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Upcoming Boston IE Club Panel at Venture Cafe 03/05/2015

Posted by Morse, Barnes-Brown Pendleton in Corporate, Events, Legal Developments, New Resources, Public Companies.
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2015-03-03_10-20-57On Wednesday March 11, 2015, Innovation & Enterprise Business Club (The IE Club) will host an event entitled “Successful Partnerships Between Large And Small Companies Building Great Success With… Very Different Teams Working Together: How To Make It Work”. The panel will feature several CEOs of small companies sharing their views of company best practices, as well as practices to avoid (internet/enablers/innovative services). This event will be held at the Venture Cafe at the Cambridge Innovation Center from 5:30 pm – 8:00 pm, and is complimentary.


David Feinberg, Esq. Feinberg Hanson LLP


Robert Kalocsai, Founder, Software Continuity
Bernard Haurie, General Manager, Geopost
Ann Halford, Executive Director of Digital Technology, Boston University
Daniel Behr, CEO at Slips Technologies


MBBP’s Robert M. Finkel is a board member of IE Club of Boston. To learn more or to register for the event, please visit The IE Club.

Insights on Corporate Venture Capital 03/04/2015

Posted by Morse, Barnes-Brown Pendleton in Corporate, Legal Developments, New Resources, Public Companies, Venture Capital & Private Equity.
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Corporate Attorney Scott BleierLast week, MBBP’s Scott Bleier attended a panel discussion hosted by the Johnson & Johnson Boston Innovation Center, which featured three corporate venture capitalists from Sanofi-Genzyme Bioventures, Boehringer Ingelheim Venture USA Inc. and Johnson & Johnson Development Corp.  In a very informative and candid discussion, the panelists shared the investment philosophies behind their companies’ CVC funds, what issues they consider when making an investment and their insights for start-ups seeking access to CVC funding.  The panel revealed several points of apparent consensus in the CVC community while also highlighting a divergence of philosophical approach in certain important areas.

To learn more about the panel discussion regarding CVC funds, please visit our VCs and Start-Ups blog.

Forging Successful Strategic Alliances for Life Sciences Companies 02/25/2015

Posted by Morse, Barnes-Brown Pendleton in Corporate, Licensing & Strategic Alliances, Life Sciences, M&A, New Resources, Public Companies.
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M0744200When entering into an exclusive licensing arrangement, the odds of success are against most companies. Typically within the first twelve months of an arrangement, 2/3 of all alliances crumble.  If these ventures are so prone to failure, what preventative measures can a company employ to ensure success?

To learn how to achieve success when entering an alliance, read John Hession’s full article.

Reminder: Schedule 13G Amendments and Forms 5 due February 17, 2015 02/05/2015

Posted by Morse, Barnes-Brown Pendleton in Corporate, Legal Developments, New Resources, Public Companies.
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Corporate Attorney Daniele Ouellette LevyBy: Daniele Ouellette Levy

Significant stockholders of public companies have ongoing reporting obligations under Sections 13 and 16 of the ’34 Act.

  • Beneficial owners of greater than 5% of a registered class of stock of a public company must disclose their ownership by filing a Schedule 13D. Certain stockholders may instead file the abbreviated Schedule 13G provided their ownership does not exceed 20% and they meet certain other requirements.
  • Owners of greater than 10% of a registered class of stock of a public company must disclose all transactions in company securities under Section 16 within two business days of the transaction. Reporting of certain transactions – such as gifts – may be delayed until the end of each calendar year and reported on Form 5.

Amendments to Schedule 13G and Forms 5 are due on February 17, 2015 (45 days after the end of the calendar year, plus a few extra days due to the President’s Day holiday).  These filings are required in order to disclose any changes in ownership during the past year or any transactions in company securities during the past year which were not previously disclosed.

Keep in mind that while changes in ownership may result from actions at the company level – such as option vesting or option grants – the obligation to make these filings is the responsibility of the individual stockholder.

For help determining whether you are required to submit a filing please contact Daniele Levy.

Action Item for Smaller Reporting Companies – Update Review of Internal Controls to COSO 2013 01/29/2015

Posted by Morse, Barnes-Brown Pendleton in Corporate, Legal Developments, New Resources, Public Companies.
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Corporate Attorney Daniele Ouellette LevyBy: Daniele Ouellette Levy 

In response to the requirements of SOX 404, a majority of public companies adopted the 1992 framework prepare by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to assess the design and effectiveness of their internal controls over financial reporting.  Effective as of December 14, 2014, COSO no longer makes the 1992 framework available and encourages public companies to transition to its revised framework – COSO 2013.

Public companies are required, on an annual basis, to evaluate the effectiveness of their internal controls over financial reporting and to disclose in their 10-K the results of such evaluation and the framework used to make such evaluation.  Public companies must also disclose any material changes to internal controls – for example changes resulting from a transition to COSO 2013.

Companies who delay the transition to COSO 2013 face the risk of increased scrutiny by the SEC.  In a recent public meeting, the SEC staff stated “the longer issuers continue to use the 1992 framework, the more likely they are to receive questions from the staff about whether the issuer’s use of the 1992 framework satisfies the SEC’s requirement to use a suitable, recognized framework”. To avoid questions form the staff, smaller reporting companies will want to take steps to transition to COSO 2013.


For more information regarding this topic, please feel free to contact Daniele Ouellette Levy.

Court Outlines Requirements for Insider Trading Case 01/23/2015

Posted by Morse, Barnes-Brown Pendleton in Corporate, Legal Developments, New Resources, Public Companies.
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Corporate Attorney Mark TaralloBy: Mark Tarallo

In a decision dated December 10, 2014, the Second Circuit Court of Appeals clarified its position on insider trading cases where the discloser of the information committed no crime.  In US v. Newman, the Court addressed a situation where the defendants, who were several “degrees” removed from the discloser of the information, received the information without any knowledge as to the criminal liability of the discloser.  The Court ruled that since the defendants did not know that the discloser committed a crime, then the defendants cannot be guilty of a criminal act, stating in part “we find no support for the Government’s contention that knowledge of a breach of the duty of confidentiality without knowledge of the personal benefit is sufficient to impose criminal liability.”  The Court then went on to lay out a clear statement of the requirements for an insider trading case:

In sum, we hold that to sustain an insider trading conviction against a tippee, the Government must prove each of the following elements beyond a reasonable doubt: (1) the corporate insider was entrusted with a fiduciary duty; (2) the corporate insider breached his fiduciary duty by (a) disclosing confidential information to a tippee (b) in exchange for a personal benefit; (3) the tippee knew of the tipper’s breach, that is, he knew the information was confidential and divulged for personal benefit; and (4) the tippee still used that information to trade in a security or tip another individual for personal benefit.

The Court reversed the lower court’s guilty finding, and ordered a finding of not guilty.  In addition to clearly setting out the standards for an insider trading case, the case serves as a reminder to all public companies that they should incorporate robust protections to ensure against even the inadvertent disclosure of confidential, non-public information.


For more information regarding this topic, please feel free to contact Mark Tarallo.

Massachusetts Lawyers Weekly Seeks Carl Barnes Opinion in Matter of Control of Attorney-Client Privilege 01/21/2015

Posted by Morse, Barnes-Brown Pendleton in Attorney News, Corporate, Legal Developments, M&A, MBBP news, Public Companies.
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Corporate Attorney Carl Barnes

MBBP Partner Carl Barnes was recently quoted in a Massachusetts Lawyers Weekly article written by Patrick Murphy, entitled “Survivor of Merger Controls Attorney-Client Privilege.” The article discusses Novack v. Raytheon, a recent Massachusetts Superior Court decision holding that, under Delaware law and the terms of a merger agreement, control of the attorney-client privilege relating to pre-merger communications between BBN Technologies Holding Corp. and its counsel passed to the acquirer, Raytheon Company. The privilege could not, therefore, be asserted after the merger by the representative of BBN’s former shareholders. The Superior Court, applying Delaware law, simply followed the Delaware Chancery Court’s 2013 decision in Great Hill Equity IV, LP v. SIG Growth Equity Fund I, LLLP. As an M&A attorney for more than 30 years, Carl considered whether the same result would be reached under the Massachusetts Business Corporation Act. Carl stated:

Under Delaware law, the effect of a merger is the conveyance of all property, rights, privilege, powers and franchises to the surviving corporation.  On the other hand, G.L.c. 156D 11.07(a)(3) is more narrowly drawn, providing merely that the surviving entity is vested in all property owned and every contract right possessed by the entity that is merged into the survivor. There is probably more room for interpretation in Massachusetts than there is in Delaware, Barnes said.  But he said there is still a strong argument to be made under Massachusetts law that the control of the attorney-client privilege passed to the surviving corporation in a merger.It defies logic that the successor will get the property and contract rights, and nothing else.


For further analysis and practical recommendations for M&A lawyers in Massachusetts, see Carl’s own article, “Massachusetts Court (Sort of) Adopts Delaware’s Great Hill Holding Regarding the Attorney-Client Privilege in Mergers” or please feel free to contact Carl.

Our Greatest Hits of 2014! 01/21/2015

Posted by Morse, Barnes-Brown Pendleton in Corporate, Employment, Immigration, Intellectual Property, Licensing & Strategic Alliances, M&A, MBBP news, Privacy and Data Security, Public Companies, Taxation.
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From the Top Ten Issues in M&A Transactions to the Life Cycle of an IRS Audit we’re recapping the most popular articles and blogs in 2014!

Other popular articles include:

Most popular posts from our 4 blogs:

These articles, along with our newsletters and other blogs can found here.

SEC Proposes Changes to Exchange Act Registration Thresholds 01/08/2015

Posted by Morse, Barnes-Brown Pendleton in Corporate, Legal Developments, New Resources.
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Corporate Attorney Mark TaralloBy: Mark Tarallo

On December 17, 2014, the United States Securities and Exchange Commission (“SEC) issued proposed amendments to the existing rules adopted under Section 12 (g) of the Exchange Act to reflect the new, higher thresholds for registration, termination of registration and suspension of reporting that were adopted as part of the JOBS Act.    In addition, the proposed amendments would revise the definition of “held of record” in Exchange Act Rule 12g5-1, in accordance with the JOBS Act, to exclude certain securities held by persons who received them pursuant to employee compensation plans and establish a non-exclusive safe harbor for determining whether securities are “held of record” for purposes of registration under Exchange Act Section 12(g).

Whether or not an issuer has “gone public,” any issuer that meets certain tests with respect to total assets and number of shareholders is required to file a registration statement and file regular periodic reports (such as forms 10-K and 10-Q).  The proposed amendments will adopt the standards set forth in the JOBS Act-an issuer must register if, as of the last day of its last fiscal year, it (i) had greater than $10 million in assets and (ii) had greater than 2,000 holders of record (or 500 persons who are not accredited investors) of any class of its securities.  In addition, the proposed amendments will revise the rules to make them consistent with the standards for termination of registration and suspension of reporting set forth in the JOBS Act.

The proposed amendments will also address the concept of securities “held of record.” In an effort to meet the goals of the JOBS Act of increasing the ability to raise capital while lessening the administrative burden on issuers, when determining whether or not an issuer must register, the issuer may exclude from the calculation of securities “held of record” any securities that are held by persons who received them pursuant to an “employee compensation plan” in a transaction exempted from the registration requirements of Section 5 of the Securities Act.  This amendment may have a significant beneficial impact on technology companies and other issuers that grant restricted stock to all employees as a matter of course.

The SEC Release containing the full text of the proposed amendments can be found here .  The SEC is soliciting comments on the proposed amendments, and the comment period is open until March 2, 2015.

Any questions on this topic, please feel free to contact Mark Tarallo.

‘Employment’ New Year Resolutions 01/05/2015

Posted by Morse, Barnes-Brown Pendleton in Corporate, Employment, Legal Developments.
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2015-01-05_8-08-39With the new year starting up, we have put together a handful of tips to ensure your employment practices are in order.  It is time to update handbooks and policies, make sure reviews are on schedule for the year and put a “WISP” (Written Information Security Plan) into place if you haven’t already.  Ring the year in right, ensure you and your employees are working in a happier, healthier company!

To view our Top Ten Tips for 2015.

If you have any questions, please feel free to contact a member of our Employment Law Group.

MA Employees Entitled to Paid Sick Time Beginning July 2015 11/13/2014

Posted by Morse, Barnes-Brown Pendleton in Corporate, Employment, Legal Developments, New Resources.
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On November 4th, Massachusetts voters approved a ballot measure which will entitle employees to paid sick leave. As a result, a new law will go into effect July 1, 2015  and is considered one of the nation’s most generous sick leave laws. Under the new requirement, employers of eleven employees or more must provide paid sick leave. The Attorney General will enforce this law using the same procedures applicable to other state wages. Employers who fail to comply with this requirement will be subject to mandatory treble (triple) damages, attorney’s fees, and possible criminal penalties.

For more information on this topic, please see our full Employment Law Alert.

Please feel free to contact MBBP’s Employment Law Group with any questions.

Forum Selection Clauses – From MBBP’s M&A Today 10/22/2014

Posted by Morse, Barnes-Brown Pendleton in Corporate, Legal Developments, M&A.
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In City of Providence v. First Citizens Bancshares, Inc. decided in September 2014, the Delaware Court of Chancery analyzed a forum selection provision contained in a company’s by-laws and granted the defendant’s motions to dismiss.  The plaintiff, City of Providence, challenged the forum selection provision in the defendant’s by-laws, which provision selected the United States District Court for the Eastern District of North Carolina as its forum.  The defendant, First Citizens BancShares, Inc., which was headquartered in Raleigh, North Carolina, had adopted this provision on the same day that it announced that it had entered into a merger agreement to acquire another bank.   The plaintiff’s complaints (i) challenged the facial validity of the forum selection provision, asserting a breach of fiduciary duty in connection with its adoption; and (ii) asserted claims against the defendant’s board of directors with respect to the proposed merger.

Although many states have not yet addressed the issue of enforceability of forum selection provisions, given the high percentage of shareholders lawsuits which are filed in connection with M&A transactions, companies should consider amending their by-laws to provide for an appropriate forum selection provision to help reduce future potential litigation risks.   With the Delaware Court of Chancery conclusion in the City of Providence decision, other states will likely follow.

Read more on our M&A Blog.

MBBP’s Daniele Ouellette Levy to Host Office Hours at TechSandBox 09/17/2014 08/26/2014

Posted by Morse, Barnes-Brown Pendleton in Attorney News, Corporate, Events.
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Corporate Attorney Daniele Ouellette LevyOn September 17, MBBP Attorney Daniele Ouellette Levy will host Office Hours at TechSandBox on Stock and Corporate Structure. Office Hours provides access to experts in topics such as intellectual property, business formation, benefits, taxes, marketing, sales, funding, IT and technology commercialization. Daniele will be available for one-on-one, 45 minute sessions from 9:00AM- 3:00PM. This event will be offered probono for TechSandBox members and to non-members as space allows.

Slots are already filling! Sign up for Office Hours

Upcoming Seminars in Waltham & Cambridge! 07/16/2014

Posted by Morse, Barnes-Brown Pendleton in Corporate, Employment, Events, Intellectual Property, Legal Developments, MBBP news, Privacy and Data Security.
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The end of Summer and beginning of Fall are the perfect time to get back into the swing of things! Join us for timely, informative seminars on False Advertising, Sweepstakes & Contests, and Employment Law. Get the details below.


8/12/14 – Unfair Competition / False Advertising: How the Supreme Court’s recent decisions impact false advertising claims against competitors. (Waltham, MA) – In this seminar, we will discuss unfair competition and false advertising under the Lanham Act, the Lexmark International, Inc. v. Static Control Components, Inc.and POM Wonderful LLC v. Coca-Cola Co. decisions, and how these decisions may affect your rights against third parties. Complimentary seminar!

9/18/14 – Playing a Game of ChanceUnderstanding the Differences Between Sweepstakes, Contests and Illegal Lotteries. (Cambridge, MA) – Sweepstakes and contests are a great way to promote your business. However, there is a fine line between conducting legal sweepstakes or contests and conducting an illegal lottery. In this seminar, we will discuss what constitutes an illegal lottery, ways to structure contests / sweepstakes to comply with federal & state laws, state registration requirements and penalties for conducting an illegal lottery. Complimentary seminar!

10/17/14 – The Morse CourseEmployment Law Compliance & Risk Prevention for Managers, Supervisors and HR Professionals. (Waltham, MA) – Learn practical information and valuable strategies for avoiding the many traps that lead to expensive and time-consuming HR problems and employment litigation. Group discount available!

Have a different topic in mind? Check our Events Page for additional seminars or email us.

Mary Beth Kerrigan to Panel Seminar on Women Business Leaders 06/12/2014

Posted by Morse, Barnes-Brown Pendleton in Attorney News, Corporate, Events.
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Corporate Attorney Mary Beth KerriganThe Business Coalition (TBC) and the Showa Boston Institute for Language and Culture are uniting to host a panel discussion entitled “Shattering the Bamboo Ceiling” on June 12th. MBBP Corporate Attorney Mary Beth Kerrigan will sit as one of five panelists, all Boston-area women of distinction, who will discuss their personal journeys of where they are today in their work life. The event will be simulcast to students located at Showa Tokyo on Friday morning as well.

To learn more about the event, please visit The Business Coalition.


Risk Containment Strategies for Start-Ups 04/29/2014

Posted by Morse, Barnes-Brown Pendleton in Corporate, Events.
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The road to success for startup companies is rife with potential risks, including contractual liability to customers, strategic partners, and end users; violation of laws; infringement of intellectual property and other proprietary rights; and product liability. On Thursday, May 22nd, learn from a panel of professionals and entrepreneurs how to identify these risks and strategies for containing them at a free event hosted by MBBP and Telamon.

Join us for a lively discussion and then network over a beer at the Venture Cafe.

Visit the event page to learn more or to register.

Radio Entrepreneurs Interviews Shannon Zollo 04/28/2014

Posted by Morse, Barnes-Brown Pendleton in Attorney News, Corporate, Legal Developments, Venture Capital & Private Equity.
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Corporate Attorney Shannon Zollo

The Radio Entrepreneurs, a show that provides advice, information and connections for entrepreneurs, service providers and established companies, recently interviewed MBBP Corporate Attorney Shannon Zollo. Shannon was invited to discuss the Exit Planning Exchange (XPX) Boston, a community of trusted advisors to privately-held businesses and their owners who are focused on a successful path to the exit, and its annual Summit on May 2nd. The 2014 XPX Summit‘s theme is on growth and liquidity and helping business owners achieve both. To listen to the full discussion, please click the following link: Radio Entrepreneurs Interviews MBBP Attorney Shannon Zollo

Feel free to contact Shannon with any questions on exit planning or XPX.

Visit XPX Summit 2014 for more information or to register for the event.

Delaware Increases Corporate Formation Taxes 04/14/2014

Posted by Morse, Barnes-Brown Pendleton in Corporate.
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Corporate Attorney Joseph MarrowBy: Joseph Marrow

On Thursday, April 10, 2014, the Delaware legislature passed a new law, effective retroactively to January 1, 2014, which raises the annual corporate tax on limited liability companies, limited partnerships and general partnerships from $250 to $300 per year.  In addition, the legislation increases the minimum annual corporate franchise tax on businesses incorporated in Delaware from $75 to $175.  The Delaware legislature passed the legislation in an effort to fix a state budget gap.  Delaware has always been considered one of the most attractive states in the country for forming a new business enterprise.  It remains to be seen whether the new law will have an adverse impact on the state’s ability to continue to attract new businesses.

For more information on corporate formations, please feel free to contact Joe.

SEC Releases Study of Public Company Disclosure Requirements 02/07/2014

Posted by Morse, Barnes-Brown Pendleton in Corporate, Public Companies.
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Corporate Attorney Daniele Ouellette LevyBy: Daniele Ouellette Levy

The JOBS Act, which became law in April 2012, requires the SEC to conduct a review of the disclosure requirements in Reg. S-K in order to identify how the rules could be updated to modernize and simplify the registration process for emerging growth companies and reduce related costs. Reg. S-K is the primary regulation under the federal securities laws detailing the disclosure requirements applicable to public companies.

At the end of December 2013, the SEC released the results of its review of Reg. S-K.  In the study the SEC noted it had not conducted a comprehensive review of Reg. S-K since 1996 and stated that a reevaluation of the disclosure requirements was warranted due to significant changes in the manner many public companies operate their businesses and world events which have altered the regulatory framework for public companies. In such reevaluation the SEC would aim to ensure existing and potential investors, as well as the marketplace as a whole, receive meaningful information upon which to base investment decisions. In addition, the SEC stated that its regulatory framework must ensure that the disclosure requirements focus on information which is material and are flexible enough to adapt to dynamic circumstances.

This study is a starting point. In its conclusion, the SEC proposes undertaking a comprehensive plan to systematically review the disclosure requirements in all of the SEC’s rules and forms concerning the presentation and delivery of information to investors and the marketplace, not just Reg. S-K. We expect more to come on this issue.

For more information on public company disclosure requirements please contact Daniele Ouellette Levy.

MBBP Attorneys to Panel Upcoming MCLE Program – Building Business Organizations: LLCs, LLPs, Limited Partnerships & Corporations 01/30/2014

Posted by Morse, Barnes-Brown Pendleton in Attorney News, Corporate, Events, Taxation.
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Corporate and Tax Attorney Charles Wry, Jr. MBBP Attorneys Charles A. Wry, Jr. and Scott R. Bleier are among the faculty presenting at MCLE New England’s in-person program “Building Business Organizations: LLCs, LLPs, Limited Partnerships & Corporations” on Thursday, February 6 from 9:00 am – 12:00 pm.

The program focuses on new business organizations that are typically formed as limited liability companies (“LLCs”),Corporate Attorney Scott Bleier corporations, or, less frequently, limited partnerships or limited liability partnerships (“LLPs”). The faculty will discuss how to choose a form of entity based on a number of tax and non-tax considerations and then, if the entity chosen is a corporation or LLC, whether to use Massachusetts or Delaware law. Attendees will learn how to form a corporation or LLC in Massachusetts or Delaware, including how to prepare the various organizational documents. 

To learn more or to register for this event, please visit MCLE.

For more information on building business organizations, please contact Chip Wry or Scott Bleier.


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