the corporate market," said Goltz, who employs 115 workers.
Goltz also made some mistakes. For example, he tried opening another business that sold wholesale frames to large department stores, but differences in the market, receivables and inventory proved too great.
He closed it six months after its launch, he said.
Still, Goltz embraces the concept of leveraging core competencies to pursue new business.
"Some people say to stick to the knitting, but if you just stick to the knitting, that would leave enormous opportunities," he said.
Today, Goltz's three operations are successful, he said, because he has the right people in place to manage them.
"It's about finding talent and developing it," he said. "I have less stress today than I've ever had because I have hired key people to run these businesses, and they are doing a good job." |
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Some of Saudi prince's assets frozen in US
Breaking Legal News |
2008/02/11 03:17
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| A federal judge this week ordered frozen some of the assets in the United States of Prince Bandar, former Saudi ambassador to Washington, who has been hit by a lawsuit by BAE Systems shareholders, a court source said Sunday. The British defense group since June has been the subject of a criminal investigation in the United States of possible anti-corruption law violations related to its activities in Saudi Arabia. Britain's Serious Fraud Office announced in 2006 that it was halting an investigation into claims that BAE Systems set up a slush fund for some members of the Saudi royal family during the giant 1980s Al-Yamamah deal. Press reports said BAE paid two billion dollars in bribes to the prince with staggered payments, a furnished Airbus A340 and a honeymoon for his daughter. BAE has not denied the payments and in September US shareholders saying they had been injured filed suit against BAE executives and Prince Bandar. Plaintiffs, after learning Bandar might sell some of his US properties, asked authorities to ensure that profits from any such sales were not allowed to leave the country. In a decision announced Tuesday Judge Rosemary Collyer, who is handling the case in a Washington federal court, granted their request. The prince can sell his properties as he likes but the product of any sale would remain in a US account in his name, she ordered. |
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Class actions feel effects of Milberg case
Law Center |
2008/02/11 02:24
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As famed class-action lawyer William S. Lerach steps before a federal judge in Los Angeles today to learn his sentence in a wide-ranging fraud and conspiracy probe, his misdeeds and those of former colleagues may be helping to alter the way securities law is practiced.
The number of class actions filed on behalf of disgruntled investors has been dropping, and legal experts say that is partly because practitioners are distancing themselves from the aggressive tactics that made Lerach, 61, and his former partners courtroom legends and lightning rods for critics of the civil justice system.
In some instances, judges have balked at certifying class actions they have deemed frivolous and in others have rejected settlements for paying attorneys at the expense of plaintiffs, sometimes citing the ongoing prosecution of Lerach's former firm, once known as Milberg Weiss Bershad & Schulman.
Lerach left in 2004 to found a San Diego class-action practice now called Coughlin Stoia Geller Rudman & Robbins. Lerach resigned from that firm in October, days before he pleaded guilty to one count of conspiracy.
"What you're watching is a bit of a transition from a world in which class-action practice did have some disreputable aspects to a different model that's much more responsible, publicly oriented and closely regulated," said Stephen Bundy, who teaches law at Boalt Hall, at UC Berkeley.
Lerach's trademark vitriol -- he famously threatened to "destroy" companies that balked at settling -- and his fondness for television cameras may belong to the past. Lawyers who now dominate the field are far less confrontational, Bundy said, and their resumes resemble those of their big-firm opponents.
Several factors may explain the drop in securities class-action filings from the peak years of 2000 to 2004, including, until recently, rising stock prices.
Bundy said, though, that the decline also reflects an evolution from "smaller, informal and slightly shady firms" to more mainstream law practitioners.
Federal rules helped push the change.
Until 1995, the first law firm to file suit could direct the class action and reap the largest legal fees. The rules favored firms with a stable of ready-made plaintiffs: people with a few shares in many companies who were willing to immediately lend their name to litigation. That year, Congress changed the law so the lead law firm should be one that represents the plaintiff with the most significant holdings at risk.
These days, state pension funds and other institutional investors are the major plaintiffs in shareholder suits. Such big-money investors are reluctant to discuss their legal strategies, but litigation watchers contend that they are choosing their lawyers more carefully -- examining a firm's ethical record, for example, and even its campaign contributions.
"There's heightened concern," said San Francisco lawyer Richard Heimann, who represents plaintiffs in securities class actions. Fund managers who have approached him want reassurance "that there weren't any skeletons in our closet," he said, often asking for written declarations from prospective lawyers that they have not been indicted or disciplined by the bar.
The Milberg Weiss prosecutions also are likely to make lawyers more careful, said Stephen Gillers, who teaches legal ethics at the New York University School of Law.
"It has to worry them even if they're doing nothing wrong because the Justice Department has shown its willingness to look into how they do business," he said.
Some institutional investors have opted out of class actions in recent years, believing they would do better on their own, Heimann said.
His firm represented Merrill Lynch in a securities class action against McKesson HBOC a couple of years ago. Class members ultimately recovered 15% of their losses in that case, he said, but Merrill Lynch recouped $150 million -- more than its monetary loss -- by opting out of the class and settling with McKesson separately.
Heimann also helped settle a case last year in which two Alaska public funds recovered 90% of their economic losses by bowing out of the class. It was many times more than they would have gotten if they'd remained in, he said.
Some legal experts say the Milberg Weiss probe also has prompted judges to more closely monitor these cases, particularly those involving that firm or Coughlin Stoia.
Federal rules require judges to ensure that class-action settlements are fair and adequate for individual plaintiffs.
Noting those rules, several companies targeted by Milberg Weiss or Lerach's former firm have asked judges within the last year to refuse class-action status, citing the firm's indictment or Lerach's guilty plea. The motions have met with mixed results.
Lawyers split on whether the case is casting a shadow beyond the two law firms.
New York plaintiffs' lawyer Sean Coffey sees no evidence that judges are scrutinizing settlements or fee requests from other firms more closely. But a Los Angeles defense attorney said that since the prosecution, he has been called into the judge's chambers to justify the legal fees in the case and how much money class members will get.
Those settlement agreements "used to be accepted more readily," said the lawyer, who requested anonymity out of concern that pending settlements might be jeopardized. "Now they make you really explain."
Until his guilty plea in October, the pugnacious, Brillo-haired Lerach was one of the most feared lawyers in the nation, boasting of having wrung billions over the years for investors from Enron Corp., WorldCom and Intel Corp. and a roster of blue-chip corporations.
Many clients and consumer groups credit Lerach with defending them against what he called the "dishonorable and despicable greed" of corporate America. Corporate executives denounced the lawsuits as extortion but usually chose to settle rather than roll the dice at trial, paying out millions to plaintiffs.
Two former partners at Milberg Weiss -- David Bershad and Steven Schulman -- also have pleaded guilty to fraud charges as part of an alleged scheme to pay $11.4 million in illegal kickbacks to clients who agreed to serve as ready-made plaintiffs in class actions. The two men await sentencing for their roles in the conspiracy which, prosecutors allege, earned the firm $250 million in fees from dozens of cases stretching back more than 20 years.
The law firm and co-founder Melvyn Weiss have pleaded not guilty, but the probe has triggered an exodus of lawyers and clients. A trial is scheduled for August.
John Beisner, a Washington lawyer who faced Lerach in a number of fraud suits, said the case marked a milestone. The guilty pleas, he said, have sidelined "some of the great lions of the plaintiffs bar." |
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Class action or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued. This form of collective lawsuit originated in the United States and is still predominantly a U.S. phenomenon, at least the U.S. variant of it. In the United States federal courts, class actions are governed by Federal Rules of Civil Procedure Rule. Since 1938, many states have adopted rules similar to the FRCP. However, some states like California have civil procedure systems which deviate significantly from the federal rules; the California Codes provide for four separate types of class actions. As a result, there are two separate treatises devoted solely to the complex topic of California class actions. Some states, such as Virginia, do not provide for any class actions, while others, such as New York, limit the types of claims that may be brought as class actions. They can construct your law firm a brand new website, lawyer website templates and help you redesign your existing law firm site to secure your place in the internet. |
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