Justia Mergers & Acquisitions Opinion Summaries

Appellants were minority stockholders in First Community Bank of Crawford County (FBC). After First Bank reached an agreement to merge with FCB, First Bank filed an application with the Arkansas State Banking Board. The Board subsequently approved the merger. Appellants filed a complaint seeking review of the Board’s decision, arguing (1) the Board did not adequately fulfill its duties under administrative law in reaching its decision, and (2) the statues and regulations followed by the Board unconstitutionally infringe on the due process and property rights of minority stockholders. The circuit court concluded that Appellants failed to preserve their substantive objections due to their failure to present these objections before the Board. The Supreme Court affirmed the dismissal of Appellants’ claims, holding that Appellants’ arguments were not preserved for judicial review. View "Booth v. Franks" on Justia Law

After a merger in 1995, William and Patricia Cavallaro received 38 shares of stock in Camelot, the merged company. Their three sons received 54 shares each. When Camelot was subsequently acquired, the Cavallaros received a total of $10,830,000, and each son received $15,390,000. The IRS issued notices of deficiency to the Cavallaros for tax year 1995, determining that Camelot had a pre-merger value of $0 and that when the merger occurred, William and Patricia each made a taxable gift of $23,085,000 to their sons. Therefore, each of the Cavallaros incurred an increase in tax liability in the amount of $12,696,750. The Tax Court ultimately concluded that William owed $7,652,980 and that Patricia owed $8,009,202. The Cavallaros appealed, arguing that the Tax Court erred by failing to shift the burden of proof to the Commissioner. The First Circuit affirmed in part, reversed in part, and remanded, holding (1) the Tax Court correctly determined that the burden of proof was on the Cavallaros; but (2) the Tax Court misstated the nature of the Cavallaros’ burden of proof. Remanded. View "Cavallaro v. Koskinen" on Justia Law

Bangor Hydro-Electric (BHE) and Maine Public Service Company (MPS) were regulated utilities engaged in the transmission and distribution of electric it. The companies merged to become Emera Maine during the pendency of this proceeding. BHE and MPS filed a petition for reorganization, under which Emera Maine’s parent company would increase its ownership interest in Algonquin Power & Utilities Corporation (APUC), a publicly-traded company that is in the electricity generation business. The petition was subject to approval by the Maine Public Utilities Commission because of the relationship that would result between Emera Maine, as a transmission and distribution entity, and APUC, a generator. The Commission approved the petition. On appeal, the Supreme Judicial Court vacated the Commission’s order approving the petition, holding that the Commission misconstrued the governing statute in the Electric Industry Restructuring Act. On remand, the Commission once again approved the petition. On the second appeal, the Supreme Judicial Court vacated the Commission’s order, holding that the Commission acted outside of its authority when it imposed conditions that would regulate APUC beyond what the Restructuring Act allows. Remanded with instructions to deny the petition. View "Houlton Water Co. v. Public Utilities Commission" on Justia Law

SCOPE filed suit claiming that the acquisition of the Valenica Water Company by the Castaic Lake Water Agency was void under Government Code section 1090 and the Political Reform Act (PRA), Gov. Code 81000 et seq., because one of the Agency's ten directors - Keith Abercrombie- was Valencia's general manager at the time the acquisition was be negotiated. The trial court rejected SCOPE's conflict of interest claims. The court affirmed the trial court's decision, concluding that the express exception to section 1090 in the Agency’s enabling legislation applies to a contract to acquire a water company; the express exception to section 1090 also implicitly repeals (and thereby amends) the PRA’s applicability to such an acquisition; and the Legislature complied with the special requirements set forth in section 81012 for amending the PRA, which was originally enacted by voter initiative. View "Santa Clarita Org. v. Abercrombie" on Justia Law

The Hart-Scott-Rodino Antitrust Improvements Act of 1976 (Act), 15 U.S.C. 18a, added section 7A to the Clayton Antitrust Act of 1914, 15 U.S.C. 12 et seq., to establish notification and waiting requirements for large acquisitions and mergers. The principal purpose of the Act is to facilitate Government identification of mergers and acquisitions likely to violate federal antitrust laws before the proposed deals are consummated. In 2013, the FTC modified its reportable asset acquisition regulations to clarify that, even if patent holders retain limited manufacturing rights or co-rights, transfers of patent rights within the pharmaceutical industry constitute reportable asset acquisitions if all commercially significant rights are transferred. PhRMA filed suit challenging the FTC's Rule and the district court granted summary judgment in favor of the FTC. The court concluded that the Rule does not violate the plain terms of the Act; the court owes deference to the FTC because the contested rule embodies a permissible construction of the Act; and the Commission's action also survives review under the arbitrary and capricious standard. Because the FTC's action is supported by reasoned decisionmaking and PhRMA's claims are without merit, the court affirmed the judgment of the district court. View "Pharmaceutical Research v. FTC" on Justia Law