The Network:
Business at Berkeley Law



Valeant and Ackman’s Hostile Takeover Falls Through But Still Pays Out

Valeant’s aggressive and longstanding pursuit of Allergan, Inc. has finally been resolved with an unlikely twist: a deal between Allergan and Actavis. As of November 16, Allergan has agreed to be acquired by Actavis for $66 billion, representing a valuation of about $219.00 per share in cash and stock. This deal leaves Valeant and William Ackman, who joined forces to acquire Allergan, with a victory that defies conventional wisdom; the stock acquired in their bid to control Allergan’s board is now worth $2.6 billion, with 15% to go to Valeant and the remaining $2.2 billion to be collected by Ackman’s hedge fund.

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Record Punitive Damages set in Juarez v. AutoZone Stores, Inc. Verdict

On November 18, the U.S. District Court for the Southern District of California upheld a jury verdict awarding Rosario Juarez, a former San Diego AutoZone store manager, almost $873,000 in compensatory damages and a record $185 million in punitive damages due to pregnancy-related harassment, discrimination, and retaliation.

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Market Conditions Lead to Increase in Mergers & Acquisitions

A strong stock market, low borrowing costs, and increased confidence in the global economy have created conditions ripe for the current boom in mergers & acquisitions (M&A). M&A deals targeting American companies have topped $1.5 trillion this year, while total global deals have reached the $3 billion mark for just the fifth time. These numbers are both up over 50% from a year ago and are the highest seen in the last seven years. This is strong evidence that the M&A market has completed its resurgence and has finally recovered from the malaise of the global financial crisis.

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Central Bank Gets Blame for Cypriot Crash

The release of a Cyprus government report this past week reveals the enduring difficulties faced by central banks of small European nations, in their efforts to stabilize fragile economies while promoting the monetary interests of the wider Eurozone.

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Is More Better? Transparency and a CEO’s Compensation

Employers generally hire the best person for a job at the lowest possible cost while still ensuring a remuneration package large enough to prevent voluntary lateral transfers and hostile talent acquisition. This is especially true for a company’s chief executive officer (“CEO”), who serves a dual role of maximizing profits for the company and responding to shareholders’ demands. However, the exponential growth in CEO compensation raises concerns over regulating individual corporate governance and promoting collective social policy goals.

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Fannie Mae Seeks to Ease Mortgage Rules

Despite current low interest rates, the U.S. housing market is still struggling and is not back to the pre-2008 crisis status. The federal government wishes to increase available housing credit to bring more people into the housing market by expanding mortgage availability with lower down payments. These changes could set the stage for more lending.

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The Royal Bank of Scotland Will Help British Police Tackle Complex Financial Crimes

The Royal Bank of Scotland, in which the British government owns 81 percent, was allegedly involved in manipulation of foreign exchange markets and subject to various regulatory investigations along with several other major banks. The Department of Justice in Washington and the Serious Fraud Office in Britain are overseeing separate criminal investigations into these banks and their traders.

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Virgin America Announces Plan For Initial Public Offering

On Monday November 3, 2014 Virgin America announced its plan for an initial public offering (IPO). The company plans to sell 13.1 million of the 13.3 million shares in the IPO to raise about $320 million. The shares are expected to be priced at $21 to $24 per share, which would value the company at approximately $1 billion. According to the filing with the Securities and Exchange Commission, the raised capital will be used for expansion of new routes and improving inflight entertainment systems.

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Morgan Lewis Approves Bingham Deal

Morgan Lewis, a large Philadelphia law firm, approved the Bingham deal, with the majority of Bingham’s partners (227 of approximately 300) moving over and increasing Morgan Lewis’ headcount to nearly 2,000 lawyers. A total of 600 out of the currently 700 Bingham attorneys are expected to join Morgan Lewis. A condition of the deal set a period of time for key Bingham partners to stay at Morgan Lewis after the deal or forfeit their capital investment into the partnership. The deal is being referred to as a mass lateral hire and not a merger.

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Big Banks’ Legal Costs Continue in the Face of Currency Manipulation Fines

At the end of October, many big banks edited their earnings reports to reflect increased legal costs, indicating that the banks were close to reaching a settlement with regulators over foreign currency market manipulation.

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