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Discrimination (German)

EATON & VAN WINKLE LLP

BEWUSSTSEINSTRAINING GEGEN DISKRIMINIERUNG FÜR AUSLÄNDISCHE

MANAGER – WAS MAN NICHT SAGEN DARF UND AUCH NICHT DENKEN SOLLTE

In der US-amerikanischen Geschichte waren Arbeitnehmer verschiedentlich einer Diskri- minierung oder Misshandlung ausgesetzt. Heutzutage kann jedoch ein Opfer von Diskri- minierung am Arbeitsplatz – ob diese Diskriminierung nun tatsächlich stattfand oder nur als solche empfunden wurde – dies benutzen, um Veränderungen durchzusetzen und be- trächtliche Entschädigungszahlungen zu erzielen. Sicher handelt es sich oft um wirkliche Diskriminierung. Rechtliche Maßnahmen gegen größere US-Firmen sind inzwischen ziemlich weit verbreitet. Eine Online- Suche bei der New York Times zeigt allein im letzten Jahr Diskriminierungsfälle gegen Boeing, Maytag, Morgan Stanley, Wal-Mart, US Pipe, Merrill Lynch, Lowe’s, Coca-Cola, Halliburton und Delta Airlines. Findet die Diskriminierung seitens ausländischer Manager statt, kann das durchaus an der Uner- fahrenheit mit der amerikanischen Geschichte, dem Kontext und dem sozialen Umgang liegen. Die Auswirkungen, auch wenn unbeabsichtigt, sind aber oft einschneidend und stellen eine schmerzliche Erfahrung mit dem amerikanischen Rechtssystem dar. Unkennt- nis des amerikanischen Gesetzes ist dann keine Entschuldigung, und ein ausländischer Manager sollte sich nicht auf das Entgegenkommen der Geschworenen verlassen.

Der in die USA entsandte Manager, der sich unvorbereitet und ohne erfahrene Personal- Sachbearbeiter auf dem amerikanischen Geschäftsparkett bewegt, begibt sich in ein

Minenfeld – wobei die Minen oft erst mit einiger Verzögerung ausgelöst werden. Die Klagen werden manchmal erst Monate oder sogar Jahre später vor Gericht behandelt, zu einem Zeitpunkt, zu dem der Manager schließlich und endlich den richtigen sozialen Umgang gelernt hat. Dann aber ist es zu spät.

Dieser kurze Artikel kann nicht alle Feinheiten dieses Rechtsgebiets abdecken, kann jedoch einen Bewusstseinsprozess in Gang setzen, um eine baldige Anpassung und Sen- sibilisierung zu ermöglichen. Geschieht dies nicht rechtzeitig, kann es sehr, sehr teuer werden. Diese Zusammenfassung soll eine Hilfestellung für ausländische Manager sein, die nicht über eine große US-amerikanische Personal- und Rechtsabteilung verfügen. Sie ist aus einem eher persönlichen Blickwinkel geschrieben und kann eine anwaltliche Bera- tung keineswegs ersetzen.

Unter dem aktuellen US-amerikanischen Gesetz gehen die Arbeitnehmerschutzgesetze hauptsächlich auf Menschenrechtsverletning jener Gruppen zurück, die bereits historisch unter Diskriminierung gelitten haben. Diese Gruppen umfassen ethnische und rassische Minderheiten sowie religiöse Minderheiten, Frauen, Homosexuelle, Behinderte und Ältere (dies betrifft alle über 40-Jährigen). Ziel ist es, den Personen aus diesen Gruppen ein angenehmes Arbeitsklima zu bieten und die chancengleiche Gelegenheit zur beruflichen Weiterentwicklung zu geben. Amerikaner legen wirklich sehr viel Gewicht auf Leistung.

Die wahrscheinlich am schwersten benachteiligte Gruppe in der amerikanischen Ge- schichte ist die der Afroamerikaner. Die amerikanische Tradition der institutionellen – ja sogar auch verfassungsbedingten – Sklaverei ist die schlimmste Form von Diskriminie- rung. Obwohl die Sklaverei mit dem Civil War (Bürgerkrieg 1861-1865) offiziell beendet wurde, setzte sich auf weniger formale Weise die wirtschaftliche, politische und gesell- schaftliche Diskriminierung fort, die in Lynchmorden, Einschüchterung, Einschrän- kungen des Wahlrechts und Niederlassungs- sowie Arbeitsrestriktionen ihren Ausdruck fand. Selbst heute noch finden in einigen Städten Kreuzverbrennungen vor den Häusern statt – ein anschauliches Beispiel der schlimmsten Diskriminierung. Das Problem wurde größtenteils, aber noch nicht völlig beseitigt, und es ist auch nicht allein auf den Süden der USA begrenzt. Daher ist es nicht ratsam, am Arbeitsplatz Kommentare über Rasse abzugeben. Bestimmte Worte, die im Rahmen der relativ homogenen Gesellschaft Euro- pas oder Asiens harmlos klingen, sind in den USA mit jahrhundertealten Inhalten beladen und rufen sehr negative Reaktionen hervor. Bestimmte Begriffe, die in fiüheren Zeiten nicht als abwertend gesehen wurden, gelten nunmehr als fragwürdig und politisch nicht korrekt. Als Beispiel seien ,,Negro” oder „colored” (Neger oder Farbiger) genannt. Der Begriff „blacks” (Schwarze) ist schon eher angemessen, zur Zeit ist allerdings die Be- zeichnung „African-American” (Afroamerikaner) am üblichsten.

Auch beschreibende Begriffe ohne rassischen Inhalt werden als negativ angesehen, wenn diese aus einem traditionell rassistischen Kontext abgeleitet werden. „Boy” ist ein solches Wort. ,,Son” ist nicht ganz so problematisch, sollte aber dennoch vermieden werden. Jede Art väterlichen Verhaltens – auch gut gemeint – wird als herabwürdigend empfunden.

Eine weitere Form von Diskriminierung ist die stereotype Beschreibung fast jeder eth- nischen Minderheit, die benachteiligt war oder auch noch ist. Die Liste abfälliger Bemer- kungen ist zu lang und eine Auflistung wäre geschmacklos. Beinahe jede Bevölkerungs- gruppe, die neu in die USA immigrierte, wurde anfänglich Opfer von Diskriminierung und Missachtung. Ein Ausländer, der sich auf die ethnische Herkunft einer Person be- ziehen muss, sollte Redewendungen wie „Italian-American”, „Greek-American” usw. be- nutzen.

Neben einer Namensgebung für diese Gruppen sind auch Verallgemeinerungen über ethnische Gruppen riskant. Das gilt auch unabhängig davon, ob diese durch wissen- schaftliche Studien bestätigt werden. Sätze wie „Die Italiener sind …” oder „die Iren sind. . . ” sollten tunlichst vermieden werden.

Religiöse Gruppierungen mögen hier weniger empfindlich sein als ethnische Minder- heiten, jedoch sollte auch hier nur der offizielle Name der Kirche oder der religiösen Gruppierung genannt werden. Wahrscheinlich wegen des Umgangs mit dem Begriff während der Nazizeit in Deutschland ist es in den USA unüblich, von „Jews” (Juden) zu sprechen, außer in stehenden Wortverbindungen wie „Christians and Jews”. Es gibt keine direkte Alternative zu dem Wort „Jude”, man hört jedoch die Bezeichnung „Jewish people”. Die Regeln über zu vermeidende Verallgemeinerung bezüglich ethnischer Minderheiten – ob schmeichelhaft oder auch nicht – gelten ebenso für religiöse Gruppie- rungen.

Ethnische und religiöse Feiertage sollten ebenfalls vorsichtig behandelt werden. Selbst ein US-Manager sollte über einen Kalender verfügen, der alle religiösen und ethnischen Feiertage enthält, um eine unsensible Terminsetzung zu vermeiden. Traditionell werden jüdische Feiertage berücksichtigt, mittlerweile werden aber auch afroamerikanische Feiertage wie der Geburtstag von Martin Luther King Jr. und Quanza berücksichtigt. Ein leitender Angestellter bei Texaco brachte sich und seine Firma in große juristische Schwierigkeiten, als er während einer internen, heimlich auf Tonb and aufgenommenen Diskussion respektlos über die Feier Quanza sprach. In manchen Gegenden, wo Muslime eine wachsende Rolle spielen, sollten auch deren Feiertage berücksichtigt werden.

Obwohl Frauen in der Gesellschaft den größten Bevölkerungsanteil stellen, sind sie tra- ditionell im wirtschaftlichen und politischen Leben sehr benachteiligt worden. Zum Beispiel waren US-amerikanische Frauen erst viel später als afroamerikanische Männer wahlberechtigt. Heutzutage aber spielen Frauen in den Vereinigten Staaten beruflich eine größere Rolle als in vielen anderen Ländern. Ein ausländischer Manager wird höchst- wahrscheinlich mit weiblichen Juristen, Bankiers oder Wirtschaftsprüfern Geschäftskon- takte pflegen. Diese Personen sollten in erster Linie als professionelle Kontakte behandelt werden, und erst in zweiter Linie – wenn überhaupt – als Frauen. Je weniger man sich da- rauf bezieht, dass es sich um eine Frau handelt, umso besser. Im Vergleich zu Europa sind amerikanische Frauen gegenüber Annäherungen empfindlicher. Als allgemeine Regel sollte daher gelten, dass man eine Kollegin nur als solche betrachtet und keine Be- merkungen über ihr Äußeres macht. Berührungen, Flirten, der Vorschlag auf einen Drink nach Feierabend sowie persönliche Fragen sind hier hoch gefährliche Verhaltensweisen. Dies gilt selbst dann, wenn eine Frau darauf empfänglich reagiert. Ein Manager selbst wird kaum Pin-up-Girls aufhängen, aber es ist auch riskant, am Arbeitsplatz anderer solche Poster zuzulassen. Poster, die auf den Straßen Europas üblicherweise offen ausge- stellt werden, würden am amerikanischen Arbeitsplatz ein Problem sein; selbst in pri- vaten Schließfächern von Arbeitnehmern würden solche Poster als Beitrag zu einer frauenfeindlichen Arbeitsumgebung angesehen werden.

So wie die Titulierung „boy” gegenüber afroamerikanischen Männern sollte auch die Titulierung „girl” gegenüber post-pubertären Frauen unbedingt vermieden werden, da sie oft als herabwürdigend empfunden wird. Im Zweifel sollte man immer das Wort „women” (Frauen) benutzen. Man sollte auch vermeiden „female” (weiblich) zu sagen, wie z.B. „female plumber” (weiblicher Installateur) oder „female accountant” (weiblicher Buchhalter). Auch ist das Wort ,,Lady” als Titelpräfix mehr als unangemessen. Man sollte zumindest versuchen, typische geschlechtsspezifische Bezeichnungen zu vermeiden, wie

z. B. ,,fireman”, „postman” und ,,chairman”. Diese wurden mittlerweile durch „fire- fighter”, ,,letter carrier”, ,,chairperson” oder einfach „chair” ersetzt. Diese Neuerungen mögen besonders dem Manager schwer fallen, dessen Muttersprache nicht Englisch ist.

Genauso ist es unklug, Witze über Fragen der Rasse, ethnische Gruppen, Religions- oder Geschlechtszugehöriglceit zu machen – ob sie lustig sind oder nicht. Viele Amerikaner er- zählen sich heute noch Witze über die jüdische Mutter, über den Deutschen, Franzosen, den Italiener, den Rabbi und den Pfarrer. Aber auf manche Personen mögen solche Witze eine beleidigende Wirkung haben. Nicht minder gefährlich ist das Nachahmen von Ak- zenten. All dies ist am Arbeitsplatz nicht notwendig und bringt die Gefahr rechtlicher Konsequenzen wegen der Schaffung einer„feindlichen Arbeitsumgebung” mit sich.

Sexuelle Präferenzen wie Homosexualität sind ebenfalls ein empfindliches Thema. So- weit das Thema angesprochen werden muss, sollte der Manager sachliche Begriffe ver- wenden und lockere Begriffe eher vermeiden. „Gay” (schwul) und ,,lesbian” (lesbisch) sind dabei akzeptabel. Einstellungsentscheidungen, die auf Grund der sexuellen Präferenz getroffen werden, können mitunter in bestimmten Gerichtszustndigkeiten arbeitsrecht- liche Verfahren nach sich ziehen.

Die Rechte von Behinderten am Arbeitsplatz wurden in den letzten 15-20 Jahren erheb- lich erweitert. Dabei fallen die körperliche und die geistige Behinderung unter den ar- beitsrechtlichen Schutz. Themen wie Gewichtsprobleme oder Drogen- und Alkoholmiss- brauch sollten nur sehr behutsam angesprochen werden. Es ist schwer vorstellbar, dass ein

Manager eine absichtlich abfällige Bemerkung über einen Angestellten macht, dessen Sehkraft stark eingeschränkt ist oder der eine Prothese braucht. Geistige Krankheiten sollten aber genauso ernst genommen werden. Dies gilt auch für Bemerkungen, die etwa den Ehepartner, die Kinder oder andere Angehörige des Angestellten betreffen könnten. Ebenso wie bei bestimmten ethnischen Gruppen, ändern sich mit der Zeit die verschie- denen Bezeichnungen. Begriffe, die vor 20 Jahren akzeptabel waren, machen nunmehr einen unaufgeklärten oder herabwürdigenden Eindruck. Bei der Wahl passender Worte kann das Internet helfen. Zu den verschiedenen Krankheiten und Behinderungen können leicht Informationen eingeholt werden, da es zumeist Interessensgruppen gibt, die Web- Seiten schalten. Dort kann ein Überblick über das sich durchsetzende Selbstverständnis dieser Gruppen gewonnen werden.

In den USA ist jeder Arbeiter, der über 40 Jahre alt ist, gegen Altersdiskriminierung bun- desrechtlich (nach Federal Law) geschützt. An manchen Orten werden bereits jüngere Arbeitnehmer gesetzlich geschützt (nach Local Law). Formulierungen wie „frisches Blut in die Organisation bringen” oder „die Firma neu beleben” könnten als Versuch ver- standen werden, ältere Arbeitnehmer durch jüngere zu ersetzen. Das o.g. Maytag-Ver- fahren betraf eine Verringerung der regionalen Vertriebsleiterstellen. Manager, die über 50 Jahre alt waren, waren davon überproportional betroffen – daher das Verfahren. So- wohl Männer wie auch Frauen sind geschützt. In der Regel sollte eine Firma keine eigenen Ruhestandsregelungen treffen. Ausnahmen können zwar gemacht werden, dies sollte allerdings sorgfältig mit Hilfe einer Rechtsberatung geschehen.

Die genannten Probleme stellen sich noch schärfer, wenn ein ausländischer Manager eine Rede hält. Es wimmelt von Beispielen wohlmeinender und intelligenter Europäer, die un- sensibel auftreten. Zum Beispiel erklärte ein hoher deutscher Politiker, der bei einer deutsch-amerikanischen Konferenz neben einem amerikanischen Juden stand, dass alle Konferenzbesucher die gleichen christlichen Wurzeln hätten. Oder Jacques Chirac sprach von französischen Moslems, Juden und „normalenx Franzosen. Der Redner sollte einfach davon ausgehen, dass jemand unter den Zuhörern zu einer benachteiligten Gruppe gehört oder mit jemandem aus einer solchen Gruppe verwandt ist.

Manager aus Ländern, in denen Kündigungsschutzgesetze gelten, betrachten die USA oft als ein Land des „Hire and Fire”. Tatsächlich ist es in den USA einfacher, Arbeitnehmer zu entlassen, ohne dass zusätzliche Kosten anfallen. Das gilt aber nur, wenn der Grund für die Entlassung nicht als unangemessen oder missbräuchlich eingestuft wird. Unange-

messen ist die Entlassung eines Arbeitsnehmers insbesondere dann, wenn sie auf Grund der Zugehörigkeit zu einer der genannten Gruppen – Rasse, Religion, Geschlecht, sexu- elle Vorlieben, Behinderungen oder Alter – erfolgt. In diesen Fällen kann eine Entlassung teuer zu stehen kommen und schließlich bis zur Gerichtsverhandlung führen. Auch im Rahmen einer Unternehmensübernahme kann es bei Arbeitnehmereinstellungen schnell zur Gerichtsverhandlung kommen, wenn entsprechend freie Arbeitsplätze nicht den einer Minderheit zugehörigen Arbeitnehmern des verkaufenden Unternehmens angeboten werden. Dasselbe gilt auch bei der Restrukurierung oder Verkleinerung von Unter- nehmen. Der Anschein von unangemessener Diskriminierung kann hier ebenso proble- matisch sein wie die eigentliche Diskriminierung.

Was der Manager sagt und macht, ist eine Sache – schwieriger kann es bei der Frage werden, ob Handlungen amerikanischer Untergebener als angemessen eingestuft und er- laubt werden. Durch eine konservative Vorgehensweise kann der Manager verhindern, auf die Anklagebank zu geraten. Um Gerichtsverhandlungen für das Unternehmen zu vermeiden, ist es notwendig, dass der Manager die Handlungen seiner Mitarbeiter be- wertet und reguliert. Es kommt allerdings vor, dass diese nicht bereit sind, so konservativ zu sein. Wieweit solche Handlungen dann tatsächlich geduldet werden sollten, kann hier nicht umfassend behandelt werden – jedoch sollten diese Fragen nicht unbeachtet blei- ben. Es ist schwierig, abstrakt einzuschätzen, wann die Kosten einer Rechtsberatung ge- genüber der eigentlichen Gefahr überwiegen. Sicherlich fällt die Kosten-Nutzen-Rech- nung günstiger aus, wenn die Kosten unter mehreren Managern und vielen Arbeitneh- mern aufgeteilt werden können. Zusätzlich zur anwaltlichen Beratung kann ein leitender Angestellter eine Unternehmensberatung beauftragen, die oft Kurse und Seminare zur entsprechenden Ausbildung für Manager und Angestellte anbietet. Dies kam dann auch als Beweis dafür dienen, dass die Geschäftsführung diese Fragen ernst nimmt.

Prozessrechtliche Aspekte des US-Rechts können bei Diskriminierungsfällen oft eine Schlüsselrolle spielen, insbesondere dann, wenn die von den einzelnen Arbeitnehmern geltend gemachten Geldforderungen nicht allzu hoch sind. Im US-amerikanischen Rechtssystem muss der Arbeitnehmer als Kläger grundsätzlich fast nie für die Gerichts- kosten des Arbeitgebers aufkommen. Der Arbeitnehmer kann daher in einem Verwal- tungsverfahren mit nur geringen Kosten oder völlig kostenfrei Klage erheben. Der Ar- beitnehmer kann aber auch einen Rechtsanwalt beauftragen, der bereit ist, den Fall für eine festgelegte Gewinnbeteiligung zu übernehmen, um im Falle des Obsiegens dann eine Prämie zu erhalten. Der Anwalt bezieht nur dann ein Honorar, wenn der Arbeitnehmer den Fall gewinnt. Der Arbeitgeber muss dagegen die Anwälte sofort auszahlen. Diese Ausgaben können im Fall einer eigenen großen Rechtsabteilung sicher verhältnismäßig gering gehalten werden. Jedoch sind viele ausländische Arbeitgeber nicht groß genug, um auf Prozessrecht spezialisierte Anwälte zu beschäftigen. Sollte dies dennoch der Fall sein, kam die Personalabteilung sicherlich Präventionsarbeit leisten, damit Manager diese Probleme gleich vermeiden können.

Eine weitere prozessrechtliche Erwägung besteht in der Einschätzung der Chancen eines Klägers, über ein „summarisches Verfahren” hinauszukommen. Im Falle eines Verfah- rens vor dem Geschworenengericht trägt der Kläger seinen Fall den Geschworenen vor. Bevor die Geschworenen entscheiden, ob sie dem Kläger Glauben schenken, kann die

Verteidigung allerdings beim Richter beantragen, die Frage vor den Geschworenen zu- rückzuhalten. Die Verteidigung beantragt beim Richter, dass die Beweisführung mangel- haft ist, sogar wenn diese inhaltlich ihre Richtigkeit hat. Falls der Richter der Verteidi- gung zustimmt, wird er die Klage abweisen. Entscheidet sich der Richter allerdings dazu, den Fall nicht abzuweisen, kommt der Fall vor das Geschworenengericht und es besteht die Gefahr eines umfassenden Urteils zu Lasten des Beklagten. Damit besteht ein unge- heurer Druck, zu einem außergerichtlichen Vergleich zu kommen, bevor die Jury ihr Ur- eil fallen kann. Der Arbeitgeber muss daher vermeiden, dem Kläger ausreichendes „Be- weismaterial” auszuhändigen, auf dessen Grundlage dieser einen Fall untermauern kann, der einen solchen Antrag übersteht.

Den meisten Geschäftsleuten sind Sammelklagen ein Begriff. Das Vorliegen allgemeiner Einstellungsrichtlinien, von Toleranz gegenüber Diskriminierung oder sonstigen Verhal- tensmustern usw. kann dazu beitragen, dass zahlreiche Arbeitnehmer und ehemalige Ar- beitnehmer mit kleineren Klagen gemeinsam eine Sammelklage führen. Mit der Sammel- klage steigen auch die Aussichten auf beträchtliche Entschädigungssummen und An- waltsprämien.

Gleichzeitig sind unter dem US-amerikanischen Gesetz Bußgelder erlaubt, die das Schadensersatzurteil drastisch erhöhen können.

Kurz gesagt, mögen ausländische Manager zwar die US-amerikanischen Schutzgesetze gegen die Diskriminierung von Arbeitnehmern als übertrieben empfinden, aber es existiert eine wohl durchdachte und ausgewogene, historische und rechtliche Basis für diese Gesetze, die jeder Manager auf eigene Gefahr hin ignorieren möge.


Verfasser:
Rudolph S. Houck
Partner
EATON & VAN WINKLE LLP
3 Park Avenue, 16th Floor
New York, New York 10016- USA
Tel. (212) 561-3608
Fax (212) 779-9928
E-mail: rhouck@evw.com

RULE 10b-5 AS APPLICABLE TO NEGOTIATED M+A TRANSACTIONS

This informal memo collects some relevant sources on the application of Rule 10b-5 to M+A transactions.

1. Common law fraud differs from state to state but essentially consists of five elements, as follows:

(1) a false representation, usually one of fact, made by the defendant;

(2) the defendant’s knowledge or belief that the representation was false, or

as made with reckless disregard of the truth;

(3) an intent to induce the plaintiff to act or to refrain from acting;

(4) the plaintiff’s action or inaction taken in justifiable reliance upon the representation; and

(5) damage to the plaintiff as a result of such reliance.

2. Securities fraud under Section 10b-5 of the Securities Exchange Act of 1934 is less demanding than common law but still requires scienter of the seller and reliance by the buyer. It states:

It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,

(a) To employ any device, scheme, or artifice to defraud,

(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statement made, in the light of the circumstances under which they were made, not
misleading, or

(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security.

3. 10b-5 applies to all sales of securities, including privately negotiated transactions and the sale of all the stock of a company. It does not apply to sales of companies structured as the sale of assets.

4. Section 29(a) of the ’34 Act states:

any condition, stipulation, or provision binding any person to waive compliance with any provision of this Act or of any rule or regulation thereunder….shall be void.

15 USC Sec. 78cc. This is also in Section 14 of the Securities Act of 1933 and Section 10(5) of the UK’s The Companies Act.

5. Until about 2000, purchasers regularly waived the application of 10b-5 by inserting in the stock purchase agreement (“SPA”) a statement by the buyer that it was not relying on statements or representations by the seller not contained in the SPA. Since reliance is an essential element to proving 10b-5 fraud, giving that statement effect would defeat a claim at least to the extent it was based on a statement by the seller.

6. Some writers take the position that the “non-reliance” language should be ignored completely due to the language of Section 29(a). Jonathan P. Altman, Rule 10b-5 and Reasonable Reliance: Why Courts Should Abandon Focus on Non-Reliance Clauses. 68 Pitt LR 747 (2007).

7. The courts seem to be [still] split on whether the non-reliance language is effective to waive claims based on seller’s statements not contained in the SPA. In particular the 1st, 2nd and 7th Circuits take different views.

8. The cases seem to all focus on affirmative statements of the seller not contained in the SPA. They do not go to the other two possibilities of 10b-5 – affirmative statements made in the SPA leaving out facts material to the buyer’s decision and affirmative statements which are misleading. Even the non-reliance on extra-contractual statements would not cover seller’s material omissions.

9. Besides “non-reliance” statements, sellers also try to include statements by the buyer that (a) it has had ample opportunity to conduct full due diligence and ask all questions material to it and (b) the contract contains all agreements between the parties.

10. Adding 10b-5 language (see 12 below) to a SPA or asset purchase agreement (“APA”) deviates from the Securities Exchange Act language in two ways, making it more dangerous to seller:

A. It may not require seller’s scienter. So buyer may not have to prove seller’s knowingly having left out material information or having misled buyer.

B. It may not require buyer to prove that it reasonably relied on the omission or misleading effect of the statements.

Whether or not seller needs to intend to mislead buyer depends on the language of the representation. Likewise, whether or not the buyer needs to have relied on the misleading statement or omission depends on the language of the APA.

11. Reliance in contractual breach claims is closely related to sandbagging. Must the buyer have cared about the information? Must it have believed it to be true? This is where the due diligence opportunity language comes in. If buyer did not care enough to get an affirmative statement from seller, could it be relying on the omission? If it had ample opportunity to study all the documents and disclosures in the due diligence documents and ask for more, how can it now claim it relied on the omission or misleading statement?

12. A standard 10b-5 contract insert reads:

No representation or warranty or other statement made by [Target] in the Agreement, the Disclosure Letter, any supplement to the Disclosure Letter, the certificates delivered pursuant to Section ____ or otherwise in connection with the Contemplated Transactions contains any untrue statement or omits to state a material fact necessary to make any of them in light of the circumstances in which it was made, not misleading.

13. A standard “full disclosure” formulation reads:

Seller does not have Knowledge of any fact that has specific application to Seller (other than general economic or industry conditions) and that may materially adversely affect the assets, business, prospects, financial condition or results of operations of Seller that has not been set forth in the Agreement or the Disclosure Letter.

14. In 2006, 68% of all privately negotiated M+A transactions contained one or both of the statements. [Was this for asset deals??] In 2011, the percentage had changed to 30+%. Was this a significant trend, a blip or a change in the relative bargaining strengths of buyers and sellers?

15. PLC notes: Buyer wants a full disclosure representation with no knowledge qualifier. Buyer wants seller’s knowledge to be “constructive” – i.e. a reasonable investigation by seller would have disclosed it. Seller wants this limited to actual knowledge so no investigation is needed and no comparison to a reasonable man is permitted. [Key Negotiating Points in Private Acquisition Agreements Comparison Chart. Howard T. Spiko, Kramer Levin.]

In “Eliminating Securities Fraud Class Actions Under the Radar” by Professor Barbara Black (2009) states: “…it is well established that Section 29(a) does not permit provisions that weaken investors’ ability to recover under the federal securities laws, no matter what form they take: “no-reliance” clauses in stock purchase agreements, “no-action” clauses in indentures, clauses that provide for an alternative remedy, and clauses that specify indemnification as the sole remedy. The only situation where some courts have enforced no reliance clauses is in negotiated contracts among sophisticated investors or corporate insiders where the written agreement contains specific representations and the no reliance clause serves the purpose of barring representations not contained in the agreement. While the judiciary’s creation of a parole evidence exception to Section 29(a) is questionable, it is of limited scope. P. 23 citing

AES Corp. vs. Dow Chemical Corp; Caiola v. Citibank, N.A.,; Rogen v. Illikon Corp., Roll v. Singh; MBI Acquisition Partners, LP v. Chronicle Publ. Co.

Citibank v. Itochu Int’l.

Rissman v. Rissman

Harscho v. Segui.

RULE 10b-5 and RELATED CONSIDERATIONS IN ACQUISITION AGREEMENTS by Mark Betzen (Jones Day, June 2004)

A typical insertion states “neither the representations and warranties set forth in the acquisition agreement nor the related disclosure schedule contain any misstatement of a material fact or omit to state a material fact necessary to prevent the statements made therein from being misleading.”

A broader form extends to material misstatements and omissions in connection with the transaction – so beyond the acquisition agreement.

Contractual representations do not depend on culpability or reliance (which is presumed or unnecessary). But contractual representations may well be subject to limits on recovery (unlike 10b-5).

Two important effects: 1) it includes omissions as well as misstatements and may cover misstatements and omissions outside the acquisition agreement; 2) a presumption that the statements or omissions were reasonably relied upon.

Re “non-reliance” – in 2nd Circuit (NY) and 7th (Illinois), non-reliance clauses should be given effect to bar Rule 10b-5 claims based on extra-contractual representations. [What about omissions or misleading statements?] See Harsco Corporation and Rissman.

In 1st Circuit (Massachusetts) and 3rd Circuit (Delaware) – giving absolute effect violates Section 29(a). See Rogen and AES Corp.

In Harsco there as a non-reliance clause and 14 pages of representations and warranties with a sophisticated buyer, so it could not reasonably have relied on extra-contractual representations. Buyer did not indiscriminately waive 10b-5 protection but limited the representations to a reasonable degree.

In Rissman, the court said to disregard the non-reliance would mean the plaintiff could simply say it lied when it said it did not rely.

In Rogen, the court said it would not give literal effect to the clause. The clause can be taken as evidence. So the non-reliance clause is still important.

Re Integration Clauses (the contract contains all provision) – these are helpful to seller but not determinative.

Re Due Diligence Clauses – these tend to negate reasonable reliance. Some courts say if a sophisticated party has an opportunity to investigate pre-contractual disclosures or have them incorporated, it has willingly incurred the risk. But the cases do not involve omissions! Also, due diligence rooms are often a mess. Does the buyer have to tell the seller or the seller’s investment banker that they made a mess of the disclosure process? Does this clause make a US style due diligence review like a Continental European investigation – where the buyer is charged with knowledge of everything included in the room?

Exclusive Remedy Clauses – these are not likely to preclude a 10b-5 claim. Citibank v. Itochu Intl. due to Section 29(a).

PRACTICAL OBSERVATIONS

  1. Seller in a stock deal cannot foreclose a 10b-5 claim but can probably make proof of reliance by the buyer difficult by including language as to non-reliance, opportunity to investigate and completeness of the agreement.
  2. Seller will do better by making the sole jurisdiction New York and not Delaware.
  3. Buyers are wise to consider the offering memorandum and insert any representations of importance found in the memorandum into the Stock Purchase Agreement or Asset Purchase Agreement.
  4. Reliance on representations made by seller buy not included in the APA or SPA will be difficult. But reliance on a belief that all material information has been disclosed may be easier. Also reliance on representations which seller knew to be misleading could be easier.
  5. If a buyer in an asset deal wants protection, it must insert a 10b-5 like representation.
  6. The issues in a 10b-5 representation are whether the seller must know a statement or omission is false or misleading and whether the buyer must prove its reliance on the statement.
  7. Reliance becomes a factor when dealing with sandbagging. If the APA contains an anti-sandbagging provision, then the issue is whether the buyer really relied on the omission or the misleading statement.
  8. If a seller intends to ask for a “full opportunity to conduct due diligence” representation, then buyer has an interest in controlling the disclosure process. It makes a difference in how buyer conducts the process.

AMERICAN BAR ASSOCIATION INTERNATIONAL SECTION New York April 17-20, 2018

Last week I attended four days of panel discussions organized by the International Section of the American Bar Association. The topics that interested me (and are reported on below) are NOT areas of my expertise, so most of what I present below reflects only what I learned at the Conference. Some of the information may be incorrect. Subjects covered:

Block Chain, Supply Chain and Crypto Currencies Data Protection and Privacy Brexit
Bribery, Money Laundering and Art Cross Border Evidence Sharing NAFTA
Employment and Domestic Relations Law Arbitration Ethics
Regional Conflicts Election Manipulation

The biggest development covered was the EU’s General Data Protection Regulation (GDPR) and the coming conflict between it and the new US CLOUD Act. Americans and Europeans see personal data from very different points of view, although Americans are now – thanks to Facebook and Data Analytics – beginning to move towards the EU position. Similarly, the US wants more local content under a revised NAFTA, but Canada has just adopted TPP trade treaty, which will permit more Chinese content. Long term, block chain will have the biggest effect. On a cultural note, the French marriage and estates attorney got me to watch Johnny Hallyday on YouTube. If you do not know him, you will thank me. I understand why he is a French hero, despite being Belgian and a (now former) resident of California.

SUMMARY

BREXIT – UK attorneys are doing their best to minimize the negative effects of Brexit on the British legal establishment. Other European law centers treat Brexit as a “gefundenes Fressen.” [A bit like own goal.] Brexit increases uncertainty and raises costs of cross-border transactions, particularly financial and trade.

NAFTA – The German auto industry holds off making investments in Mexico until North American trade has been clarified. It would take 3-5 years for North American auto manufacturers to change their supply chains to comply to a more restrictive NAFTA. In the meantime, production would move from Mexico to Southeast Asia. Canada’s adoption of TPP (Pacific trade) moves Canada away from President Trump’s demand for more US content. Elections in Mexico and the US and US legislative procedures complicate any quick amendment to NAFTA.

TECHNOLOGY – The US government treats crypto currencies as legitimate assets. Money transfers involving countries without first world financial structures can be sped up substantially and avoid corrupt bureaucrats.
Under the GDPR, law firms face new obligations regarding the client data they collect. Lawyers engaged by a lead firm may also have to comply. Attorneys admitted in multiple jurisdictions must comply with several sets of laws and ethical obligations.

Some Canadian lawyers do not store any client data in their computers or phones due to intrusion by border control agents, including confiscating the devices and holding attorneys who decline to give passwords. These lawyers leave the information in the cloud.

BIG DATA – A Ukrainian speaker claimed that drones photograph soldiers’ faces, match them to social media photos and then track down family members for reprisal. Data (including personal data) is often stored in many different countries. (The film camera of the 19th century was also considered to be an intrusion on privacy.)

BRIBERY – International enforcement of anti-bribery laws has increased, despite President Trump’s policies.

ART – Due to greater restrictions on money laundering, art becomes a more frequently used means of transferring and hiding wealth. The art market is anyway known for its confidentiality. Tax laws encourage evasion and fraudulent valuation. New York City is opening an art “freeport” to compete with Zurich, Singapore and China. Destruction of cultural heritage is now prosecuted in the ICC as a war crime.

EVIDENCE – The internet means that evidence of criminal conduct may be stored in many countries besides the one where the crime was committed or the criminal resides. Traditionally, sharing evidence between countries was very slow. The US recently enacted the CLOUD Act which should speed up the process, so long as the requesting country has entered into a treaty with the US. How will the CLOUD Act interact with the GRPR? The two laws seem to have been adopted without any consideration for each other. [This is typical of the US.]

ARBITRATION – Lawyers often draft sloppy arbitration provisions at the last minute. Post Brexit London may lose significance an arbitration center.

EMPLOYMENT – Foreign employees sent to the US may be subject to state taxation even if exempt from federal. When sent to Europe, they may be entitled to benefits and extra payments not due them in the US.

DOMESTIC RELATIONS – Law varies greatly from country to country on how marital property is owned, shared and divided. Some countries do not have marital property regimes at all. The way pre-nuptial contracts are handled varies greatly. Some panel lawyers argued for having one will for each jurisdiction and another [Mexico] said that was very dangerous. Trusts are less helpful today and some countries use corporations and the issuance of shares to accomplish a similar purpose. The use of social media in domestic disputes differs greatly from country to country. The Johnny Hallyday estate battle [California vs. France] will make interesting reading.

ELECTIONS – US election mechanisms are outdated and subject to easy interference. A foreign entity may not want to elect a particular candidate so much as create distrust in democracy generally. Although each US state has its own voting officials, elections are really run by the company which supplied the voting equipment and software. State procedures intended to assure proper vote counts are often ignored. Of course, the US has been “interfering” with elections and political processes in foreign countries since the end of WWII.

REGIONAL CONFLICTS – The German ambassador to the UN argued for use of troops from neighboring states in domestic unrest (like Mali and possibly even Venezuela). [Given Germany’s history with its neighbors and the US with Latin America, this suggestion did not persuade me.]

DETAILS

BREXIT

This subject has monopolized British front pages for 18 months. Of course, none of the panelists knows what the outcome will be, so we witnessed a mixture of jokes, attempts to take advantage of the uncertainty and brave British faces. One term heard was “BRINO” – Brexit in name only.
At the end of March 2019, the UK will be out of the EU. There will be transitional rules from 2019 to December 2020.

What effect does Brexit have on existing contracts, such as swaps and derivatives? It is not likely an excuse for a party not to perform its obligations or to terminate the contract. But Brexit MAY result in a ratings downgrade or reduce the value of a contract. Lenders could call for more collateral. New contracts will likely have “Brexit provisions.” If the parties are in the EU but the UK is not, why would the parties apply UK law? The UK representatives argued that UK judges and courts still bring added value to transactions. The UK has a special “financial list” of judges with special expertise. It also has a special court with the capability to answer a sophisticated financial question which is not the subject of a dispute.

If contracts refer to the EU, such as in territorial definitions, permitted territory or non-competition, what is the result? Tariffs and cross-border transfers are likely to generate more costs. Which party bears them? Customs inspections also increase costs. If costs are tied to labor indexes, will the UK exit affect those?

The UK has adopted GDPR and added some stronger safeguards, so data exchange should not be affected.

As to the reason for Brexit, continental Europe viewed the EU as a method of avoiding war. The UK viewed it from a strictly commercial standpoint. Of course, the election results were not expected.

Non-commercial aspects of the change include security, intelligence sharing and police cooperation.

The Irish border is a special problem. Goods flow freely across that border today. To erect a new border would violate the Good Friday Agreement. [I have read separately that some observers fear the new customs stations would be a target of renewed terrorism.]

NAFTA

North American trade law directly affects Germany because of substantial auto production in Mexico and Canada.

The United States is moving away from the post WWII structures it established and from a rule of law to a power-based system. The US proposal for a 5-year sunset on any NAFTA arrangement creates instability and reduces investment.

The Republicans want a quick deal, so they can campaign on it in November. But Mexico has a Presidential election in July which will slow the process. Even once agreed on in principle, any legislation will take months to pass due to congressional procedures and waiting periods.

President Trump has focused on blue-collar manufacturing jobs, but agriculture and services (banks, insurance) are also affected. Mexico could benefit from any restrictions China puts on food importation from the US. Trump’s trade priorities are quite different from those of the Republican Congress.

The possible outcomes are 1) a revision of NAFTA, 2) NAFTA’s staying the same, 3) NAFTA’s termination and 4) least likely, a shift to TPP as the focus.
If auto manufacturing is reduced in Mexico, it is not likely to move back to the US. China and Southeast Asia are more likely areas for investment. The same applies to textiles presently made in Mexico.

Mexico’s elections will put pressure on its government to be “treated fairly.” The left of center candidate [Andres Manuel Lopez Obrador] has a large lead in the polls. Tensions between the US and Mexico have increased, and this can have negative effects on cooperation generally – crime, drugs, immigration. [If US policies disrupt the Mexican economy, we know where Mexicans seeking better opportunities will come.] US policies have the indirect effect of stopping German and Japanese investments in Mexico while the situation stabilizes.

Many NAFTA points HAVE already been tentatively agreed on. Democrats in Congress will have a hard time voting for any Trump trade policies, so any legislation will have to be an all-Republican bill. There is the danger that the Democrats will take back Congress in November, so Republicans will push for a pre-election vote.

From the Canadian perspective, there are many points unsettled, including government procurement, dispute resolution, the sunset proposal, de minimis provisions, market access for agriculture and textiles. Due to all the procedural requirements built in to trade legislation, including a 90-day waiting period, the timing is very difficult. The most likely period for passage is during the US “lame-duck” period after the elections but before the new representatives take office. If the left-wing candidate Obrador wins in Mexico and the Democrats win in the US, labor and environmental provisions would become more important. NAFTA does need to be updated.

Investor-State Dispute Settlement (ISDS) is also a major point. Congress and US industry are for ISDS, but President Trump is against it. The alternative is state-to-state dispute resolutions, but businesses know political factors can argue against the US government’s pressing private claims. ISDS takes the state out of the process and so de-politicizes it. Furthermore, President Trump even wants to weaken the state-to-state process and have only “advisory positions.” Another US goal is the free movement of data across borders. This goal is contrary to the trend in Europe.

Initially NAFTA revision included labor and data mobility, but these aspects have become secondary or even forgotten. Mexico does not expect any changes here.

There was talk in the US of revisiting TPP, but any US involvement is now unlikely. The current TPP treaty left out many of the aspects President Obama wanted. So, Trump would be lucky to get those aspects back in. Japan does want the US to be in TPP. In the meantime, Canada entered a free trade treaty with the EU and 98% [?] of Canadian-EU trade is duty-free. So, Canada sourcing from Europe is increasing.

Areas of focus between Canada and the US are autos, aircraft, softwood, ores and metals, chemicals and dairy. On some of these points, Canada knows it has to make concessions and the question is how much, not whether. But if the US pulls out of NAFTA, there are pre-existing trade rules and treaties which go back into force automatically.

Many of the Canadian proposals for NAFTA come from TPP, which Canada has adopted, Mexico too.

Without NAFTA, no car maker in North America could make cars as it does today. It would take 3-5 years to change the supply chain. Some parts cross borders 4 times before being integrated into the final product.

US financial and insurance companies sell a lot of services into Mexico, including managing Mexican retirement funds.

The US is anti WTO dispute settlement. The US feels it wins rights in the treaty but loses them before the WTO.

The US also resents having to compete with foreign state-owned enterprises (SOE’s) and does not like the people who sit on WTO dispute panels.

The Chinese ambassador to Canada said in a speech that President Trump was “looney.” This kind of talk is quite unusual. [I found this quote confirmed on the Globe and Mail website but each time I found the article, I was immediately blocked. Did President Trump exercise his right to be forgotten?]

Given the time frame, the likely outcome is to win a few points on NAFTA and declare victory. A thoughtful updating, which is necessary, is unlikely.

NOTE: Many panels dealt with technology, data, privacy, blockchain, crypto currencies and they are lumped together below.

BLOCKCHAIN

Blockchain technology replaces trusted intermediaries in transactions. There is often no need now for a central clearinghouse and associated fees and delays. The parties deal directly with each other. In blockchain, every person has a unique identity. Each entry confirms the identity and the time. This information is distributed across the ledgers of several members.

In trade and supply chains, each item is uniquely identified, and each step is time stamped. Access to the information can be limited to specific parties. The location of the goods can be determined by GPS. Documents can be attached to each entry – although the system is not suitable for 200-page acquisition agreements or lengthy representations and warranties. The more appropriate system now is the “smart contract” which is a list of the actionable steps envisioned in the longer contract. When are goods loaded; where are they shipped; what happens next? Once the final step is achieved, payment occurs automatically. The speed of processing these transactions permits faster payment and so reduces the cost of capital. A bail of cotton shipped from Texas to China is paid for the moment it arrives in China, for example.

IBM and Maersk have formed a joint venture. Its information is based in the IBM cloud. IBM has no proprietary control over it. It is based on open source “hyper ledger fabric.” Its purpose is cheaper supply chain management. In the joint venture, unlike block chain, the players are not anonymous.

Besides location, the sensor can report temperature and humidity (for example). Markers can be radio frequency identification devices (RFID) or popcode or QR codes.

Software is often used already in trade, but with bad results if the programmers do not understand the law. There are many examples where the programs produce incorrect results. The interface of the computer memories may not comply with the law – such as the requirement that records be kept for 6 years. A 3rd party provider may not be able to find the records. Software has to be updated when statutes or regulations or even court decisions change. It is likely that governments will want access to the blockchain, detailed information and not all shippers and processors will want that. Some of the blockchain applications can be loaded on iPhone, so even lesser developed countries can access the technology.

A Canadian border official inspected an iPhone which had a program that deleted information. The official held the owner for 8 hours. [Americans consider their customs and border control agents to be overbearing. For example, the Delta French apple fine.]

https://www.cnn.com/2018/04/23/us/apple-delta-fine-customs-flight-500-trnd/index.html

CRYPTO CURRENCIES

Crypto currencies depend on blockchain but are not the same as blockchain.
Bitcoin is treated like any other asset by the US government. When it sells forfeited assets, it includes Bitcoins along with motorboats and fancy cars.

Cryptology is essential to the value of cryptocurrencies – if the formula and procedures are defeated, inflation by introduction of “counterfeit” currency can erase the currency’s value. [However, the expense of undoing blockchains is a significant safeguard. To change an existing blockchain, each prior blockchain entry back to the “Genesis entry” has to be changed and requires 10 minutes of computer work and the agreement of over 50% of the computers in the network. I wonder about easing and tightening of currencies, as normally done by central banks.]

Government factors involved in such currencies include anti-money laundering, terrorism and KYC (know your customer) obligations. How are currency gains taxed? How does the government get information available to it with normal currencies?

In countries in which citizens do not trust their governments, putting wealth in such currencies may be reasonable and legitimate. China has made payments to African entities using bitcoin, in part because some countries do not have 1st world financial networks. Such payments also can bypass corrupt government officials.

Attorneys may be paid in crypto currencies, but the same rules apply as with payments in cash.

BIG DATA

Artificial intelligence (AI) has dramatically changed in the last 5 years. 5 years ago, AI learned the game Go by studying human game results. It then played a human champion and won 4 of 5 games. Recently AI taught itself the game – without human examples – and beat the old AI champion 100 games in a row.

A Ukrainian panel member claimed that drones took pictures of soldiers, using facial recognition and social media identified the soldiers and then located their family members for attack.

Many websites run data collection programs in the background. Can a cell phone user understand what is happening?

The Max Schrems suit against Facebook involved determining where his personal data was stored. It had been transferred to the US and so – under the new GDPR – will be subject to higher privacy standards. Often a person’s data may be stored in many different jurisdictions, including information which to a normal person seems to be one data package, like an email or photo. Different data companies store data differently. Taking “meta data” seems relatively harmless but it shows who is connected to whom. The post 9-11 Bush administration took this data for “security” purposes.

There was never a golden age of internet privacy. An earlier example is the use of tiny cameras to take pictures without the subject’s knowledge. [Germans living in small towns know there are no secrets. Pittsburgh is similar.]

Compared to private companies, governments have greater power but fewer people focused on the average citizen. Private companies are much more focused.

DATA PROTECTION – GDPR

The GDPR is a BIG deal. It goes into effect May 25, 2018. Potential fines will be very large and painful. Very minor cross border contacts may still subject the business to GDPR rules and risks. Not just internet companies need to pay attention. For example, law firms need to comply. Clients and contract partners may require others to certify that they comply with GDPR. [The complexity of GDPR prevents me from trying to describe it and EU readers are already quite familiar with it. Few Americans have heard of it.]

PRIVACY

Americans and Europeans have very different concepts of privacy. The UK in particular [which most Americans think of as being similar to the US] has quite different views from ours. In the UK, there must be an overriding public interest for private things to be made public. The Queen’s having a private account in Panama was not viewed as being newsworthy. Can a libel claim be inherited or does the claim die with the person claiming to have been libeled? In the UK, libel law was developed to reduce deaths due to duels. There, even famous people doing everyday things in public can be sure their pictures will not show up in public. The exception is the “red carpet” rule. By contrast, in the US, a PR agent will call the press and tell them where some would-be movie star will be eating dinner. Paul Weller won minor damages due to the publication of California photos made of his teenaged daughter. In the US, the place where the person was resident can be determinative. Marilyn Monroe was found to have been a resident of New York at her death and so had no posthumous right of publicity. [A 2012 case.] IP rights are different, and some individuals register their names and images to protect them.

Facebook’s invasion of privacy has been noted, but Google collects many more times the personal data.

Generally, the US is more interested in technology and the EU in privacy, but some US states are beginning to follow Europe.

Oddly, old Americans assume anyone can find their phone numbers – they grew up with phone books – but young people consider that information private.

The right to be forgotten means the right to defeat certain search engine results, NOT the right to have the information itself deleted. It is just harder to find.

Post conference I found the following report on Madonna typical of US attitudes on privacy.
https://www.nytimes.com/2018/04/24/arts/music/madonna-tupac-shakur-letter-auction.html

And Facebook faces ever greater criticism, moving the US closer to Europe in some regards.
https://www.nytimes.com/2018/04/24/business/economy/facebook-privacy.html

ATTORNEY ETHICS and GDPR

New privacy laws apply to law firms, to partners and to their subordinate colleagues. Do a law firm’s service contractors have access to protected information? A foreign lawyer who is also admitted in a US jurisdiction has to comply with both sets of obligations. The geographical scope of these rights and regulations is much greater than with the previous “safe harbor” rules.

If a lawyer engages a lawyer from another law firm, the first lawyer may need to get the 2nd to explicitly agree to comply with the GDPR. Attorneys should collect the minimum data of the client needed to deal with the project and to hold the data only for as long as needed. This is contrary to the impulse of most attorneys. The client has the right to have the attorney delete all the data. The law firm may have its own, legitimate reasons for keeping the data, such as for defending possible malpractice claims. If a data security breach occurs, the law firm has 72 hours to report it.

Some jurisdictions [Brazil was the country discussed] have almost no rules on data privacy. Brazil’s constitution does include a strong right to client confidentiality.

Attorneys traveling in and out of Canada have a particular problem. The Canadian Border Services can take an attorney’s iPhone or laptop and go through it. If the attorney resists, the police can take and keep the device. Canadian lawyers generally do NOT travel with laptops containing sensitive client information. They access their clients’ data in the cloud.

ART

Legal issues involving art include fraud and money laundering. Banking regulations to prevent money laundering do not [yet] apply to art. There is no government regulator of the art market. The art market is full of intermediaries and confidentiality. Other factors in the art market include tax havens, freeports, tax benefits and private museums.

Art has similarities to crypto currencies because they are both means of hiding wealth.

Hiding wealth in Cayman Island bank accounts – those days are over. If wealth is put into a trust, the ultimate beneficiary must be disclosed.
Art CAN still be used to evade taxes. In some European countries, tax authorities now do a physical inspection of the decedent’s home(s) to inventory art. However, there is no registry of art ownership and it is difficult to value.

New York City is a major world art center, but it imposes an 8.8% sales tax. Galleries used to ship art and jewelry outside New York to avoid taxes, but schemes involving empty boxes and crates (supposed to contain art or jewelry) got to be well known. The Aby Rosen [a client of my office when he first came to NYC] tax avoidance case was discussed. He ultimately paid the tax. Other examples are Alec Baldwin and Michael Shvo.

Much art is donated to art museums for the resulting tax deduction. Many newer museums get 80% of their collections through donations. 1/3rd of art donated was valued at 3x its actual value. In Canada, the credit is 100% the object has cultural significance. The question is what is culturally significant. A Canadian collector bought works by Annie Liebowitz for $4.8 million and then claimed a donation value of $20 million.

Freeports were developed in the 19th century to store grain. Now they store art. Switzerland, Singapore and China are major freeport centers. New York is developing an art freeport in Harlem. Delaware already has one.

Certainly, people involved in today’s art market argue against any additional government regulation of the market.

Often the art buyer and seller are unknown to each other and only the agents meet. Some reasons for anonymity are the shame of having to sell, family dynamics or fear of being targeted due to wealth. Some collectors know that publicity will bring further attention. On the other side, secrecy creates a loss of the history of the art.

Common litigation involves fraud or misunderstandings as to the financial terms between the seller and his or her agent. How much may the agent keep from the sales proceeds? Cases are Accidia v. Dickinson, Schulhof v. Jacobs, and Aldi Achenbach – which resulted in criminal penalties. EU anti-money laundering legislation is likely.

A Christie’s representative said Christie’s does frequent checks on the activities of its major customers and stolen art registers. They also require representations from their sellers. They check 20 databases for Holocaust related claims. They prohibit 3rd party payments or payment in cash over $7,000.

However, many galleries and dealers are much smaller than Christie’s and Sotheby’s and will have a hard time implementing sophisticated controls. Imposing these requirements would help the big houses.

Indiana GOP Congressman Mark Messer is drafting legislation on money laundering which would also affect art transactions. Certain reports would also be required of art dealers. In contrast, France already has money laundering laws applicable to art and galleries.

The US has civil forfeiture laws (19 USC Sec. 1497) which apply to art and other precious objects. Bringing such items into the US without declaration subject the owner to their forfeiture. The government does not have to prove knowledge or intent. There is no “innocent owner” defense.

Forfeiture also results if the value of the object is substantially understated.
High profile cases include a moon rock original given to a Central American country and Ka Nefer Nefer, an Egyptian mask which the St. Louis Art Museum refuses to return to Egypt. ISIL is looting Syria and other areas and selling ancient treasures.

A problem in identifying stolen art is that many museums are small and have poor descriptions and photos of the missing items. Not long ago many small, country French churches had valuable art but no records or controls.
Several recent cases involved attempts to sell to undercover FBI agents. A Panamanian escaped prosecution because he had diplomatic immunity. The US federal government may have jurisdiction if the object crossed state lines. This was the basis for prosecution of a researcher in the Vatican library. In another case, a person broke the thumb off a Chinese terracotta warrior and took the thumb home from the Philadelphia museum to his home in Delaware.

Despite much better cooperation among governments, Italy is home to important information sources which do not cooperate.

New York also has its own statutes governing art. One statute is focused on “fences” of less exotic things of value, but it also applies to art dealers. It presumes the seller has knowledge of its source if the dealer is in the business of selling this sort of object. The dealer must have made a reasonable inquiry.

Stolen art is often connected to other crimes and money laundering.

France has extensive laws regulating art and its exportation. It adopted new regulation in 2017, going into effect in 2019.

The International Criminal Court has recently begun prosecuting people as war criminals for the destruction of cultural sites. Al Mahdi and Al Hasan were convicted and imprisoned.

Art authenticators have been sued by disappointed art owners. The French courts now protect these experts under “freedom of expression” theories. If the provenance of a piece there is in question, no authentication will be offered.

CROSS BORDER EVIDENCE

Traditionally, crimes were committed in one country, with evidence in that country. Now evidence can be in other countries or in the cloud. How do prosecutors get digital evidence? Some require local servers to disclose it. Some hack the server. Some have arrested the employees of the server owner. Companies providing storage services have real difficulties balancing various inconsistent laws, protection of their brand and balancing of privacy obligations. Microsoft litigated a dispute which involved a US request for data stored in Ireland. Before a final decision could be reached, the CLOUD Act was passed. (Clarifying Overseas Use of Data Act).

The mix of variables includes 1) the location of the server owner, 2) the location of the data, 3) the citizenship of the person whose data is sought, 4) existence of a treaty, and 5) privacy and other laws of the countries involved. [A matrix of variables would have been helpful.] The US will force a US server owner to comply with a foreign government’s request in some instances. A series of bilateral treaties is expected, giving non-US governments rights under the treaty and the CLOUD Act. The UK is expected to be the first of many countries to enter these treaties. If a foreign government meets US standards, it can become a Qualified Foreign Government. If US compliance would violate a foreign law, then the service provider can challenge the warrant in US court. The initial determination on compliance is by attorneys for the service provider itself.

The CLOUD Act includes a complex formula as to when another country must be informed about a request for information. If a country has not entered a treaty with the US on the subject, it is not involved in the screening process. So, the US expects to enter a great many such bi-lateral treaties. Despite US “lax” protections of privacy (by European standards), US law provides greater protection from government snooping than most foreign laws. In light of governmental abuse of power in many countries, US service providers might want to give its customers notice of such requests.
Under the old Mutual Legal Assistance procedure, foreign governments could not come directly to the US service provider. Under the CLOUD Act, they can if they are parties to a treaty. The US Attorney General is empowered to certify whether the foreign government provides minimum legal protections to its citizens. A panelist questioned whether Egypt or Hungary could expect such certification. A foreign request about a US citizen would not fall under the new Act.

Real time “wire taps” are also possible but the US does not permit them absent extreme circumstances.

Integrating the CLOUD Act with the GDPR will be interesting. Also, the EU has a non-discrimination principle as among all EU members. Can the US certify one EU country and deny similar rights to another? Indeed, the GDPR may prevent EU member compliance with the new US law.

Each service provider has its own protocol as to where customer data is stored and whether it is all in the same place…or whether it is moved. Often the same information is in more than one location.

OECD ANTI-BRIBERY CONVENTION

In the 1990’s only the United States had anti-corruption legislation and it was seldom enforced. Today, governments have become much more willing to support the criminal investigations of other countries. The US government got very good cooperation from the German government in the US investigation of Siemens, for example. The speed of response has improved. Earlier, cooperation was pursuant to a “mutual legal assistance request” [mentioned above] and getting the information might take months or years. Under President Trump, anti-corruption efforts may be a lower priority.

Failure of companies to have adequate internal controls is a strict liability violation.

ARBITRATION

Arbitration clauses are often added to contracts as an afterthought, just before signature. Many clauses make little sense, are contradictory or give authority to some entity which does not exist. Some entities often engaged in litigation prefer civil courts if the courts’ decisions provide valuable precedents. However, juries are generally avoided. Look for the arbitration agency’s model clause as a start, with some additions possible, such as the subject matter qualifications of the arbitrator(s). London has been a center of arbitration, but BREXIT may affect this. Certainly, lawyers from continental cities are using BREXIT as a reason not to arbitrate in London. The UK will, however, remain a party to non-EU treaties regarding arbitration and enforcement.

If a contract has been performed or the term expired but a dispute arises, does the arbitration provision survive?

EMPLOYMENT [Most of this is well known.]

When sending an employee into a foreign jurisdiction, don’t assume he/she will have only the rights granted in the home country. For example, the employee may have rights under the new country’s laws to a 13th and even 14th month’s salary. Does the employee create a “presence” for his/her employer in that country? Do overtime rules protect the employee? Health care, parental and health leave, vacation rights and retirement. Also, rights to inventions. Severance? [Years ago, I learned that a German manager sent to the US by the German mother company may – wrongly – assumed that the German standards of sexual harassment still applied to him, at least when dealing with other German employees in the US.]

US federal and state income tax rules may subject the employee to tax obligations. Some states are more aggressive than the federal government.

DOMESTIC RELATIONS

In some jurisdictions, a prenuptial agreement is a physical part of the marriage certificate. The UK does not provide for property regimes. In the UK, all the property is put in a pot and divided.

The French expert mentioned the current Johnny Hallyday estate, with California and France having an interest. Hallyday left all his estate to his last wife, disinheriting his grown children, a result not permitted in France.

Some attorneys recommended having a separate will for each jurisdiction where the testator had property, but in Mexico, having more than one will is a problem.

France [as common in civil law countries] does not recognize trusts or foundations. The Chilean solution is to enter a prenuptial. Trusts do not assure privacy in the UK. There a judge can demand disclosure and can change the trust terms. Chile also does not recognize trusts. It has forced heirships. The solution in Chile is to form a company and issue shares to the potential heirs. In Mexico, trusts are expensive because they cannot exist without a bank, and bank fees are significant.

Divorce lawyers use social media as evidence. However, nasty posts about the spouse can be used as a basis for finding that the posting partner is at fault. Immigration also looks at an applicant’s social media. Mexico and Chile are restrictive as to its use. France also has broad privacy laws.

Citizens of some countries enjoy rights under that country’s law regardless of their domicile.

Laws regarding a lawyer’s obligation to check the source of payment for large purchases or for his/her fees vary greatly. Some countries do require investigation and reporting; others, not.

ELECTIONS

Separate from influencing voter attitudes, election mechanisms themselves are subject to several sorts of electronic interference including disruption of voter registers, unauthorized collection of voter information and counting of election results. Voting rights are a matter of state statute and administration. The actual voting mechanism is run more by companies which provide the equipment and software than by elected officials. The statutes are often ignored. For example, officials are supposed to print out and sign a so-called “zero tape” showing that there are no votes registered in the voting machine the morning of the election. In fact, the tape is often printed out days before the election, in private, and presented for official signature on the day of the election. This is no control at all. Ballot boxes are supposed to be sealed in public, to control against stuffing the box. This is not done. No election commission has an IT department; many election computers have no basic firewalls.

States claim that their election mechanisms are decentralized, but in fact the results of many voting sites are often collected to one location, often outside the voting state. States claim that their methods are diverse and therefore strong. But that may mean that the least protected of the methods presents an entrance to outside influence. And that one, weak election device, once manipulated, may change the result of the election. One does not have to affect every jurisdiction to win an election.

The panel members argued about whether issuing “provisional ballots” to voters whose votes were initially rejected was an adequate remedy.

The goal of the US voting system is to pick a winner of the election. The goal of a foreign government may not be to affect the winner but rather to undermine confidence in the whole system and in democracy in general.

Attitudes about electronic voting differs between generations, with younger voters being convinced that it is easy to change their votes and so preferring paper ballots.

After the Bush-Gore election debacle, the US passed the Help America Vote Act. It provided no standards but gave states money to upgrade their voting systems. However, they quickly bought old technology. So today, lots of voting equipment is out of date and finding replacement parts is impossible.
One of the panel members conducted a “shodan” search about the time of an election and found easy access to the voting lists held by seven secretaries of state.

Election systems are generally not connected to the internet during the election but rather connect only when the votes for the particular site have been counted and the results submitted to a central location.

There is no time to correct these weaknesses before the US November 2018 elections, reducing the legitimacy of those results.

Russia has effectively created distrust in our election system but the US Congress has made the distrust worse.

As to Russian mis-information, Russia does not have to post it on US sites or pretend to be American. Americans will find the posts and then repeat them.

Russia has been interfering in foreign elections for decades. But the United States has too, including assassinating foreign leaders and sending cash to the opposition. Putin is convinced that Hillary Clinton tried to get him voted out of office and she supported demonstrations against him. The New York Times wrote an article on the long history of US efforts.
https://www.nytimes.com/2018/02/17/sunday-review/russia-isnt-the-only-one-meddling-in-elections-we-do-it-too.html

REGIONAL CONFLICTS and RULE OF LAW

The German Ambassador to the UN Christoph Heusgen was a member of the panel. His main message was that regional violence should be handled by troops from that region. German troops are in Mali, but do not speak the language of the residents and are generally inappropriate. [This position ignores local rivalries and histories of prior conflicts, something very familiar to Germans. The US would have the same problems with US intervention in Central and South America.] Ambassador Heusgen argued that any action regarding Venezuelan societal collapse should be handled by its neighbors.

Violation of international law does not bring punishment as would a normal criminal conviction, but the threat of international condemnation may affect the way a state shapes its actions – so as not to clearly violate international norms. [President Trump may have shaped the US (French/UK) military response to the Syrian use of chemical weapons to be able to argue that it conformed to international norms.]

Germany in particular has a constitutional obligation to act in accordance with international law. But to get the 28 NATO members to approve a response would take months.

The post-World War II international structures put constraints on the national participants. A state had to believe that those constrains were worth it. Now that belief is being questioned. Humanitarian intervention has no agreed-on standards. Countries fear any definition could be used to justify action against them.

The United States is a party to over 10,000 treaties. Even under Jessie Helms (very anti United Nations Senator) we entered 23 treaties a year. Under President Obama, we entered 2-3 a year. Under President Trump, we have not entered any.

Some standards of international behavior arise from non-treaty sources. For example, international corporations try to protect their brand image by good behavior, including that of their suppliers. The US Foreign Corrupt Practices Act was a public-private initiative to protect human rights. Some standards arise from the G-20. Some government programs incentivize businesses to create jobs in lesser developed countries. So, some of these pressures to conform do not come from states.

International law tends to support national integrity. Recognition of Kosovo as a separate nation concerns Spain (Catalonia) and Canada (Quebec). [Even Texas and California talk about leaving the union – albeit not seriously.]

In earlier decades, developed countries would let a corrupt or violent ruler abdicate and keep the millions he had stolen to enjoy in exile. Today, the impulse is to bring him to justice, making abdication more difficult. States and NGO’s gather evidence today for use against dictators decades hence.
MISC.

A US government lawyer said that in 2001 his group assumed that Guantanamo would be closed long before 2011.

The internet makes the old Westphalian nation state, with fixed borders, irrelevant.

One panel member focuses solely on fashion law. Are his clients concerned he might inadvertently share trade secrets or they might pay for work which he might then use to benefit competitors? I recall an accountant at a big accounting firm told me that VW did not need to hire Jose Ignacio Lopez away from GM. VW could have just hired the accounting firm and gotten the same information for less than GM paid.

Almost no German speakers were present at the conference.

Not surprisingly, many of the jokes were at President Trump’s expense, despite his domestic relations involving two Europeans and his close financial relations with a major European country.

Compiled by
Rob Houck
rhouck@rhoucklaw.com
001 914 434 1710
April 25, 2018

Establishment and Maintenance of US Subsidiary

EATON & VAN WINKLE LLP

FORMATION AND MAINTENANCE OF A U.S. SUBSIDIARY CORPORATION

The formation of a U.S. corporation is faster, easier and less expensive than the formation of many types of companies with limited liability under other legal systems. However, the special characteristics of U.S. corporations are still important to their proper operation.

CHOICE OF LAW. A U.S. corporation is formed pursuant to the law of a particular state. This means that the party forming the corporation can select from among 50 states and the District of Columbia. In contrast to many countries, there is no nation-wide, unified corporation law. A corporation is often formed pursuant to the law of the state in which it will have its main office. However it can also be formed pursuant to the law of any other state. This is possible even if the corporation has no connection to the state of incorporation. Here the state of Delaware deserves special mention. While the differences among the 51 corporate laws are generally minor, the law of Delaware still plays a special role. Its use for the formation of corporations is particularly widespread. Delaware law is “user-friendly” and the state tries to attract the formation of corporations. Delaware judges are especially experienced with questions of corporate law and in particular with the legal relationship and duties between management and shareholders. This special expertise plays a minor role in case of a 100%-owned subsidiary, but even such subsidiaries enjoy another advantage, namely that U.S. lawyers, wherever they practice law, are generally quite familiar with the corporate law of Delaware. The general commercial law of Delaware does not offer this same advantage.

The concept of “corporate headquarters” has little importance in the U.S. legal system. The movement of the headquarters is not a significant legal event. One minor exception is with respect to so-called “foreign” corporations. A corporation must register itself as a “foreign” corporation in a U.S. state if it has an office, property or employees in one state but was formed under the law of another. The designation “foreign” corporation has nothing to do with its possible formation pursuant to the law of some other country. For example, a corporation formed under the law of Delaware but operating in New York is obliged to qualify as a “foreign” corporation in New York. For internal questions, the law of the state of formation is applicable.

FORMATION. The formation of a U.S. corporation is very simple. It can, if necessary, be carried out in a day. The formation procedure is as follows:

  1. First, the name of the corporation and a few alternatives should be determined. The name itself can be fanciful and need not indicate the actual activities of the corporation or the name of the owner. An important part of the name is the word “Corporation” or “Incorporation” or “Limited” or an abbreviation of one of these words. Without one of these words, a creditor can claim that the shareholder of the corporation is liable without limitation for the obligations of the corporation. In selecting a name, the shareholder should be certain that it is not already used by another firm. This applies both to the state in which the corporation will be formed as well as the states in which the corporation will operate and be registered as a “foreign” corporation. Some words, such as “federal,” “bank” or “insurance” can be used in the name only in limited circumstances. Some few words cannot be used at all. These vary from state to state. A proposed name, if available, can usually be reserved for a limited period by payment of a small fee.
  2. Next, the “Articles of Incorporation” or the “Certificate of Incorporation” – they refer to the same document in different states – is prepared. Normally these are only two to three pages long and set forth the name of the corporation and the class(es) of stock. If the corporation is to have only one shareholder, the classes of stock play no role. A corporation can have almost any number of authorized shares of stock, for example 10 million shares. Nevertheless, the corporation may decide to issue only one share of the millions of shares authorized. The others are held in reserve and need never be issued. Shares of stock are normally issued in the name of the owner (as opposed to bearer shares). The Articles are signed by the incorporator and submitted to the Secretary of State of the state of incorporation. The incorporator need not be one of the intended shareholders and is generally unimportant. Often the incorporator is a lawyer or even a clerk or secretary of the law firm carrying out the incorporation. Assuming that the Articles are in accordance with the applicable law and the normally small fees are paid, the corporation is formed. Submission of the forms may be by telefax or email and are often handled by service companies, such as Corporation Service Company. The corporation usually has a corporate seal, but it is seldom used and has little importance.
  3. The incorporator then signs the so-called “Initial Actions in Lieu of Meeting of Shareholder.” In this document the incorporator names the initial “Board of Directors” and adopts the corporate “By-Laws” which are discussed below. This is the extent of the duties of the incorporator.
  4. The “Board of Directors” then approves some basic incorporation activities, such as approving the sale of stock to the shareholder(s), the opening of a bank account and, if appropriate, the registration of the corporation as a “foreign” corporation. The board names the officers of the corporation. With this step, the corporation is capable of action.The corporation next:
  5. Obtains its so-called “EIN” or “Federal Employer Identification Number” – a taxpayer number on the federal (as opposed to state or local) level. The number is issued by the Internal Revenue Service (IRS) and is a precondition to opening a bank account. If an officer of the corporation makes the call to the IRS, this number can be issued by telephone and the process can take as little as 10 minutes. But it can also take substantially longer if the IRS authorities are overworked and the telephone line is busy. In some forms, the EN is also referred to as a “tax ID.”
  6. Obtains taxpayer identification number on the state level.
  7. Registers itself as a “foreign” corporation in one or more states.
  8. Opens a bank account. This has become much more difficult due to procedures to discourage money laundering.

All of these steps except opening a bank account can, if necessary, be carried out in a matter of hours and cost in total perhaps $3,000 to $5,000.

CAPITALIZATION The U.S. legal system puts little emphasis on the question whether a corporation has been adequately capitalized or can fulfill its payment obligations. The goal of U.S. corporate law is more to protect the shareholders and limit their risks and not to protect the interests of the creditors. Therefore, capitalization plays a subordinate role. Every creditor has to determine itself the credit-worthiness of the corporation. If the creditor has doubts, it has to try to obtain a personal guaranty of the shareholder or demand a bank guaranty. To our knowledge, no state law sets forth minimum capital requirements of a corporation. However, to the extent the capitalization for the intended corporate purposes proves to be much too small and the corporation quickly goes bankrupt, these circumstances can serve as evidence of fraud. Also the reduction of capital and its repayment to the shareholders is quite simple. The capitalization itself is not registered anywhere and reduction of capital does not require a public notice. From a tax point of view, the relationship of debt and equity is more important. A rule of thumb is that the debt:equity ratio should not go beyond 3:1. In case of bankruptcy, the distinction between shareholder capital and loans will not be honored. Third party creditors will have priority over shareholder loans.

If a corporation is no longer able to pay its debts, it is not obligated to disclose this fact. It can continue its business until it either earns a profit or voluntarily requests bankruptcy court protection from creditors. A corporation goes into involuntary bankruptcy only if enough creditors having large enough claims request the assistance of the bankruptcy court in protecting their claims. The fact that a corporation’s balance sheet shows more liabilities than assets or that the corporation cannot fulfill its obligations as they arise is of little legal significance.

The par value of stock is also seldom important. The shareholder is personally liable up to the par value to the extent the shareholder has not paid at least this amount upon acquiring the shares. The corporation cannot pay back the par value of the stock to the shareholder without a special proceeding. But par value is often only pennies a share.

The number of authorized shares is significant only insofar as the corporation cannot issue more shares than are authorized. However, this number is easily increased.

As a practical matter, the parent corporation often capitalizes the subsidiary as follows:

  1. The parent corporation transfers enough funds to permit payment of the costs for the first six months. A portion of this sum is specified to be the purchase price of the stock. This amount covers at least the par value. The board of directors authorizes this transaction in a resolution.
  2. In the course of the year the parent corporation transfers additional funds as needed.
  3. Shortly before such a transfer, the management of the parent corporation consults with its tax advisor regarding the decision as to what portion of the funds should be treated as equity and what portion as debt.
  4. The Board passes a resolution in which the equity and the debt are determined and the details of the loan, in particular its amount, term and interest rate. As long as the corporation has only one stockholder, it is not important whether the increase in capital is evidenced by the issuance of further stock certificates. The sole stockholder owns all the shares in any event.

Note that some states tax corporations based on their capital and the corporation has to notify the state of such changes. The repayment of capital and the payment of dividends are significantly more expensive and complicated than the repayment of loans and the payment of interest. In some circumstances, the IRS will ignore the designation of payments as debt, treat it as equity and tax it accordingly.

FOREIGN CORPORATION. The registration of a corporation as a “foreign” corporation is already discussed in the Section CHOICE OF LAW The registration itself is very simple. As a result of the registration, the corporation must submit a tax return in the state where it is registered and, if indicated, pay taxes. The total sum which is to be paid is not necessarily greater than otherwise and could even be reduced. If a corporation is no longer active in a state, the withdrawal from that state is more complicated. If a corporation is active in a state, it must register there as a “foreign” corporation before it can appear before the courts of that state. In most cases it is possible to cure the failure to register. However the corporation may possibly have to pay a fine. Upon registration of a corporation as a “foreign corporation” it is subject to suit in the courts of that state.

ORGANIZATIONAL STRUCTURE OF THE CORPORATION. The organizational structure of a U.S. corporation varies from that of other countries in several aspects. Basically it has four sources:

  1. the law of the state in which the corporation was formed.
  2. the Articles of Incorporation or the Certificate of Incorporation.
  3. the By-Laws of the corporation.
  4. the resolutions of the board.

The law of the state itself gives the corporation a great deal of flexibility. So too do the Articles or Certificate and the By-Laws.

Usually only the following rules require special notice in the operation of a 100% subsidiary.

  1. If not all the board members take part in a meeting, they must either be timely notified – in writing – of the meeting or (before or after the meeting) waive notice.
  2. Enough of the board members must take part in the meeting to have a quorum. The number necessary for a quorum is at least a majority of the board members, but can also be set higher in the By-Laws, Articles or Certificate.
  3. Of those who take part in the meeting, at least a simple majority must vote for the resolution for it to be adopted and effective.
  4. A board meeting can take place telephonically, provided that all the members of the board can hear each other.
  5. Board resolutions can be adopted by unanimous written agreement in lieu of a meeting.A combination of a telephonic meeting and a written consent is not possible. A board member who cannot take part in a telephonic meting can however waive notice of the meeting and simply not participate. In this case, board resolutions can be adopted if a quorum takes part in the meeting.
  6. Contrary to English law, a board member may not give his vote to another by way of proxy or power of attorney.

In a 100% owned subsidiary, major disputes at the board level occur very seldom. One example could be if the President of the corporation is also a member of the board. To hold a board meeting to authorize the President’s termination can produce such a dispute. Note that the President does not have to be a member of the board.

The By-Laws often list a series of decisions which can be made only by the board. In other words, the officers of the corporation cannot make these decisions without the agreement of the board. These restrictions are valid, however, only internally. They are not publicly registered and are not effective to protect the corporation from obligations to third parties which an officer enters without authority.

Besides these internal, organic procedures and restrictions, a corporation can also agree with a third party, often a lending bank, to operate according to provisions set forth in a contract.

Contrary to the corporate legal systems of some countries, where one form of company is formed when it is small and has few owners and then is transformed into another form of company when it becomes large and publicly traded, in the United States both types of companies are usually simply corporations. In the United States, a corporation can start small, with only one shareholder, and then grow into a huge enterprise with thousands of shareholders, using the same legal form. The Securities Exchange Commission (“SEC”) regulates the additional complexities which come with size and many shareholders.

The transfer of shares of a corporation in the United States is usually quite simple. The owner must only sign the reverse side of the stock certificate and hand it over to the buyer or the buyer’s representative. In many cases the signature requires a bank guaranty or authenticity. The transfer is not noted in any official, public register. The whole procedure can be handled by the corporation itself.

Although the functions of the three corporate organs – shareholder, board and officers – are strictly separated, the same persons can play roles in all three organs. The shareholders have the greatest rights. In the final analysis, they can make all decisions regarding the corporation, but only indirectly. Usually the shareholders of a publicly-held corporation are interested only in the value of their shares and not in the policies of the corporation. This is different in the case of a shareholder of a 100% subsidiary. In either case, the shareholder elects the board of directors of the corporation. The approval of the shareholder is otherwise seldom required, for example in the sale of substantially all the assets of the corporation or the amendment of the Articles or Certificate. The shareholder cannot represent the corporation in its relations with third parties. In particular, the shareholders cannot sign contracts on behalf of the corporation, even if the shareholders act unanimously or all of them sign the contract. Such action could make them personally liable.

The areas of competence of the board of directors are similarly limited. Like the shareholders, the board – which may consist of any number of directors – cannot legally bind the corporation with respect to third parties, even in the case of unanimous action. The board acts only as an internal gremium and mainly sets the policies of the corporation. In this capacity, the board determines which contracts should be signed on behalf of the corporation. However a board member is not competent to sign the contract him or herself For this function, the board members elect and empower the officers of the corporation.

The officers are the persons who act on behalf of the corporation. They sign contracts in the name of the corporation. They may also be shareholders or board members of the corporation. However these three areas of competency are separate and independent of each other. Even the President of the corporation has no right to participate in meetings of the board. Of course the board may invite the President to attend the board meeting. In this case, however, the President still has no vote and may address the board only when requested. The President needs no special authority from the board for the daily

management of the corporation. But if he is to sign a material agreement on behalf of the corporation, he has to first obtain a board resolution.

The normal, minimum officers of a corporation are the President and Secretary. A corporation often also has Vice Presidents, Assistant Secretaries, a Treasurer and Assistant Treasurers. More and more often officers have the additional title “Chief Executive Officer” (“CEO”), “Chief Operating Officer” (“COO”) and “Chief Financial

Officer” (“CFO”), Other titles are seldom used and create uncertainty. The title “Managing Director”, “General Manager” and similar titles should be avoided. They do not have any clear significance in the U.S. legal system. The title “CEO” is actually only important if the corporation also has a “Chairman of the Board.” The question can then arise who the superior person is, the President or the Chairman. The title “CEO” provides the answer.

As noted, the board can consist of any number of persons. The number can be even or odd. In the case of a wholly-owned subsidiary, the number is not important. But if the corporation has two or more shareholders, then the size of the board can be significant.

Creating a committee of the board can be advantageous. The committee consists of one or more of the members of the board. If a member of the committee is not available – on vacation for example – a substitute can act in his or her absence. This person must have been named as the substitute by the board in advance, however. The board thereby gains flexibility but also gives up some control, at least as to smaller decisions which nevertheless require board approval – such as changes in banking relationships or automobile leases. The area in which the committee may act can be either large or small, as the board decides when setting up the committee. Multiple committees are also possible, with varying areas of competency.

To help assure that the corporation is respected as such (and not treated as an extension of the shareholder), it is best to hold at least annual meetings of the shareholders and the board. The shareholder should elect the board at least yearly. In the United States it is neither required nor normal for the board of a wholly owned subsidiary to approve the financial statements or approve the actions of the officers taken in the previous year.

Immediately after the shareholder’s meeting, the board should elect the officers of the corporation. If the corporation takes important action without board approval, the board can ratify the action after the fact.

As mentioned above, both “meetings” can be handled by unanimous written consent.

COMMERCIAL REGISTER. None of the 51 U.S. jurisdictions has a commercial register. As a general rule, it is not possible to tell, officially or unofficially, who the shareholders, directors or officers are of a corporation. The transfer of shares, the election of directors and the election of officers are not listed anywhere or publicized. This is also true as to the extent of authority of an officer. From these facts arises the question how a third

person can know whether the person with whom he or she deals has the necessary authority. The answer is somewhat complex.

In normal transactions of a corporation, the third person can assume that the President or Vice President has the necessary authority to act for the corporation. If this turns out not to be true, it is an internal matter for the corporation. The corporation is bound by the signature of the officer. It is another question whether the corporation has rights against the President or Vice President who acted without authority.

In the case of unusual transactions, the following steps can be taken to protect the third party against unauthorized actions by an officer.

  1. The contract itself can contain a representation and warranty of the corporation that the person who signs for the corporation has the necessary authority. However this representation and warranty does not help if the signer is the only manager of the corporation who knows about the agreement.
  2. The Secretary of the corporation signs the contract together with the President (or a Vice President). This way it can at least be seen that two members of management are informed of the contract.
  3. The Secretary of the corporation provides his or her certificate in which
    1. the officers of the corporation are listed,
    2. the signatures of the officers are confirmed,
    3. attached Articles of Incorporation or the Certificate of Incorporation are certified as correct (which can also be done more officially by the Secretary of State),
    4. attached By-Laws of the corporation are certified (which cannot be done by the Secretary of State) and
    5. attached resolutions approving the contract and authorizing the officer(s) to sign on behalf of the corporation are certified as correct.
  4. The law firm which represents the corporation can provide its legal opinion in which it confirms that the contract has been approved by the board and that the President (or some other officer) is authorized to sign. By such an opinion the contract partner is assured that the law firm has carefully examined the contract and the documents of the corporation and that the corporation cannot later claim that the President was not authorized to sign. The opinion can also cover other aspects of the contract.

SUMMARY. As noted above, one encounters countless differences between the U.S. legal system and that of other countries when forming and managing a U.S. corporate subsidiary. U.S. law can offer great flexibility, but one must still note that certain formalities have to be honored. This article is intended to make these differences easy to recognize and comply with.


Author:
Rudolph S. Houck

Partner
Eaton & Van Winkle LLP
3 Park Avenue, 16th Floor
New York, New York 10016 – USA
Tel. (212) 561-3608
Fax (212) 779-9928
E-mail: rhouck@evw.com

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I have not yet figured out how to blog, but my friends, contacts and clients know that I am not shy about sharing my views and experiences - on US-European affairs, travel in Germany, Austria and Switzerland - US politics (now more interesting and potentially destructive than even under George W. Bush - who turned out to be the smarter of the two brothers).  

AICGS November 2016 Conference

M E M O R A N D U M

November 2016

The American Council for Contemporary German Studies held a half day conference last week at the offices of Deutsche Bank.[1] Here are the main points.

TRADE:

For President Trump, renegotiating NAFTA is a high priority. But if the US wants to withdraw from NAFTA, it is a long process, starting with 6 months’ notice. It will take years to undo.

TPP and TTIP have no chance in their current forms. The US may engage in some small, bi-lateral trade negotiations, such as with the UK, Japan or Viet Nam. Any treaty with the UK must await its having left the EU. There will be no big deals. Anything “big” and international is bad. Germans say the pivot to Asia was a bad idea. But we see what China is already doing to fill the vacuum Trump will leave in the Pacific.

China’s trade with its regional partners is declining. The Chinese want a deal with Trump; they think they are smarter than he is.

Jeff Sessions (Senator from Alabama, nominated to be Attorney General) is critical of China’s currency policies and Trump is likely to declare China to be a currency manipulator under WTO rules. Americans have gotten used to inexpensive, good quality Chinese products.

US ECONOMY:

Trump might be able to pay for his infrastructure stimulus by using lower taxes to entice US companies to repatriate profits held abroad. But note that infrastructure programs do not necessarily stimulate growth long term. The money has to be spent across all congressional districts, so it is not so productive. [I have also heard it may be spent in the form of tax credits, thereby privatizing these projects. Americans will end up “renting” the improvements and paying for them with fees.]

Tax reform is high priority generally. Republicans need only 50 votes [51?] if the tax program is limited to 10 years. This is how the Bush tax cut went through. Chuck Schumer (Democrat Senator from New York) is also interested in tax reform.

Short term, the dollar will strengthen against the Euro, possibly to 1-1. This will help German exports.

INTERNATIONAL MEETINGS:

At the G-7 economic summit in Sicily March, 2017, Trump will claim that he has done his share for the world economy by getting his stimulus program through. The rest is up to other countries. Europe needs to clean up its banks’ balance sheets. Trump can’t do anything about that. The G-20 will meet in Hamburg July 7-8.

The G-20 growth initiative begun in 2009 has “drifted into irrelevancy.” Recent financial efforts are regional. Brexit is a significant even in the world economy.

In international affairs as in economic, Trump needs to show his constituency that he is carrying out his promises. Any initiative must be framed in a way so that he can tell them he is fighting for them and winning.

US POLITICS GENERALLY:

Trump ended two ruling dynasties, one in each party: first the Bush family and then Bill and Hillary Clinton. This leaves a very new situation in which all issues can be re-examined. Both parties have to examine their makeup. Trump essentially organized a hostile takeover of the Republican Party (with years of help from the Tea Party, which the Republicans welcomed.)

Washington, DC has panicked. No one expected a Trump victory. Indeed, many thought the Democrats would be the majority in the Senate and win more seats in the House than they did. The Republicans will have internal troubles because Trump is not consistently small-government or debt-focused. He intends big defense and infrastructure spending, with little attention to how to pay for the expenditures. Congress will have to raise the debt limit about July, 2017. Republicans will have to negotiate among themselves. Some Republicans are pro-trade.

Many Republicans are happy the Democrats can block legislation, so the Republicans can blame them.

IMMIGRATION:

Faced with resistance from Congress, Obama ruled largely by executive order. Trump can reverse them without Congress. The ones on immigration and climate change will be the first to go.

The US has not taken many asylum seekers, but the US does provide 40% of the UN’s immigration budget. How much will a Trump administration pay? Senator Sessions spoke to a delegation of the Atlantik Bruecke earlier this year, mainly about immigration. He’s against it.

OBAMA:

Germans loved Obama and had great hopes for him. They were disappointed. They don’t like Trump, but could be positively surprised. [Not my prediction.]

There was an initiative to change the voting formula for the IMF. Obama did not get this done and now Trump will not consider it. The other IMF members are upset that Obama did not accomplish this.

Helmut Schmidt did not like Jimmy Carter. When Ronald Reagan was elected, Schmidt arranged a final meeting with Carter, so he could go to Washington then meet with President elect Reagan. Merkel lost this opportunity when Obama visited her last week in Berlin.

INTERNATIONAL AFFAIRS GENERALLY:

Trump has said he likes the UN, but his UN Ambassador will not be cabinet level as Obama’s was. John Bolton has been mentioned.

Renegotiating the Iran deal will not be easy. Now Iran has the money. The leverage is gone. The other countries that imposed sanctions will not re-impose them.

Trump will have an effect on 2017 elections in the Netherlands, France and Germany. They all have populist movements. If Trump is reasonable, they will say “See, it is not so bad.” If it is bad, then the US will be alienated from the EU. Russia and China will like that.

In negotiating with Putin, Trump needs to be sure other countries do not think he is “negotiating over their heads.” Do sanctions really have effects or just make the West feel good? Russians are very resilient, defiant in the face of sanctions.

As to Syria, the US should have been more involved. Putin would not take Holland and Merkel seriously. He wanted to deal with Obama.

THE US and GERMANY:

The US and Germany need to develop a new narrative of their relationship. The old ones based on the liberation, the Marshall Plan, the Berlin airlift, support for reunification – these are all old and not persuasive.

Trump’s support for torture goes against German [and my own] need for values, the need to believe Germans are good. [John McCain argues that torture does not work. This detracts from the moral argument.]

Only recently has Ms. Merkel said anything about Germany’s defense budget. For most of her 11 years, it has not been an issue. [I just happened to read that prior to the fall of the wall it was 25% of the West German budget. The number of Germans in the military has dropped from 500,000 to 170,000.] Trump has made German and Japanese “freeloading” on US security a major issue.

Rudolph (Rob) Houck

rhouck@rhoucklaw.com

  1. Although there was no announcement that the meeting was “off the record,” I will not attribute the comments to any of the panel members. It should be enough to know that they were all experienced observers of Washington or the trans-Atlantic scene.

ABA INTERNATIONAL LAW MEETING – NYC, April 18-20, 2012

SUMMARY

COMMON THEMES –

Crises always arise Friday afternoon and have to be solved by Monday morning. The logistics of the solution are significant – locating, gathering and motivating the right players, determining the precise nature of the problem, taking concrete action.

Good faith, its role in the legal system and its consequences vary from system to system.

The interpretation of contracts also varies from system to system, with the US focusing on the language of the contract and European countries looking more to the likely intent of businessmen. Americans fear this will substitute the judgment of the judges for the judgment of the parties.

US litigation, discovery and legal fees strike fear in foreigners and discourage dispute resolution here.

However, US (NY) courts are very sophisticated and reliable. NY judges are familiar with sophisticated contracts and financial products.

Arbitration can be expensive (having to pay for the panel). The location of the arbitration may determine the procedure and the role of the courts.

For all its disadvantages, New York law is quite sophisticated, permits the parties great flexibility in determining their contractual relationship and has a great number of precedents which permit the parties to predict the outcome of any commercial dispute. The parties are permitted to limit the reach of NY law, such as by waiving jury trials or limiting discovery. New York judges will not substitute their judgment for the judgment of the parties. Asked what the outcome would be under the laws of various European countries, the answer was often less certain. The judges in those jurisdictions had not been faced with the issue.

SPECIFIC TOPICS

  1. NEW YORK REAL ESTATE MARKET – The New York City real estate market attracts more foreign capital than any other city in the world. New York City’s economy is comparable in size to that of Spain, Australia, Russia or Canada. Its police force is the size of the Belgian army. The dynamics of the NYC market (along with a few other cities, “gateway cities”) different from the market of all but a few US cities, including very large ones. This is not merely a matter of size but the relative strength of landlords and tenants.Rents in non-gateway cities have remained flat for decades. This sort of real estate is a commodity. Not so the rents in gateway cities, which has gone up. The only comparable US real estate investment is “fortress real estate” – mega malls with multiple national anchor tenants. Fortress real estate is controlled by REIT’s. The barriers to entry into gateway cities and fortress real estate are very high.

    A significant trend in US real estate is creating mixed use commercial-residential developments away from city centers but with an urban feel. Residents can walk to clusters of shops, cafes and restaurants.
    (I have seen such a development in the middle of no-where, north of Dallas. It is actually very attractive.)

  2. SELLING PRODUCTS INTO THE US – This story is mainly one involving China, but also India and Viet Nam. It became big when children’s toys from China were found to have lead paint. Exporters now must have their products intended for children tested by 3rd parties, significantly increasing costs. The problem is two-fold: determining whether the non-conforming product can be made to comply legally and handling the matter logistically – such as dealing with subsequent shipments already in transit, storing the product, meeting market deadlines.
  3. HIGH NET WORTH INDIVIDUALS – More and more wealthy families live in multiple countries and may not even consider themselves to be subject to US law. The clearest case is the child of a foreign family born in the US but who never lived here since childhood. US law may require the disclosure of assets which the person may not even consider to be an asset. Citizens of Latin American countries may want to use US and Swiss banks because bank officers in their home country may sell financial information to kidnappers.
  4. BANKRUPTCY and IP – If an IP licensor goes bankrupt, even a fully paid IP license may be terminated by the trustee, leaving the licensee without any rights. The issue is whether the contract is “executory.”Beyond the initial grant of rights to the licensee, IP licenses often have on-going obligations such as quality control and rights to developments (either by licensor and licensee).

    Mechanisms providing some protection against this risk include: a) placing the licensor’s IP in a “bankruptcy remote” entity – one with no significant financial obligations; b) putting the source code in an escrow account, accessible to the licensee if the licensor goes bankrupt; and c) taking a license only from a strong licensor. Kodak is an example of a once strong licensor now bankrupt.

    The US has much more experience with bankruptcy than other countries – its statutes, judges, lawyers and other advisors. The US has enacted Chapter 15 of the bankruptcy code to deal with cross-border bankruptcies. Normally US courts will honor the rulings of foreign bankruptcy courts if the center of the bankruptcy is there. Questions do arise as to whether the other country really is the center of the bankruptcy and whether its rulings are generally consistent with basic US concepts of fairness.

  5. ACQUISITIONS – The US does not follow the European example of relying on the seller’s due diligence report. US law firms do not permit 3rd parties to rely on their due diligence, in part because US law firms cannot limit their liability. Motivating key target employees after the acquisition is not simple, assuming they received a significant part of the sales price. Sharing equity going forward is one method. Non-competition agreements are another. The buyer should try to judge the motivation of the employees pre-closing and get as much essential information from them as possible. What is Plan B if the employees do not show up after the closing. Different countries provide very different remedies if the employees breach their agreements.The use of insurance to cover certain acquisition risks is very limited.

    Sandbagging (closing knowing that the seller has made misstatements) is treated differently in different jurisdictions. Some jurisdictions view it as a matter of good faith.

  6. CULTURAL PROPERTY – The international convention on the treatment of cultural property covers both ancient and modern objects, paintings, sculpture, household objects and fossils. It depends on the ownership laws of the foreign country and their domestic enforcement at the time of export. The authenticity and initial source of the object are not always easy to determine. Sometimes the importer tries to make the object look like a worthless tourist souvenir. The US will take ownership of illegally imported objects. What to do with them after confiscation is a separate issue. The FBI has a special art fraud unit, but normal customs agents are trained to detect objects which may not comply with US law.
  7. WASTE TO ENERGY – The economic practicality of burning municipal waste for electricity depends on many factors, mainly policy ones. The actual electricity produced is minor. The biggest economic factor is the “tipping fee” paid to the facility for disposing of the waste. The efficiency of the operation depends on the waste collection system, the separation of the waste streams, and the distance from the waste source to the facility. If landfills are cheap, little waste is burned. If they are expensive, illegal dumping increases. In eastern European countries, “freedom” also meant the freedom to pollute.
  8. RESTRICTIVE COVENANTS – Different jurisdictions treat personal information on an employee’s computer very differently. Whether the employee owns the computer makes a difference in some jurisdictions and not in others. Similarly the enforceability of restrictions on an ex-employee’s right to compete with his or her old employer varies dramatically.
  9. NUERNBERG TRIALS – The US had not provided funds for a 2 nd set of war crimes trials and prosecution depended on the willingness of US military attorneys to take on the job voluntarily. German thorough documentation made proof of the crimes relatively easy. The lead officers justified preemptive war and mass executions as self-defense.The US will always find reasons not to subject itself to control by other countries. Tony Blair’s requirement of a written legal opinion justifying Britain’s involvement in the 2nd Iraq War produced a poor opinion, one which will be harder to give to justify future wars.
  10. ANTITRUST and the FINANCIAL BAIL OUT – US law does not regulate the intersection of antitrust and securities regulation. These two areas came together during the financial crisis. How does the market function when the government is preventing it from eliminating a participant?The EU and Canada faced similar problems.

    Arguably the Lehman decision set the stage for further decisions and they both made dealing with the MF Global crisis easier.

  11. – APPLICATION OF NEW YORK LAW – A large panel of New York experts determined that selecting New York law and New York courts is the best choice, at least for sophisticated, large dollar transactions.NY law permits the parties greater flexibility and certainty in setting the terms of their relationship. Yes, the costs can be high, but not when compared with London. NY lawyers, experts and judges are more experienced than other jurisdictions and have a greater body of relevant law, which provides greater certainty.
  12. – JOINT VENTURES – In entering a joint venture, the parties should also consider the procedures for breaking up and the consequences for each party of breaking up. If one party buys the other party’s interest, will the buyer be able to operate? What will be the rights of the non-buying party? Will it simply compete with its old partner?The joint venture has three sets of relationships which can be controlled by different legal regimes: a) the contractual ones between the parties, b) the one under which any JV entity is formed and c) the one with 3rd parties. The players in different joint venture structures have different duties under legal systems. For example, the management of an Italian entity has duties to its creditors. A US director may have duties to all the shareholders, not just the one who elected him or her. A shareholder may have rights it may enforce in litigation beyond the ones in the JV contract.

    Discussing all the potential conflicts which may arise in a joint venture does not necessarily result in solutions but at least gets the parties to focus on them. A party may be given veto rights to deal with these problems, but that party may use the veto for purposes of general leverage or to force a buyout.

    Different legal systems can create deadlock situations other than simply 50-50. In Germany, the deadlock may be 75-25.

    Elaborate dispute resolution systems are not favored by most of the speakers. Adding a director to break deadlocks may not be possible in some jurisdictions. Does the dispute resolution system favor one partner over the other (such as favorable location), presenting that partner with leverage in dispute settlements?

    If arbitration is the dispute resolution mechanism, remember that the place of the arbitration gives the legal system and courts of that state or country some degree (more or less) of influence. UK courts used to readily intervene in arbitrations held in London.

    There are several standard mechanisms (mainly variations on the auction process) for setting the price and buyer in a forced buy out.

  13. – INTERNATIONAL SALE OF GOODS – Most Americans, including judges, do not know that this convention is US law and may apply to international contracts even when the law of a US state applies to the contract. This fact may give either party (domestic or foreign) advantages or disadvantages. Most Americans do not like the convention because it permits greater inquiry into the intention of the parties. Also, they are familiar with the UCC but not the CISG.

MISC – One case mentioned involved a contract and amendments between a US and a German company. The contract was under New York law. But the amendments (made by the businessmen without lawyers by cutting and pasting) applied German law, then NY law, then German law, making it impossible to tell what law applied.

DETAILED NOTES

  1. -NEW YORK AS REAL ESTATE MARKETNew York’s GDP is equivalent to that of each of Spain, Australia, Russia and Canada. It has a police force of 40,000 people, equal to the size of the Belgian military. It is in a group including Boston, DC and LA referred to as “gateway” cities. Non-gateway cities include, for example, Atlanta, Denver, Philadelphia and Kansas City. The market dynamics in the two types of cities are quite different. Rents in non-gateway cities have been flat for many years. In gateway cities they have increased substantially. In non-gateway cities, there are no barriers to entry; real estate is a commodity there. The top cities worldwide for investment are New York and several Chinese and Australian cities.

    The other main type of investment for foreign capital is “fortress retail” – shopping centers with 4-5 major anchors. They create the same barriers to entry as do gateway cities. Of the top hundred or so fortress shopping centers, the great majority are owned by a few REITS. Only 13 are privately owned. So the US retail real estate market is very different from the European, where many large buildings are owned by individuals or families.

    A new trend is trying to create a semi-urban experience outside a traditional downtown area. The commercial areas of these developments are accessible from residential by foot or bike.

    Regarding the Frank Gehry designed building on the West Side, the glass in the building is designed by computer, and each piece is curved and uniquely shaped. The glass was made in France, processed in Italy, shipped to Connecticut and then installed in NYC.

  2. – SELLING PRODUCTS INTO THE USThis presentation focused mainly on the US Consumer Product Safety Act, adopted in 1972. It got a lot of attention in 2007 because of multiple recalls, many involving Chinese products.

    The Consumer Product Safety Commission is a 5 member board, dominated by politics – Republican and Democratic. The act deals with unreasonable risks, not warranty claims. Certain types of products are regulated specially by other acts – automobiles, tobacco, drugs, food and cosmetics, for instance.

    Every company in the chain of distribution is involved. There are three main aspects to the act – compliance, test and certification and reporting.

    An important development is that products intended for children must now be tested by 3rd parties, not self tested. This adds substantial cost. The chief place of enforcement now is at the border, to catch the products before they are further distributed in the US.

    US enforcement is by customs, applying customs and CPSC laws. If goods are impounded at the border, they have to be stored. A common remedy to deal with the shortage of space is releasing the goods to the importer subject to a bond. Possibly the goods only have to be relabeled or otherwise modified.

    Possibly they have to be returned to the manufacturer or destroyed. They can also be sent on to a 3rd country.

    Canadian law is similar. One difference is that Canadian law also covers advertisements.

    When dealing with an incident at the border, the first step is to get copies of any paperwork – the government must specify why the goods are not permitted entry – and to figure out precisely where they are being held, not just “at JFK.” Figure out if there are other shipments on their way and where they are. Build up a list of names of people who play a role on the client and importer side. Has any testing been done? Follow the legal and practical sides simultaneously.

    99% of the cases involve China, India and Viet Nam. Often the foreign manufacturer does not know that the goods do not comply. A supplier to the manufacturer may be the problem. Possibly part of the product has been tested, but not the rest.

  3. – DEALING WITH HIGH NET WORTH INDIVIDUALSForeign banks are resigning accounts rather than deal with the very lengthy certifications required by US law. But it is hard not to have US contact. With some persons, it is hard to determine whether they are “Americans” under US law. They may not think of themselves as Americans. A recent article in The Economist focused on multi-jurisdictional families. Many people have two passports. The US State Department requires applicants for passport renewals to certify that they have filed US tax returns. This can be the applicant’s first notice of this requirement.

    A positive side of multiple jurisdictions is that someone not yet subject to US law may plan his or her finances (such as making gifts) before becoming a US resident.

    Small and medium sized financial institutions have the worst of the US Patriot Act requirements because they may be regulated as heavily as much bigger banks.

    Delaware developed certain legal mechanisms to attract high net worth individuals. Now some other states may offer the same planning mechanisms.

    Compliance may require the Bank to make exhaustive inquiries of the client and familiarity with foreign countries and practices. For example, the UK has a sort of government-issued lottery ticket which pays off irregularly. It may be considered a UK asset for US disclosure purposes.

    Many individuals do not understand that residency is different from domicile.

    In some countries (for example South America), having off shore bank accounts may be a matter of security. South American bankers may sell financial information to potential kidnappers.

    US bankers undergo annual training on money laundering. They are taught to watch for client signs such as a) fees are irrelevant, b) information given is vague or changes, c) the person drops names, d) the person does not want to meet in person, d) the physical address given does not check out.

  4. – BANKRUPTCY and IPUS bankruptcy is a matter of federal and state law. Cross-border bankruptcies are now (since 2005) covered by Chapter 15. It divides the process into main proceedings and non-main proceedings. There can be only one main proceeding. It is where the bankrupt company has its center of interest. The US applies a standard of “manifestly contrary to public policy” in rejecting foreign decisions.

    The US has decades more experience in reorganizations and a related infrastructure of advisors, lawyers, judges, etc. It goes back to 1938. The EU has 46 different bankruptcy regimes.

    IP issues in the US develop out of contract administration. However, there is not much US case law on what constitutes an “executory contract.” The standard definition is by Vern Countryman and considers whether the two sides still have obligations to be fulfilled. An alternative approach is the “functional” approach – look at the result of permitting or not permitting rejection. What is the result of non-performance? The goal is to permit the bankrupt to reject a burdensome contract. [See Exide Tech case.] With trademarks, the rights may be paid up, but the licensor [here the bankrupt] may still have to police quality, so is it an on-going obligation.

    Another important case is Majestic Capital Ltd., dealing with CEO employment. He was officer of a bankrupt subsidiary. The parent noted the subsidiary employer was gone and so the employee was not needed.

    Leading European jurisdictions have different laws regarding executory contracts and different standards as to whether the bankrupt can terminate them.

    Another leading US case is Lubrizol (1985). It was a license to a 3rd party. Rejection put the licensee out of business. Many on the panel consider the case to have been wrongly decided. Does a breach necessarily result in termination of the license? Under what circumstances can a paid up license be terminated by a bankrupt licensor? Is there a distinction between rejection by the bankrupt and loss of the licensee’s rights?

    The US Congress enacted Section 365(n) to deal with executory contracts. Licensees can keep IP despite rejection by the bankrupt so long as the licensee pays royalties. This does not apply to trademarks (because of the duty to police quality). Some rights may be lost. This legislation was in response to the Lubrizol decision. For example, improvements do not go to the licensee. Non-disclosure agreements ARE enforceable. Improvement rights are an issue under IP licenses. One solution is to put the IP in a “bankruptcy remote” entity – one with no liabilities that could bring about its bankruptcy. However the judge in bankruptcy may still sweep that entity into the bankruptcy.

    In the Nortel case, many big companies licensed very important technology from a small, weak company, which went into bankruptcy. It is then important to put the source code in escrow. The escrow solution seems to work. In the Norton case, the licensee told the judge that if it did not get the code, it (the licensee) would have the biggest claim in bankruptcy, so the practical solution would be to permit the licensee to get the code.

    The Kodak bankruptcy is a current, big dollar IP bankruptcy.

    Qimonda is a big foreign bankruptcy which applied foreign law to US patent rights. It applied Chapter 15.

    The German licensor decided to reject the license under German law. There were important licenses.

    German law applied Section 103 and permitted termination of all the licenses. The trustee in bankruptcy tried to raise funds for Qimonda by relicensing the technology, even though the rights were already 100% paid for. A Delaware proceeding was the non-main proceeding and Section 365n applied. So the US licensee said it got to keep the license. But the Delaware court agreed that German law applies. On appeal, the case was sent back to the lower court which then applied a balancing test and determined that Section 103 of the German law was “manifestly contrary to US policy” so the licensee could keep its licensed rights.

    Just what policies are manifestly contrary? Not having a jury trial was not manifestly contrary. Golden Honey is a case involving Israeli action. Another case involved Juergen Top, “plastic surgeon to the stars.” The issue was the ability to intercept e-mails to help creditors collect assets. The court decided that it would be improper to do so.

    Think 3 is another important case. The company had a branch in Italy and could not get rid of its employees due to Italian employment laws. Italy asked to be the main case. Italian law would permit rejection of the license while US law would not. The case has not yet been decided.

    In an Ernst & Young case, application of US law would allocate more debtor assets to [certain?] creditors than Canadian. This was certainly no basis for rejecting application of Canadian law.

    The Vitro case involved a big Mexican glass manufacturer. Application of US or Mexican law would result in substantially different results because Mexican proceedings permit voting by insiders. This case has not been decided.

  5. – ACQUISITIONSDue Diligence – In Europe sellers sometimes create and distribute due diligence reports to potential buyers. This is not customary in the US. Lawyers’ liability is different – foreign law firms can limit their liability. In the US, the review of reports is usually permitted only after receipt of a non-reliance letter.

    Since European banks assume they can rely on due diligence reports, this issue must be dealt with early.

    Key Employees – How does the buyer keep these people motivated? Certainly the buyer needs a Plan B.

    Often the employee can be incentivized by equity participation. Earn outs are also a possibility, but these are very problematic. They should be kept simple. Otherwise the parties can argue and litigate for years. Even pages of regulations and examples do not solve the problem. In India, earn outs can be more complex due to exchange controls. Also, there are minimum purchase price regulations. Failure to meet employment obligations has different results in different countries. In the US a court is unlikely to grant damages for failure of an employee to work. One solution could be to make all or part of the transition prior to the closing. The buyer should do due diligence about the reliability and motivation of the employees.

    Non-Compete – Non-compete provisions are often not enforced, depending on the jurisdiction.

    Enforcement in connection with the sale of a business with its good will is more likely. The UK uses the “blue pencil” test, so the buyer asks for the maximum possible restrictions and then lives with what the court will permit. It appears that the terms are literally struck out, so that it is important to draft the restrictions so that the judge can sort of check the box. If the language of the restriction is too short, the judge may simply edit the provision down to nothing. China permits restrictions but limits them to 2 years and requires monthly payments. Belgium will permit a limit of 2-3 years but will not apply the blue pencil. The restrictions are often put in both the purchase agreement and the employment agreement.

    One question is whether the scope of the restriction can change to expand to the scope as it exists at the end of the employment term.

    Belgium uses management agreements for ex-management because employment agreements are taxed more highly.

    Freedom to Contract – India will not enforce US judgments due to public policy issues.

    Insurance – This technique (buying insurance against certain M+A risks) is seldom used in Belgium. It used to be that sellers could set the terms and if they were financial sellers the buyer was forced to take the risk or buy insurance. Now it is a buyer’s market. Possibly insurance works with very narrow issues and sometimes with environmental clean ups. Insurance is also not used much in the US. It is hard to see how a 3rd party can better assess and take the risk than the two parties most closely familiar with it. The most common indemnity remedy is through use of an escrow of part of the purchase price.

    Regulatory Concerns – China also (as India) has exchange controls. India is sensitive to gambling and capitalization. The US has SIPIUS.

    Sandbagging – Belgium probably permit this, although there are no cases. Most US contracts are silent on the subject. The outcome is uncertain in the UK. Not disclosing the buyer’s knowledge of the seller’s misrepresentation might be viewed as fraudulent. India would follow the UK. The issue is viewed through the lenses of good faith.

  6. – CULTURAL PROPERTYThe applicable law is the Convention on Cultural Property – Section 308, 19 USC 2607, and the 1970 UNESCO Convention. Section 9 is more controversial. The information is available at the State Department web site.

    The US recognizes foreign laws regarding ownership. Some countries say that they own what is in the ground. Sometimes smugglers disguise valuable objects as tourist trinkets, such as by painting them and putting them together with worthless objects. They may also falsely report the country of origin. This may be a bit complex since borders have changed. Also the object may have been imported many centuries ago to the country where found.

    Also relevant is the National Stolen Property Act, 2314-15. Relevant aspects of the law are how to determine ownership and when the law went into effect. Also, was the law generally enforced then?

    19 USC 1595(a)(C) relates to forfeiture. 18 USC 542 and 2314 are also relevant.

    Argentina regulates ownership of fossils. They may be owned privately but have to be registered.

    The US does not honor the innocent buyer defense. In these proceedings the government may rely on hearsay.

    Other relevant statues include 18USC545, 98.

    1983 is an important year for the US in determining rights.

    There is an FBI art fraud unit. Agents (including customs agents) do get training. The laws apply to modern art as well as antiquities. Insurance is available for title to art but not to import violations.

    Peru vs. Johnson is a decision involving foreign ownership laws and their enforcement. Applying US law to these issues is very difficult if the object in question is not present in the US. The fact that the owner is in the US is not enough. The US has asked Switzerland to enforce US decisions regarding art ownership.

    One problem in dealing with manuscripts is that they often contain multiple languages, one written over another, each indicating a different country with conflicting ownership claims.

    These laws do not apply to digital art.

    If the object is forfeited, the US takes title and then decides what to do with the forfeited piece.

    Regarding the Elgin marbles from the Parthenon, the Ottoman government gave Lord Elgin permission to take them. The explosion which badly damaged the Parthenon had already occurred.

    European countries treat each other differently from the way they treat other counties in these matters.

    Napoleon and Nazi Germany are cited as examples, with France keeping items taken from Egypt but not from European countries.

  7. – WASTE to ENERGYThis was not so much a legal discussion as a practical one regarding government policy and the economics of waste disposal. Electrical generation is a small part of the economic formula. The subject is municipal solid waste or “MSW”. A key factor is the “tipping fee” – the amount paid for accepting the waste. The garbage is burned; metal recycled and the ash used for cement. Carbon credits – if ever adopted – could play a role.

    In the US only 87 such plants have been built and the last one over 15 years ago. In contrast Denmark has 29 with 10 more coming. China has 90 with 140 more coming.

    Denmark, Sweden, Switzerland and Germany are leaders in this area. Germany does not send any municipal waste to landfills. Two EU directives encourage waste to energy – the landfill directive and the renewable energy directive.

    FERC controls feeding energy into the grid. Generators pay for the initial connection into the transmission lines. In the EU, the focus is on disposing of waste, not so much producing electivity.

    Bank financing is a key element. Banks want a long term, secure source of funds to pay the debt. It is difficult to find electrical users who are willing to commit long term. Also, the waste disposal entity may have difficulty assuring energy production. One strategy is to look for public-private partnerships.

    In Europe, lesser developed countries (Romania and Bulgaria) depend on land fill for waste disposal.

    Possibly some countries will jump the middle step and move directly to more sophisticated methods. In the old Soviet countries, their new freedom has encouraged pollution. They feel free to pollute. The speaker saw a police car dump waste out the window. The amount of electricity generated per ton of waste is not a main incentive.

    Turning to Mexico and Latin America, the system needs a developed collection system, skilled staff, landfills, reliability, etc. These are missing. Furthermore, if waste is burned at too low temperature, it creates carcinogens.

    India does not require the segregation of waste. There is a lot of NIMBY litigation. Coal produces cheap electricity, in part due to old, fully depreciated plants. The cost of collecting waste is high. Rather than feeding all the electricity into the grid, some of the electricity can be used on site.

    How can the producer be sure that the electricity it produces gets used? Municipalities do not have the power to require this. EU directives focus on biodegradability to be eligible for a preference.

    Determining this component is difficult. If it is not segregated, it has to be burned at a high cost. Still, waste can help even out the peaks and valleys characteristic of solar and wind power. But efficiency of a plant is based on 100% use. So to cut back due to solar or wind power raises the cost of MSW electricity.

    The farther the waste has to be trucked to be burned, the lower the efficiency of the process. If land fill is cheap, it makes waste burning uninteresting. If it is expensive, dumping flourishes.

  8. – RESTRICTIVE COVENANTSDifferent jurisdictions treat the issue of examining an ex-employee’s computer differently. Certainly if the examiners see an e-mail is personal, they cannot read further. It is best practice to ban private emails on company computers. In some countries you cannot abrogate the expectation of privacy. It is a public policy based right.

    Mexico has strict requirements as to how an employee is to be terminated.

    In Austria, there is no common law regarding privacy. One has to look at the statute. Looking at the computer is permitted. If computer information is improperly found, it cannot be used in court.

    In the US, the law is state specific. There is no federal law on privacy. California has a right of privacy in the state constitution. But with notice, an employer may inspect the contents of its computers. The question becomes more difficult if the information is on a thumb drive or information has been copied or emailed, deleted or destroyed. In Austria you CAN get a court order to permit a search.

    In Mexico, abuse of trade secrets CAN be criminal. Mexico changed its IP laws as part of joining NAFTA.

    Jail terms of 2-6 years are provided.

    Regarding “cloud” computing and information not on the employer’s server, see the Pure Power Boot Camp case. One step to take in countries which restrict inspection is to ASK the employee what he/she has done with the trade secrets, making a record of the request. The inquiry could also give the ex-employee an opportunity to go through his old email and separate out personal from company email.

    See the Sanguard case regarding privilege.

    Ownership of the computer equipment and its location complicate matters. Is the laptop company property? Where is it? The US has a statute on computer fraud and abuse. US vs. Dessaul (sp?) and US v. Althoff are leading cases.

    Some contracts include notice provisions running several months. Australia will not enforce a notice provision. In Germany, the notice provision can be enforced. Statutory notice can be 6 months or more.

    This is often in lieu of a non-compete. There can be a 1 year notice and a 2 year non-compete. One complicated situation – a German company seconds an employee to a foreign affiliate. Then that contract is terminated. What does that do to the underlying German contract? The interrelationship between the two contracts should be carefully drafted. Does the termination of the seconding agreement also end the non-compete obligation under the main agreement?

    California is very hostile to non-competes. Also garden leave will not be enforced. One would do better with a “transition period” in arguing that the contract is not a restraint of trade. NY does enforce garden leave.

    German non-competes require some portion of the employee’s salary to be enforceable. The percentage is not fixed by law but is usually 60-70%.

    Many countries have no TRO’s (temporary restraining orders). There is none in Mexico. The question becomes where is the employee’s domicile, where does he/she receive payment, where does he/she perform work? The labor law in Mexico was passed in 1970, so it is quite old. A leading case in the UK is Samengo-Turner, involving Black & Decker.

    Another important case is the Thomas WP – BNP Paribas case from 2008. Here, one company planned on stealing a whole group from another. India has no non-compete laws. But California took jurisdiction because it found the case would languish in India for 10-15 years.

    Mexico does protect trade secrets, but there can be a question of what constitutes a trade secret. Not all information is protected. Certainly the owner has to treat the information as valuable and secret.

    Employees must be warned. The information has to create a competitive advantage. Again, Mexico considers abuse to be a criminal matter.

    Germany protects trade secrets, but what IS a trade secret? The restrictions are generally broadly drafted and include contractual penalties for abuse, based on the employee’s monthly salary.

    Another case mentioned is Coface Collections vs. Newton. The employee began to post comments which would support his own competition against his current employer on Linked In. The employee also contacted senior employees at his employer in preparation for leaving. Amway Global is another important case.

    In Mattel vs. Bratz Dolls, Mattel tried to protect its employee’s ideas. This did not work out for Mattel.

    A possible reason for the rise of Silicon Valley IP and the decline of the Boston area is the freedom of movement California offered. Reference is made to the PhoneDog case.

    Mexico’s position in these areas influences all of Latin America. In Germany, a company must act within 14 days of having cause or that cause expires.

    The EU-US difference regarding privacy is that the US thinks of the ownership of the hardware but the EU thinks in terms of the employee’s idea. A company should consider getting special computer software to protect its intellectual property kept on computers. It makes it easier to control access and to see who has accessed what.

  9. – NUERNBERG TRIALSBenjamin Ferencz, the speaker, was the lead prosecutor of one of the subsequent war crimes cases at Nurnberg. Initially he handled “allied flier cases” – looking for ring leaders in the killings of downed pilots. They were beaten to death by mobs. He dug up their bodies with his hands because machines would have destroyed the bodies. At this point, he did not know about the concentration camps or even the phrase.

    Ferencz was then given the job of culling through the files in Berlin and looking for evidence to help with the initial Nurnberg trial. He stumbled across files from the eastern front and a report of 33,000 executed in one day. Thereupon he found an adding machine and began adding up the number of people documented as having been killed by the SS. He stopped when he reached 1 million and flew to Nurnberg with the files. But there were no funds to pay for prosecution of this next layer of perpetrators. His boss, Telford Taylor asked if Ferencz would take on the prosecution in addition to his other duties. Ferencz agreed.

    Ferencz’s prosecution lasted only two days and consisted solely of presentation of documents prepared by the SS at the time. Otto Ollendorf was the top commander of the group. He claimed justification by self defense. According to Ollendorf, everyone knew the Russians planned to attack Germany. The Jews were also known to favor the Bolsheviks. The children had to be killed too for long range security. No one trusted the Gypsies, so they also had to be eliminated.

    Justice Michael Musmano (of Pennsylvania) declared that a preemptive first strike is no defense. 13 were condemned and 4 executed. The rest were released after a few years, despite their long sentences.

    After the war and prosecutions, he and his boss Telford Taylor came back to New York and tried to restart their careers, but their skills were not marketable.

    Shifting to current law, the US has not subjected itself to the International Criminal Court. The US always has a reason, but those reasons will never be satisfied. There will always be another reason.

    Ferencz believes the crimes committed by the Germans could happen anywhere in the world.

    When the US pressured the UK to join in the war in Iraq, Tony Blair first got a legal opinion on the legitimacy of the war. The resulting Goldsmith opinion was not good legal analysis. It will be harder for future lawyers to give the same sort of opinion in the future.

    The positions Mr. Ferencz took about preemptive wars was particularly interesting in the context of Iraq and Iran. But he did not draw those conclusions himself. He received a standing ovation.

  10. – ANTITRUST and the FINANCIAL BAILOUTAntitrust is a subject I have not studied in any depth since law school, so my notes on this subject may be less reliable. However the basic issue of overriding the markets with government aid is interesting in itself as is the interplay of the Securities and Exchange Commission with the Justice Department Antitrust Division and the Federal Trade Commission.

    The US view is that any burden on market competition and financial institutions has to have a strong justification. The goal of US antitrust policy is legitimate price formation, permitting supply and demand to set the price.

    The EU imposed lots of conditionality on its support of financial institutions. Its goal was to make markets work better and foster competition. If an EU member state passes an anticompetitive law, the EU in Brussels can strike it down. The EU has committed 1.3 trillion in financial support – 30% of the EU GDP.

    These crises always happen Friday evening [a constant theme], when everyone has left and forming a team is a key requirement for dealing with the problem. Ireland wanted to guaranty ALL financial obligations, so this drained money from the UK. The problems were two-fold: short term liquidity and long term viability. The EU regulators had to look at the business model and figure out how to make the shareholders bear the risk. What was the resulting competition? What would be the effect on the market of a bank leaving the market? The EU teams doing this are pretty experienced. They do not write the banks’ plans but only review them.

    The US goal is to maximize the welfare of society. Lack of competition limits the public’s options. Fewer transactions result in higher prices. [?] When markets are illiquid, fewer customers and suppliers are satisfied.

    More than 1/3 of equities trades are off any exchange.

    Canada has special antitrust treatment for the financial sector – major banks, insurance companies, for instance. Section 94 is especially for this section. During the crisis, Canada did not make its standards more lax but it did speed up the process. Some actions were taken very quickly, but the decisions remained the same. The problem was that all banks came for help at the same time. Canada took a “first time = last time” policy [although is that believable?] Once a recapitalization has happened, it cannot be undone. Banks play a special role in societies.

    Ireland had few banks left at all. Now banks have to develop “living wills” – for their treatment in a crisis.

    The burden cannot be just on the state.

    One can argue whether Lehman should have been saved or not. It set the stage for other developments and changed the atmosphere. Bear Sterns was more immediate. This was a big shock for the EU – but that can have positive results. In the US, banks leave the market all the time. The EU is different.

    MF Global was handled with better coordination among agencies involved because of the Lehman-Bear Sterns.

    US law is silent on the intersection of securities and antitrust laws – which one trumps the other? A relevant case is Credit Suisse vs. Billing. “Laddering” has been challenged in the securities industry. The underwriters claimed securities laws permitted this practice. The decision provided a set of 4 criteria for determining which body of law should be applied.

  11. – APPLICATION OF NY LAWFactors different between jurisdictions include the obligation of good faith and its parameters (different from fiduciary duty), specific performance and third party beneficiaries. NY applies the four corners doctrine of contract interpretation and does not try to decide what reasonable businessmen really intended.

    The doctrine of good faith includes the idea that the obligation imposed by that duty cannot be contrary to a right given in the contract. If not contrary to this right, a party cannot interpret the contract so as to defeat the other party’s reasonable expectations.

    The Dalton case held that if you give unfettered discretion, it must be used for a purpose consistent with the contract.

    Fiduciary duty is a higher duty. Co-venturers are like partners. This obligation does not apply to normal contracting parties. The Uniform Commercial Code (“UCC”) implies a duty of good faith, but the general standard is the contract. A US court cannot impose additional terms.

    In one case, payments were determined by internet clicks. A party to a contact set up an automated system of clicking to run up its payments claims. This was never imagined. There was an implicit duty not to do it.

    Sophisticated parties can waive jury trials; they can waive e-discovery. If a contract says there is no duty of good faith, this too will probably be honored.

    Turning to the CISG UN Convention – this can be a part of contracts under NY law under the right circumstances. The CISG does not cover every aspect – local law fills the gaps. You are free to pick and chose parts of the CGIS you want to apply.

    NY law can be selected without any connection to NY if the amount involved is over $250,000 and the NY courts will hear the case if the amount is over $1 million. (There is no simple explanation for the difference in threshold.)

    The US Chamber of Commerce spends millions annually criticizing the US legal system. It undermines the credibility of our system. Getting visas discourages foreign businessmen from having suits heard here.

    In contrast, Ecuador does not have the concept of stare decises. NY offers more predictability.

    In arbitration, if the arbitrators are from civil law countries, they are likely to interpret NY law from a civil code point of view. The parties can agree to limit consequential damages, if that is a concern.

    Other advantages of NY law are that NY is a center of new products, so judges are more familiar with what is going on in the market place.

    [Suggestion that big contracts may be suitable for NY, but smaller ones for other jurisdictions.]

  12. – JOINT VENTURESSharing trade secrets in joint ventures is particularly sensitive. Once disclosed, the disclosure cannot be undone. In going into a JV, the parties should consider what legal regime will control the break up process and how particular rights and assets will be treated. This is seldom done. Different jurisdictions have different rules on the duties and liability of directors and disclosure of their identities.

    The JV entity has internal and external relationships which may be regulated by different legal systems.

    To whom are the director and officer responsible? In Italy, they are also responsible to the creditors of the JV.

    In Delaware the board has to make certain decisions, not the shareholders. Directors may have duties beyond duties to the shareholder who elected them. JV partners generally want to avoid litigation by shareholders AS shareholders. This could defeat the negotiated control structure.

    Although there may not be answers to certain decision making problems, going through the list of risks and problems will at least get the parties to think about them.

    Note that veto rights negotiated for one legitimate purpose can be used to gain leverage in another area. It is impractical to try to police the intent of the person exercising the veto right.

    In many jurisdictions a deadlock can be mainly in a 50-50 situation. In Germany it can be 75-25, because the 25% owner has certain veto rights.

    Some lawyers like a decision escalation procedure for solving problems, moving step by step up the decision ladder. Others think this process will happen if the parties want it and to require is a waste of time. Some countries permit as “casting vote” – not known generally in the US although giving a part the right to decide a question is possible. Some lawyer proposes bringing in a further director. Some jurisdictions do not permit this. Mediation and arbitration are always possible.

    Dispute resolution can be used as blackmail, especially if one of the partners has a procedural advantage, such as determination in a local tribunal. The criticism of the escalating dispute settlement procedure is that the procedure itself can turn into the subject of dispute. Was every step followed properly? Did the other party really show good faith? The formal system only provides more basis for still other disputes. If the parties want to settle their dispute, they can find a way.

    Only arbitration and litigation are by themselves binding.

    One advantage of arbitration is that it provides confidentiality. In the US, court documents are open unless specifically sealed by the court. In the UK, they are not. In Ireland, they must be public by a constitutional provision.

    The US is not party to an international agreement on judgment enforcement. The main foreign objections are US laws providing treble damages. The UK will not enforce awards for treble damages. So the US will not enforce UK decisions.

    On the other hand, the US is a party to the NY Arbitration Convention. The arbitration award then must be enforced by normal law in a state where the defendant can be found.

    Making complex arbitration provisions asks for trouble. The provision itself becomes the basis for dispute. What does one do with counterclaims, for example? One provision one might add is requiring at least one arbitration panel member to have experience in the specific dispute area.

    In arbitration, the costs of the judges is extra, so that adds to the price. The parties can control the procedure. They can eliminate substantive appeals.

    Foreigners fear discovery and US courts and juries. That’s why they will not litigate here.

    Where the arbitration is held can influence the way the arbitration is held. If held in Paris, then French arbitration law applies. This law sets the powers of the tribunal and the interim remedies. Prior to 1996 the UK courts were very ready to intercede in arbitrations held in London. Not so since then. In the US there is the Federal Arbitration Act but states also have arbitration laws.

    There are several ways to set a buyout price including:

    1. Russian roulette – with one side setting the price and the other deciding whether to buy or sell. This is highly unpredictable and works only if both sides are essentially equal.

    2. Shoot out – X offers to buy, if Y refuses to sell, Y has to buy at a higher price. This goes up and up until one buys. The economic strength of the two parties plays an important role here.

    3. Dutch auctions go from a high price down until one party agrees to buy.

    4. Not mentioned but a fair method is baseball arbitration, where the two parties each pick their price and then the arbitrator has to decide between the two, without compromise or change to the price.

    When considering the break up, each side needs to think of all aspects of the business which will be operating alone. Will it have all the physical and contractual rights it needs? Will it have access to customers and suppliers?

    Some JV’s have no dispute mechanism by choice. This makes break up less certain and more unlikely.

  13. – INTERNATIONAL SALE OF GOODSThe international sale of goods is based on a 1980 UN Convention. The US became a contracting state in 1988. Germany, Japan, Canada, Mexico and China are members. The UK is not. To apply, both parties must be from contracting states. The US member normally opts out in favor of the UCC. A survey was made of the Arkansas state bar and almost no one knew that the CISG was US law, including the judges.

    Reservation provisions are in sections 93-95 of the Convention.

    Courts have to apply the CISG if the convention is applicable, i.e. the parties are from two adopting countries and have not opted out.

    If a party has multiple places of business (in countries which have adopted the convention or not), then that party can spell out whether the law applies. Article 10 is the default rule. Many factors can be considered in determining whose law applies. Where were the contract documents produced? Which place has the closest contact? Where were the goods produced? Where was the contract signed?

    Issues that come up include labor strikes as force majeure. Is a fundamental breach the same as a material reach? Could the party have avoided the force majer? The party claiming the benefit of the force majeur cannot have played a role in creating it.

    UCC 2-313 covers post sale warranties. What about post sale modification of warranties? Is consideration needed? Not under the CISG. Under Article 8.1 the courts determine the intent of the parties. In the US, the rule is the objective manifestation of the parties’ intent. Many US parties do not like the attempt by 3rd parties to try to determine the intent of the parties. In France, the parties in commercial disputes never testify. In Italy, each side gets to tell its story. There is no parole evidence rule under the CISG.

    Australia and New Zealand are both covered by the Convention.

    Used goods are also covered. Section 38 of the CISG imposes a much tighter time frame.

Rudolph (Rob) Houck
rhouck@rhoucklaw.com
April 27, 2012

AMERIKANISCHE M&A PRAXIS WAS DEUTSCHE ANWAELTE IM HINTERKOPF BEHALTEN SOLLTEN

AMERIKANISCHE M&A PRAXIS

WAS DEUTSCHE ANWAELTE IM HINTERKOPF BEHALTEN SOLLTEN

EINLEITUNG

Nachdem die deutsche Wirtschaft mittlerweile wieder ein gesundes Wachstum generiert, während die USA insoweit noch immer hinterherhinken, wäre eigentlich ein deutlicher Anstieg deutscher Akquisitionen in den Vereinigten Staaten zu erwarten gewesen. Die Vorteile eines derartigen Markteintritts liegen, neben einer Steigerung der Glaubwürdigkeit, vor allem in der Nutzung kürzerer Lieferwege sowie der natürlichen Absicherung gegen Währungsschwankungen. Abgesehen von den 51 verschiedenen Jurisdiktionen, beherbergen die USA den – hinter der EU – weltweit zweitgrößten einheitlichen Markt; ein Markt, der deutschen Unternehmen generell wohlwollend gegenübersteht. So haben die führenden Köpfe in Politik und Wirtschaft seit jeher die gemeinsamen Werte beider Länder besonders betont und auf eine wirtschaftliche Zusammenarbeit hingewirkt. Dennoch unterscheidet sich die Akquisition eines Unternehmens in den USA erheblich von einem Unternehmenskauf in Deutschland. Dieser Beitrag soll dem Leser einen Überblick über die wichtigsten Unterschiede verschaffen, wobei ein besonderer Schwerpunkt auf den Unternehmenskaufvertrag an sich gelegt werden soll. Daneben sollen auch spezielle Aspekte von M&A-Transaktionen, sowie in Betracht kommende Rechtsmittel für den Fall, dass eine Transaktion hinter den Erwartungen zurückbleibt, näher beleuchtet werden.

DER VERTRAGSSCHLUSS – FRUEHSTADIUM

Guter Glaube – Aus amerikanischer Sicht können bis zum Zeitpunkt des Vertragsschlusses keinerlei schuldrechtliche Verpflichtungen zwischen den Parteien entstehen. Ist der Vertrag einmal geschlossen, beinhaltet er jedoch immer die stillschweigende und unbestimmte Verpflichtung zum „good faith and fair dealing“, wodurch die Parteien zur gegenseitigen Rücksichtnahme angehalten werden sollen. Allerdings vermag auch dieses Konstrukt den Käufer eines Unternehmens nicht davor zu bewahren, ein schlechtes Geschäft zu machen.[1] Nach deutschem Recht, können Schadensersatzansprüche zwischen den Parteien dagegen bereits mit der Aufnahme von Vertragsverhandlungen entstehen (c.i.c.).

LETTER OF INTENT – Den ersten vertraglichen Teil einer US-Transaktion stellt – wenn auch nicht notwendigerweise erforderlich – der Letter of Intend dar. Ein gut formulierter Letter of Intent besteht aus zwei Abschnitten: Einen vollstreckbaren Teil, der die Verschwiegenheitserklärungen und die Exklusivität der Verhandlungen statuiert, sowie einen nicht vollstreckbaren Teil, der den bisherigen Stand der Verhandlungen festhält. Aus Sicht amerikanischer Verhandlungspartner ist es selbstverständlich, an den nicht bindenden Klauseln eigenmächtig Änderungen vorzunehmen oder die Verhandlungen jederzeit abzubrechen, ohne rechtliche Konsequenzen befürchten zu müssen. Änderungen am materiellen Teil, des im Letter of Intent dargelegten Deals, reduzieren zwar die Glaubwürdigkeit der ändernden Partei, mehr folgt daraus jedoch nicht. Ist der Letter of Intent demgegenüber schlecht formuliert, enthält aber sämtliche essentiellen Punkte des geplanten Deals, so kann sich daraus später durchaus eine Bindungswirkung ergeben.

Due Diligence – Ein amerikanischer Kaufinteressent beginnt regelmäßig bereits im Frühstadium eines geplanten Deals mit der Due-Diligence-Pruefung. Ein gut organisierter Verkäufer wird zu diesem Zeitpunkt bereits 80-90 % der Dokumente, die ein gewissenhafter Käufer wird sehen wollen, zusammengetragen haben und sie diesem entweder physisch oder in einem digitalen Datenraum zur Verfügung stellen. Die daraus gewonnenen Informationen wird der Käufer dazu verwenden, diejenigen Gewährleistungen zu formulieren, die er vom Verkäufer im späteren Vertrag erwartet. Auch aus dem Umstand, dass dem Käufer im Rahmen der Due Diligence bestimmte Informationen zur Verfügung gestellt worden sind, lassen sich nicht notwendigerweise rechtliche Konsequenzen herleiten. Ist der Vertrag gut formuliert, sind Gewährleistungen des Verkäufers selbst dann durchsetzbar, wenn sie den im Rahmen der Due Diligence zur Verfügung gestellten Informationen widersprechen. (Mehr dazu unten)

Die europäische Praxis, die es Dritten wie zum Beispiel Banken und Drittinvestoren gestattet, sich auf den Due-Diligence-Report zu verlassen, ist in den USA unbekannt. Der Grund dafür liegt zu einem Teil in rechtsethischen Vorgaben, die es amerikanischen Anwälten verbieten, ihre Haftung für die Verletzung von Berufspflichten zu begrenzen. Wäre es Dritten gestattet, auf die Ergebnisse des Reports zu vertrauen, so hätte dies nicht nur Auswirkungen auf die Art der durchzuführenden Prüfung, sondern würde das Wesen des Reports an sich verändern – eine Wesensänderung, für die die meisten Mandanten nicht zahlen möchten. So ist sich zum Beispiel ein strategischer Investor der drohenden Risiken weitaus mehr bewusst, als dies bei einem Finanzinvestor oder einer Bank der Fall wäre. Dürfte sich dann aber auch ein Finanzinvestor auf die Angaben im Due Diligence Report verlassen, wären die Anwälte gezwungen dennoch sämtliche Risiken der Transaktion exakt herausarbeiten.

Auch der Ablauf einer Due Diligence nach amerikanischem Vorbild (nebst Konsequenzen) unterscheidet sich deutlich von der deutschen Vorgehensweise. Kein US-Anwalt erstellt detaillierte Listen der Ihm offengelegten Dokumente, es sei denn, um den Stand der bereits gesichteten Dokumente festhalten. Zwar soll keine wichtige Information übersehen werden, andererseits will man aber auch den Verkäufer nicht dadurch verärgern, wiederholt Einsicht in bestimmte Dokument zu erbitten. Aus Sicht des Käufers sind die im Rahmen der Due Diligence zur Verfügung gestellten Informationen, bis auf die Tatsache, dass sie die Grundlage der später im Vertrag enthaltenen umfassenden Gewährleistungen des Verkäufers bilden, sowieso weitestgehend irrelevant. Dementsprechend spielen Informationen, die nicht in die Gewährleistungen aufgenommen werden entweder keine oder nur eine geringe Rolle. Deutsche Anwälte hingegen erstellen umfangreiche und detaillierte Beschreibungen der dargelegten Informationen, da diese – unabhängig von der Sprache des Vertrages – zur Verteidigung gegen Klagen nach dem Closing genutzt werden könnten.

US-Verträge – In Bezug auf Unternehmenskaufverträge an sich, sind die Amerikaner bekannt dafür äusserst umfangreiche Vertragstexte zu erstellen. Die Gründe dafür sind zahlreich und es wurden bereits mehrfach Artikel zu diesem Thema veröffentlich. Die simpelste Erklärung ist eine Kombination aus Literalismus, dem Common Law sowie einer kostenintensiven Dispute Resolution. Die Amerikaner können sich nicht wirklich damit anfreunden darauf zu vertrauen, dass bestehende Vertragslücken durch das bestehende Gesetzesrecht geschlossen werden. Noch beschwerlicher wird dies durch den Umstand, dass soweit ein sprachlich einwandfreier Vertrag vorliegt, kein US-Richter den Versuch unternehmen wird, den wirklichen Willen der Parteien zu ermitteln. Er wird den Vertrag so durchsetzen, wie es der schriftlichen Vereinbarung entspricht. Daher erläutern amerikanische Anwälte die Vereinbarungen der Parteien in allen Einzelheiten, um möglichst sämtliche Eventualitäten abzudecken. Eine mögliche Ausnahme von dem generellen Misstrauen gegenüber dem geschriebenen Recht ist Rule 10b-5 des Securities Exchange Act von 1934. Diese findet im Fall eines Verkaufs von Aktien automatisch Anwendung und verbietet es einer Person:

to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.

Die Vorschrift wird allgemein als eine Art „catch all“- Gewährleistungen angesehen auf die sich ein enttäuschter Käufer in der Regel dann zu berufen versucht, wenn er seine Schadensersatzklage nicht auf andere Gewährleistungen des Verkäufers stützen kann. Da die Rule ihrem Wortlaut nach auf einen Share-Deal gerichtet ist, sollte sie bei einem Asset-Deal explizit mit in den Vertragstext aufgenommen werden. Unabhängig davon, ist die Rule auf Drängen des Käufers in der Regel auch beim Kauf von Aktien im Vertragstext enthalten.

RECHTSWAHL

Die meisten Transaktionen, bei denen sich die Aktien oder Vermögensgegenstände in den USA befinden, können nichts desto trotz dem deutschen Recht unterworfen werden. So kann sich zum Beispiel ein US-Aktionär verpflichten, seine Anteile an einem US-Unternehmen entsprechend den Vorgaben eines deutschen Vertragswerks zu übertragen. Die Übertragung von Anteilen an amerikanischen Unternehmen ist leicht möglich und bedarf nicht etwa der Mitwirkung eines „Notars“ oder einer Vergleichbaren Institution. Daneben werden die Übertragungsverträge auch nirgendwo öffentlich verwahrt (Kein US-Bundesstaat verfügt über ein Handelsregister oder eine vergleichbare Einrichtung). Allerdings richtet sich die Übertragung von bestimmten Vermögenswerten – insbesondere Immobilien – nach dem Rechts des Staates, in dem sich dieser Vermögenswert befindet.

STOCK VS. ASSETS

In den Vereinigten Staaten ist es in der Regel so, dass der Verkäufer die Veräußerung der Unternehmensanteile präferiert, wohingegen der Käufer zumeist auf den Erwerb der Vermögenswerte drängen wird. Dies liegt daran, dass der Käufer mit dem Erwerb der Anteile zugleich die gesamte Vergangenheit eines Unternehmens erwirbt, womit auch sämtliche Altverbindlichkeiten, bekannt oder unbekannt, auf diesen übergehen. Auch ein extrem sorgfältig formulierter Vertrag über die Übertragung von Anteilen vermag den Käufer nicht davor zu bewahren, dass in der Folge doch Verbindlichkeiten entdeckt werden, die von den Gewährleistungen des Verkäufers nicht umfasst sind. Dies könnte dann auf den Käufer zurückfallen (und seine Anwälte, die das Risiko nicht erkannt haben). Angenommen der Verkäufer hat den Käufer in Bezug auf eine Altverbindlichkeit freigestellt. Auch dann ist es zunächst am Käufer, den Verkäufer überhaupt ausfindig zu machen und im Anschluss zu hoffen, dass dieser über eine ausreichende Versicherung oder entsprechende Vermögenswerte verfügt, mithin überhaupt in der Lage ist, den Käufer von der Verbindlichkeit zu befreien. Wurden die Anteile von mehreren Verkäufern erworben, so muss der Käufer sie unter Umständen alle ausfindig machen oder hoffen, dass der Vertrag es gestattet, jeden Verkäufer auf die volle Schadenssumme in Anspruch zu nehmen (Gesamthaftung).

Erwirbt der Käufer lediglich die Assets, kann er sämtliche Altverbindlichkeiten, Arbeitnehmer, Rechtsstreitigkeiten, Pensionsverpflichtungen, etc. beim Verkäufer belassen. Natürlich müssen die Assets auf den Käufer übertragen werden. Dies ist regelmäßig jedoch entweder unproblematisch möglich oder angesichts des Vorteils, dass die Haftung für unbekannte Verbindlichkeiten grundsätzlich komplett ausgeschaltet wird, keinen allzu hoher Preis. Assets, für deren Übertragung ein bestimmtes Verfahren eingehalten werden muss, sind Immobilien, Marken, Patente und Kraftfahrzeuge. Zudem können auch bestimmte staatlich vergebene Lizenzen solch speziellen Vorgaben unterliegen.

Selbst bei einem Asset-Deal kann der Käufer unerwartet in die Haftung gelangen. Die Chancen dieses unglücklichen Ergebnisses steigen, wenn der Käufer entweder sämtliche Assets oder auch nur einen bestimmten Geschäftszweig erwirbt und dieses nach dem Kauf unverändert und unter den selben Namen weiterführt. Der Käufer haftet dann als Nachfolger des Verkäufers. Allerdings ist diese Haftung auf bestimmte Bereiche, hauptsächlich Produkt- und Umwelthaftung, beschränkt. Eine Umwelthaftung wird noch wahrscheinlicher, wenn der Käufer vom Verkäufer kontaminiertes Land oder dessen Betrieb nach dem Closing für Übergangsvereinbarungen nutzt. Zwar steht dem Käufer dann in Höhe des gezahlten Betrages ein Schadensersatzanspruch gegen den Verkäufer zu. Letzterer kann, wie bereits ausgeführt, unter Umständen jedoch schwerlich aufzufinden sein. Werden in den USA Assets verkauft, so wird die Verkäuferseite durch ein Unternehmen verkörpert. Ist letzteres ein großes Unternehmen und veräussert dieses lediglich Teile seiner Assets, kann sich der Käufer sicher sein, dieses im Fall von Forderungen zu ausfindig machen zu können. Im Umgekehrten Fall, dass ein kleines Unternehmen sämtliche Assets verkauft, könnten die Anteilseigner das Unternehmen kurz nach dem Verkauf auflösen. Der Haftungsumfang von Verkäufer, Geschäftsführung und Anteilseignern nach einer Unternehmensauflösung, variiert jedoch wiederum von Staat zu Staat. Im besten Fall wird der Verkäufer angemessene Rückstellungen für den Fall einer potentiellen Haftung gebildet haben und nur den überschießenden Teil an die Anteilseigner ausschütten. Wurde zu viel ausgeschüttet, kann der Käufer versuchen, die Geschäftsleitung wegen einer unangemessenen Überschussverteilung und die Anteilseigner in Höhe des jeweils zu viel erhaltenen Anteil, persönlich in die Haftung zu nehmen.

Besteht das Unternehme aus vielen Anteilseignern, könnte der Käufer deshalb am Erwerb der Assets interessiert sein, um zu verhindern, dass eine Minderheit ihn daran hindert 100 % der Anteile zu erwerben. Machen die Assets nur einen Teil des Unternehmens aus, kann die Geschäftsleitung über deren Veräusserung auch ohne Zustimmung der Anteilseigner entscheiden. Handelt es sich bei den veräußerten Assets hingegen um den überwiegen Teil aller Assets des Unternehmens, könnte die Transaktion den Aktionären zur Genehmigung vorzulegen sein. Allerdings kann ein Minderheitsaktionär den Verkauf nur dann blockieren, wenn dieser über spezielle Rechte aus Verträgen mit den anderen Aktionären verfügt oder ein solches Recht sich aus der Satzung bzw. einem anderen Gründungsdokument des Unternehmens ergibt. Natürlich kann der Käufer, sofern er mindestens 90 % der Anteile an einem Unternehmen hält, einen Squeeze Out durchführen und dadurch die verbliebene Minderheit entfernen. Ein solches Vorgehen bedarf allerdings schon eines mittelgrossen Aufwands. Dies gilt, da US-Unternehmen sich nicht entsprechend in AG und GmbH aufteilen lassen, für sämtliche Unternehmen gleichermassen. Zwar unterliegt eine in Streubesitz befindliche Aktiengesellschaft der Regulierung durch die Börsenaufsicht, dennoch bleibt sie eine Aktiengesellschaft – dieselbe Art juristischer Person, über die eine Familie Eigentümerin eines Lebensmittelgeschäfts sein könnte.

Kein US-Staat gewährt einem Minderheitsaktionär irgendwelche Vetorechte. Sofern sich nicht aus den Gründungsunterlagen oder Aktionärsverträgen etwas anders ergibt, hat der Inhaber von mehr als 50 % der Anteile an einem Unternehmen die Entscheidungsgewalt. Ein Anteil von 25 % hat damit keine besondere Bedeutung.

BESONDERE VERTRAGSBESTIMMUNGEN

Viele Punkte eines amerikanischen Akquisitionsvertrages geben schlicht das wieder, worueber Einigkeit zwischen den Parteien besteht. Andere, speziellere Themen hingegen, erfordern eine besondere Aufmerksamkeit.

Arbeitnehmer – Wie bereits oben erwähnt, steht es dem Käufer bei einem Asset-Deal nach amerikanischem Vorbild, bei fehlen besonderer Verträge mit einer Gewerkschaft, frei, ob er den Arbeitnehmern des Verkäufers eine Anstellung anbieten möchte oder nicht. Tut er dies nicht, bleiben die Arbeitnehmer beim Verkäufer, der sie entweder weiterbeschäftigt oder ihnen kündigt. Rechte gegenüber dem Käufer, stehen den Arbeitnehmern nicht zu. Entscheidet sich der Käufer dazu, Arbeitnehmer übernehmen, sollte bei der Auswahl sorgsam darauf geachtet werden, nicht gegen Antidiskriminierungsgesetze zu verstossen. Er sollte z.B. nicht das Angebot unterbreiten, nur die Arbeitnehmer unter 50 Jahren zu übernehmen.

Amerikanische Angestellte verfügen oftmals nicht über formelle Arbeitsverträge. Und selbst wenn, könnten sie in der Praxis nicht dazu gezwungen werden – und sie würden sich auch nicht verpflichtet fühlen – zur Arbeit zu erscheinen. Verlangt ein Arbeitsvertrag zum Beispiel die Einhaltung einer 30 tägige Kündigungsfrist, geht der Arbeitgeber ab dem Zeitpunkt der Kündigungserklärung davon aus, dass der kündigende Arbeitnehmer nicht mehr zur Arbeit erscheint; er möchte dies auch gar nicht. Zu den einklagbaren Teilen eines Arbeitsvertrages gehören demgegenüber Verschwiegenheitserklärungen und – bis zu einem gewissen Grad – Wettbewerbsverbote. Auch der Käufer aller Anteile an einem Unternehmen kann die Arbeitnehmer nicht zwingen zur Arbeit zu erscheinen, selbst wenn mit diesen schriftliche Arbeitsverträge abgeschlossen wurden. Erwirbt der Käufer sämtliche Assets ist nicht sicher, ob er die alten Verschwiegenheitsklauseln und Wettbewerbsverbote zu seinen Gunsten geltend machen kann. Der Käufer wäre damit gut beraten, die Unterzeichnung eines neuen Vertrages zur Bedingung für die Anstellung ehemaliger Arbeitnehmer des Verkäufers zu machen. Übernimmt der Käufer keine Arbeitnehmer, könnte auch dies ein Risiko darstellen. So könnte zum Beispiel weder der alte noch der neue Inhaber der vertraulichen Informationen in der Lage sein, sich auf die alte Vertraulichkeitserklärung zu berufen.

Bietet der Käufer den meisten oder gar allen Beschäftigten des Verkäufers (oder auch nur denen eines bestimmten Betriebes oder Geschäftszweiges) die Weiterbeschäftigung an, könnten verschiedenste Anpassungen nötig werden. Dies betrifft die Anrechnung angefallener Urlaubstage sowie noch nicht beglichene Ansprüche auf Bonuszahlungen. Oftmals erwarten – und bekommen – die Beschäftigten auch Gutschriften entsprechend ihrer Betriebszugehörigkeit.

Pensionen – Ruhegehälter sind eine Sozialleistung, die von vielen Arbeitgebern angeboten werden. Sie werden hochgradig durch den Federal Tax Code reglementiert, der informell auch als ERISA bezeichnet wird.[2] Die Einhaltung dieser Vorschriften ist eine Welt für sich, noch komplexer und kostenintensiver sogar als die Einhaltung der Umweltgesetze (siehe unten). Die Haftungsrisiken sind enorm, insbesondere wenn es sich um einen leistungsbestimmten Versorgungsplan oder einen gemeinschaftlichen Pensionsplan mehrerer Arbeitgeber handelt.

Eine ähnliche Sozialleistung stellt die Krankenversicherung dar. Die vergangenen Ausgaben des Verkäufers für diese Leistung sind jedoch kein Anhaltspunkt dafür, welchen Kosten später der Käufer gegenüberstehen könnte. Nicht nur, dass diese Kosten sich ständig verändern, zudem könnte auch der Teil der Arbeitnehmer, die der Käufer übernommen hat, älter und kränker im Vergleich zur Gesamtbelegschaft sein. Einige grössere Unternehmen können sich gegen diese Risiken versichern und die Versicherungsgesellschaften auch dazu nutzen, die Sozialleistungen zu verwalten.

Erfindungen – Amerikanische Unternehmen verwenden oftmals unternehmensübergreifende Arbeitsverträge. Diese sehen grundsätzlich vor, dass sämtliche Erfindungen eines Arbeitnehmers kompensationslos dem Arbeitgeber zufallen. Eine solche Vereinbarung ist in der Regel auch einklagbar.

In den Vereinigten Staaten kann ein Unternehmen eine Erfindung entweder besitzen oder der Urheber einer solchen sein. In Deutschland hingegen ist der Urheber immer eine natürliche Person, die dem Arbeitgeber dann die Verwendung genehmigt. Auch wenn er dazu vertraglich verpflichtet ist und damit keine andere Wahl hat, wird er doch trotzdem immer der Urheber bleiben. Der Arbeitgeber erwirbt lediglich sekundäre Rechte, wie Nutzungs- und Vertriebsrechte.

Wettbewerbsverbote – In den meisten US-Bundesstaaten kann es Arbeitnehmern für eine gewisse Zeitspanne (6 Monate bis 3 Jahre) vertraglich verboten werden, nach Ende des Anstellungsverhältnisses mit dem früheren Arbeitgeber in den Wettbewerb zu treten. Anders als in Deutschland bedarf eine solche Vereinbarung zu ihrer Wirksamkeit keiner Kompensationszahlung des ehemaligen Arbeitgebers. Einige Staaten, insbesondere Kalifornien, stehen einer solchen Restriktion jedoch ablehnen gegenüber. Der Verkäufer eines Unternehmens hingegen kann dennoch darin beschränkt werden, nach dem Verkauft mit dem Unternehmen in Konkurrenz zu treten.

NEUER EIGENTUEMER

Oftmals wird der Verkäufer dem Käufer versichern, dass ein bestimmter Punkt nie ein Problem dargestellt hat und deshalb kein Grund für weitere Nachforschungen oder vertragliche Zusicherungen bestehe. Es gibt mehrere Aspekte, bei denen diese Regel nicht gilt. (Diese Beobachtung gilt wahrscheinlich sowohl in den USA als auch in Deutschland gleichermaßen, wenn auch die deutschen Behörden wohl konsequenter in der Rechtsanwendung sind.) Zum Beispiel:

  • Handelt es sich bei dem Eigentümer um eine ortsansässige Familie, die Teil der örtlichen Gemeinde ist, könnte einem neuen Eigentümer nicht die gleiche Behandlung zuteil werden.
  • Ein neuer Eigentümer könnte neue Inspektionen (Prüfungen/ Kontrollen) auslösen.
  • Der Verkäufer könnte Teilnehmer spezieller Regierungsprogramme für Mittelständler, Minderheiten, Frauen, etc. sein, deren Voraussetzungen der neue Eigentümer nicht erfüllt.
  • Das Produkt oder geistiges Eigentum könnte von spezieller Bedeutung für die nationale Verteidigung oder auf andere Weise ausschließlich von US-Bürgern besessen werden dürfen.
  • Das gekaufte Unternehmen könnte zusammen mit den übrigen US-Unternehmen des Käufers eine Größe erreichen, die es einer verstärken Regulierung unterwirft.

RECHTSBEHELFE

Nachweis der Vollmacht – In seltenen Fällen verfügt diejenige Person, die den Vertrag im Namen des Unternehmens unterzeichnet, nicht über die notwendige Vollmacht und das Unternehmen ist nicht an die Erklärung gebunden. Kein US-Bundesstaat hat ein mit dem deutschen Handelsregister vergleichbares System. Demzufolge ist es weitaus komplexer Beweis darüber zu erbringen, dass diejenige Person oder Personen, die den Vertrag unterzeichnen, das Unternehmen auch tatsächlich binden können. Dieser Beweis wird für gewöhnlich durch verschiedene, von anderen Personen unterzeichnete Urkunden erbracht, deren Berechtigung wiederum nicht sichergestellt ist. Erfahrungsgemäß wird das deutsche Verhandlungs-Team im Rahmen der Verhandlungen über eine Transaktion jedoch eine ausreichendes Gefühl (einen praktischen Blick) dafür entwickeln, welcher der amerikanischen Verhandlungspartner über die notwendigen Vollmachten verfügt. Aber auch eine solche Person könnte keine ausreichende Vollmacht besitzen. Ein amerikanisches Unternehmen muss daher ein Paket bestehend aus einer vom „Secretary of State“ beglaubigten Gründungsurkunde, der vom „Corporate Secretary“ zu beglaubigenden Satzung und den Vorstandsbeschlüssen (evtl. auch Gesellschafterbeschlüsse) sowie eine ebenfalls vom „Secretary“ zu beglaubigende Liste der Vorstandsmitglieder samt ihrer Unterschriftenproben vorlegen. Ist die Transaktion groß genug, sollte der Anwalt des US-Unternehmens gebeten werden, ein formelles Rechtsgutachten darüber zu erstellen, dass die Transaktion ordnungsgemäß autorisiert und die unterzeichnenden Vorstandsmitglieder tatsächlich die erforderliche Vollmacht besitzen. Im Zuge der Erstellung eines solchen Gutachtens sollte der Anwalt jegliche Fehler, aus denen die Undurchführbarkeit des Vertrages folgen könnte entdecken und diese entweder beheben oder offenlegen. Der Anwalt sollte es merken, falls die Satzung eine Transaktion verbietet (sehr selten), eine besondere Zustimmung der Aktionäre erforderlich ist oder der Vorstandsvorsitzende nicht richtig gewählt worden ist. Ein US-Unternehmen verfügt in der Regel über eine Prägemaschine, die ein hervorgehobenes, rundes Siegel auf Papierdokumenten erzeugt. Dieses Siegel hat keine rechtliche Bedeutung (abgesehen von einigen Ausnahmen, wie der Länge anwendbarer Verjährungsfristen). Auch einer notariellen Beurkundung kommt fast keine rechtliche Bedeutung zu. Manchmal wird eine solche benötigt, damit ein Dokument in ein öffentliches Archiv, wie zum Beispiel dem Grundbuchamt, aufgenommen werden kann. Ein US-Notar ist jedoch, bis auf den identischen Wortlaut, nicht mit einem Notar nach deutschem Vorbild vergleichbar. Soweit sich die Garantien des Vertrages über die Verjährungsfristen bei einem normalen Handelsvertrag hinaus erstrecken sollen, könnte die Unterzeichnung unter dem Siegel diesen Zeitraum verlängern, sodass die Rechtswirksamkeit der Garantien nicht endet.

Keine Vermögenswerte – Selbst wenn sich eine Kapitalgesellschaft vertraglich verpflichtet hat, könnte sie dennoch nicht über die erforderlichen Vermögenswerte verfügen, um ihre Verpflichtungen zu erfüllen. Kein US-Bundesstaat verlangt klare, formelle Anforderungen an ein Mindestkapital. Eine Kapitalgesellschaft kann über Nacht und fast ohne Geld auf der Bank gegründet werden. Dies reicht sicher nicht aus, um die Erfüllung vertraglicher Verpflichtungen sicherzustellen. Bestehen Zweifel an der Liquidität, muss die Gegenpartei auf anderweitige Sicherheiten, wie die Verpfändung von Vermögenswerten, selbstschuldnerische Bürgschaften Dritter mit Realvermögen oder Bankbürgschaften zurückgreifen. Schließlich besteht für US-Unternehmen auch nicht die Verpflichtung einen Insolvenzantrag zu stellen.

Einstweilige Verfügungen – Ein amerikanischer Richter geht zunächst davon aus, dass eine Partei, die eine Vertragsverletzung begangen hat, nicht dazu gezwungen werden kann, diese rückgängig zu machen und den Vertrag ordnungsgemäß durchzuführen. Stattdessen wird der Richter versuchen, die geschädigte Partei durch die Gewährung von Schadensersatz in die wirtschaftliche Situation zu versetzen, die bestehen würde, wenn die andere Partei den Vertrag ordnungsgemäß erfüllt hätte. Nur selten wird das Gericht die vertragsverletzende Partei dazu verurteilen, den Vertrag zu erfüllen oder die Transaktion rückgängig machen. Die häufigsten Ausnahmen von dieser „nur Schadensersatz“ Regel sind A) wenn eine Partei damit droht, ein Geheimnis zu offenbaren oder Geistiges Eigentum der anderen Partei zu verwenden oder B) damit gedroht wird, mit der anderen Partei, unter Verletzung des Vertrages, in den Wettbewerb zu treten. Das Gericht wird dann eine einstweilige Verfügung gegen die drohende Vertragsverletzung erlassen. In extrem seltenen Fällen kann auch eine andere Partei eine einstweilige Verfügung erhalten, die den Abschluss des Kaufs verhindert. Ebenfalls nur äußerst selten wird ein Richter eine Transaktion deshalb rückgängig machen, weil er zu der Überzeugung gelangt ist, der Verkäufer sei an einem Betrug beteiligt gewesen. Die einstweilige Verfügung ist ein wirksames Rechtsmittel, welches sich von vertraglichen Rechtsmitteln unterscheidet. Der wichtigste Unterschied ist, dass ein Kläger mit „schmutzigen Händen“ kein solch wirksames Rechtsmittel erhalten wird. Wann genau von „schmutzigen Händen“ gesprochen werden kann ist nicht eindeutig. Nötig ist jedoch, dass der Beklagte Anhaltspunkte liefern kann, die auf ein unangemessenes Verhalten des Klägers hindeuten. Wurde dies auf Seiten des Klägers festgestellt, wird das Gericht weder die erlittenen Schäden ermitteln, noch die Begründetheit der unzulässigen Klage prüfen. Ein wirkungsvolles Rechtsmittel wird nicht gewährt werden.

Schäden – Die Bemessung des Schadensersatzanspruchs des Geschädigten – und insbesondere die Rechtsbegriffe um den Schaden zu beschreiben – variieren von Staat zu Staat. Zu den allgemein anerkannten Begriffen gehören „direkter, indirekter, mittelbarer und strafrechtlicher Schadensersatz“. Kurz gesagt, direkte Schäden sind Schäden die jeder Unternehmer bei einer Verletzung von Verträgen dieser Art erwarten würde. Mittelbare Schäden sind solche, die deshalb vorhersehbar sind, weil die den Vertrag verletzende Partei die Erwartungen der vertragstreuen Partei im jeweiligen Einzelfall positiv kennt. Der Käufer könnte daran interessiert sein, dass der Verkäufer die Pläne des Käufers für das Zielunternehmen nicht kennt, weil diese Kenntnis den Verkäufer zu einer Preiserhöhung veranlassen könnte. Allerdings erlaubt eine solche Geheimhaltung dem Verkäufer den Einwand, er habe spezielle Folgen eines Vertragsbruches nicht vorhersehen können, wodurch der geschädigte Käufer wiederum der Möglichkeit beraubt wird, mehr als den direkten Schaden geltend zu machen. Beiläufig entstandene Schäden sind die (für gewöhnlich geringeren) Kosten für Ersatz, Lagerung, Provisionen, etc.. Strafrechtlicher Schadensersatz ist derjenige, der sich nur vage nach dem Ausmaß der erlittenen Schäden richtet und den Zweck verfolgt, andere von einem ähnlichen Verhalten oder die jeweils vertragsbrechende Partei von einem wiederholten Fehlverhalten abzuhalten. Schäden in vertraglichen und deliktischen Situationen sind ziemlich unterschiedlich. Schäden mit deliktischem Hintergrund müssen nicht vorhergesehen werden können, um erstattungsfähig zu sein. Bei Vertragsverletzungen hingegen ist eine Vorhersehbarkeit nötig, sodass Schäden dieser Art bereits einer Begrenzung unterliegen. Kein Gericht wird Schadensersatz zusprechen, wenn dieser lediglich spekulativer Art ist oder kein Verzug vorliegt. Eine typische, vom Verkäufer in einen Vertrag eingeführte Bestimmung verlangt vom Käufer auf eine lange Liste verschiedener Schadensarten zu verzichten. Diese Tradition gründet sich in der Unwissenheit der meisten Wirtschafts-Anwälte bezüglich der Bedeutung von Vertragsbedingungen. Ist der Anwalt des Verkäufers insoweit nicht zu belehren, sollte der Käufer unbedingt selbst herausfinden, was die angemessene Grundlage der Schadensersatzbemessung im Fall einer Vertragsverletzung sein sollte. Oftmals will jedoch der Verkäufer gerade, dass der Käufer auf die einzig sinnvollen Schadensarten (wie entgangenen Gewinn) verzichtet. Der Preis des gekauften Objekts könnte jedoch präzise an den zu erwarteten Gewinn gekoppelt sein. Ebenso könnte der Preis auch das achtfache (zehn- oder zwölffache) des zu erwartenden Gewinns darstellen, aber der Verkäufer könnte wollen, dass der Käufer auf Ansprüche aufgrund solcher Multiplikatoren verzichtet. Die richtige Frage ist dann, ob eine Vertragsverletzung langfristige Auswirkungen auf die Einnahmen hat oder nicht. Falls ja, ist es angemessen auf das Vielfache abzustellen. Falls nicht (zum Beispiel, wenn der Mangel leicht und schnell behoben werden kann), sollte nicht auf das Vielfache abgestellt werden. Ein pauschaler Verzicht auf das Vielfache ist jedoch logisch nicht zu begründen.

Strafen – Deutsche Anwälte erstellen häufig Verträge, die der vertragsverletzenden Partei Strafzahlungen auferlegen. Solche Strafzahlungen sind nach amerikanischem Recht schlicht nicht einklagbar. Im besten Fall können die Parteien vereinbaren, dass ein exakter Maßstab für Schäden schwer zu vereinbaren ist und sich auf einen bestimmten Betrag als „pauschalisierten Schadensersatz“ einigen. Ob diese Schäden zusätzlich zu anderen Schäden, wegen der selben Vertragsverletzung verlangt werden können, bedarf der Nachforschung in dem jeweiligen Recht des betreffenden Staates. Schließlich darf der gewählte Betrag darf nicht unangemessenen hoch sein.

Leistungsumfang – US-Verträge enthalten für gewöhnlich Begrenzungen in Höhe eines Dollar-Betrages für Klagen des Käufers. Es gibt auch Mindestbeträge (oft jedoch bedeutungslos, weil die Prozesskosten so hoch sind, dass Klagen mit geringen Streitwerten es nicht wert sind erhoben zu werden). Die Begrenzungen können unterschiedlich auf verschiedene Arten von Schäden, wie Produkthaftung und Umweltschäden angewendet werden. Sie können (aufgrund ihrer Bedingungen) nicht auf vorsätzliche oder bekannte Falschangaben angewendet werden. Fraglich ist, ob dann, wenn der Mindestbetrag für eine Klage überschritten wurde, die Klage den Anspruch in seiner Gesamtheit oder nur in Höhe des überschiessenden Betrages erfasst? Die Probleme im Fall des Einklagens des gesamten Betrages sind: a) Der Käufer wird in der Regel weitreichendere Zusicherungen bekommen, wenn der Verkäufer weiss, dass er nicht bei jedem noch so kleinen Problem belästigt wird; Beim ersten Dollar anzusetzen, widerspricht dieser Vereinbarung; Die Parteien teilen das Risiko nicht wirklich; und b) Der Käufer ist dann geneigter, jeden auch noch so kleinen Anspruch geltend zu machen, nicht wissend, ob die Ansprüche in ihrer Gesamtheit den Mindestbetrag überschreiten, was die Beziehung zwischen den Parteien auf eine Belastungsprobe stellt. Dies ist insbesondere dann wichtig, wenn die leitenden Angestellten des Verkäufers auch nach dem Closing eine Rolle in dem Unternehmen (meist als Manager) spielen sollen.

Zeitpunkt von Klagen – Unabhängig vom Fortbestand der Ansprüche, kann der Käufer entweder verpflichtet sein, Ansprüche unmittelbar nach deren Entdeckung gelten zu machen oder auch nicht. Wird eine Klage aufgrund von Ansprüchen Dritter erhoben, muss der Verkäufer natürlich informiert werden, damit er sich verteidigen kann. Richtet sich die Klage dagegen lediglich gegen den Verkäufer, aufgrund falscher Angaben, verursacht das Erfordernis der unverzüglichen Geltendmachung von Ansprüchen nur unnötige Irritationen. Der Käufer könnte noch gar nicht wissen, ob die Vertragsverletzung ernsthafte Schäden nach sich zieht. In dem Maße, in dem der Verkäufer dann durch die verspätete Geltendmachung einen Schaden erleidet, sollte der Anspruch natürlich gekürzt werden. Falls eine Klage vor Ablauf der Garantien erhoben wurde, kann sie sich dann nach deren Ablauf dadurch erhöhen, dass sich entweder der Schaden vergrößert oder ähnliche Vertragsverletzungen begangen werden?

Insolvenz – Amerikanische Verträge enthalten immer eine Klausel, die für den Fall der Insolvenz (oder einer anderen wirtschaftlichen Notlage) die Vertragsverletzung einer Partei statuiert, wodurch der Vertrag aufgelöst wird. Diese Bestimmung (sog. ipso facto Klausel) ist ebenfalls schlichtweg unwirksam. Die Insolvenz und die Folgen für US-Verträge bieten genügend Stoff für einen eigenen Artikel. Sehr einfach gesagt hat diejenige Partei, die sich in einer Insolvenz befindet die Wahl die bestehenden Verträge entweder fortzuführen oder einfach zu beenden. Der nicht insolvente Vertragspartner hat dieses Wahlrecht nicht. Sehr oft leiten diejenigen Personen, die das Unternehmen vor der Insolvenz geleitet haben, es auch noch während der Insolvenz und nach einer Sanierung. Wenn der Verkäufer Insolvenzantrag gestellt hat, sind die Entschädigungsansprüche des Käufers wenig oder gar nichts wert. Erhält ein Gläubiger innerhalb einer kurzen Zeitspanne vor Stellung des Insolvenzantrages Zahlungen vom insolventen Schuldner auf eine alte Schuld, wird dies als „Vorzugszahlung“ bezeichnet und der Gläubiger muss den erhaltenen Betrag an den Insolvenzverwalter zurückzahlen. Die Gelder werden dann gleichmäßig unter allen Gläubigern verteilt. Allerdings kann es auch sein, dass der Gläubiger nie nach den Geldern gefragt wird, weshalb es immer besser ist diese Zahlungen erhalten zu haben, als leer auszugehen.

Sadbagging – Viele Staaten erlauben es dem Käufer sich auf die Garantien des Verkäufers zu verlassen, selbst wenn der Käufer ahnt oder sogar weiss, dass diese nicht korrekt sind. Dies ist oftmals ein Schock für deutsche Juristen, die mit dem amerikanischen Recht weniger Vertraut sind. Dies gestattet dem Käufer nach dem Closing einen Schadensersatzanspruch geltend zu machen, der aus der Verletzung einer vertraglichen Garantie des Verkäufers resultiert, selbst wenn der Verkäufer die den Vertrag verletzende Information vor dem Closing bekanntgegeben hat, aber dies nicht als formelle Ausnahme zu den vertraglichen Garantien kenntlich gemacht hat. Gleiches gilt, wenn der Käufer über ein Problem informiert ist, der Verkäufer jedoch nicht. Dieses Vorgehen wird manchmal als auch „close and sue“[3] bezeichnet. Der Käufer kann sich also nur auf die Sprache des Vertrages und die angehängte Mängelliste verlassen. Damit dies möglich ist, muss der Vertrag eine Bestimmung enthalten, die ein solches Vertrauen erlaubt. Die Möglichkeit informell bekanntgegebene Informationen (wie zum Beispiel in einem Due Diligence Raum) zu ignorieren, ädert die komplette Natur der Due Diligence und senkt die Anforderungen an den Käufer und sein Team aus Juristen und Wirtschaftsprüfern. Einen ausführlichen Katalog der vorgelegten und geprüften Unterlagen zu erstellen, ist in den Vereinigten Staaten nicht nötig, was die Kosten dieses Verfahrens reduziert.

Fortbestand – Soweit im Vertrag nichts anderes vereinbart ist, verfallen die Garantien und Gewährleistungen des Verkäufers zum Zeitpunkt des Closing. Dem Käufer stehen für den Fall, dass er weniger bekommt als garantiert wurde, dann keine Rechtsmittel zur Verfügung. Aus diesem Grunde legt der Vertrag ausdrücklich fest, dass Garantien und Gewährleistungen nach dem Closing fortbestehen. Wie lange sie fortbestehen, ist für gewöhnlich das Ergebnis intensiver Verhandlungen. Einige Risiken möchte der Käufer dauerhaft auf den Verkäufer übertragen. Um dies zu erreichen kann eine Klage des Käufers nicht auf Garantien gestützt werden, sondern muss auf einer positiven Bestätigung des Verkäufers bezüglich der Haftung beruhen. Ein weiterer, hilfreicher vertraglicher Mechanismus wäre die rechtsverbindliche Zusicherung des Verkäufers, den Käufer von bestimmten Risiken oder Ansprüchen für die Zeit nach dem Closing freizustellen.

Auch die jeweils anwendbaren Verjährungsfristen variieren von Bundesstaat zu Bundesstaat. Allgemein gesagt, kann die Frist zur Erhebung einer Klage zwar verkürzt, jedoch nicht verlängert werden. Die Tatsache, dass der Geschädigte die Vertragsverletzung nicht positiv kennt, ändert nichts an der Verjährungsfrist, sofern die andere Partei die Vertragsverletzung nicht aktiv vertuscht. Um die Sache noch komplizierter zu machen hat auch der Staat in dem die Klage erhoben wird (nicht der Staat, dessen Recht auf den Vertrag Anwendung findet) Einfluss auf die Länger der Verjährungsfrist. Als Ergebnis kann in dem Fall, dass der Vertrag eine Verjährungsfrist von 6 Jahren vorsieht, die Klage aber in einem Staat erhoben wird, in dem die Verjährungsfrist nur 3 Jahre beträgt, der Verkäufer eine gute Erfolgsaussicht haben.

Litigation – Prozesse, die einen wirtschaftlichen Vertrag zum Gegenstand haben, sind immer teuer und schmerzhaft. Zudem lenken sie vom Zweck des Unternehmens ab. Dies gilt in weit höherem Maße für die USA als für Europa, was überwiegend an einem aufwendigen vorprozessualen Beweisverfahren und der Aufnahme eidesstattlicher Aussagen (wichtige Bestandteile eines amerikanischen Prozesses) liegt. Während der Ermittlungen kann jede Partei die andere zwingen, alle Arten von Dokumenten zu ausfindig zu machen und offenzulegen, die sich auf die Streitigkeit beziehen.[4] Zu allem Übel zahlt die obsiegende Partei ihre Prozesskosten selbst und die unterliegende Partei besitzt selbst dann, wenn kein ernsthafter Grund für die Klage bestand, keinerlei Abschreckungsmittel, mit dem sie die ihr entstandenen hohen Kosten ersetzt verlangen könnte.

Das Spektrum möglicher Schadensersatzurteile kann demnach sehr weitreichend sein. Aus diesen Gründen legen Amerikaner weitaus mehr Wert auf eindeutige Verträge oder finanzielle und vertragliche Vereinbarungen, die das Risiko eines Prozesses möglichst minimieren. Schiedsverfahren werden nicht anders beurteilt. Die meisten amerikanischen Unternehmen wissen um das Risiko eines Verfahrens unter Beteiligung von Geschworenen und sind daher bereit auf ein solches zu verzichten. Sie wissen auch nicht, dass die Deutschen sich noch weit mehr vor einem Geschworenenprozess fürchten und das allein die Drohung mit einem solchen Verfahren dazu genutzt werden kann, eine für den deutschen Verhandlungspartner nachteilige Einigung zu erzwingen. Das US-Recht ist jedoch in der Regel ziemlich flexibel und berücksichtigt zudem die Vertragsfreiheit der Parteien. Wenn allerdings ein Richter einzelne Vertragsbestimmungen auslegen soll, die zwar in Deutschland als Standard angesehen werden, in den USA jedoch unbekannt sind, kann das Ergebnis weit weniger sicher vorhergesagt werden, als dies bei standardmäßigen US-Vertragsbestimmungen der Fall wäre.

VERSCHIEDENES

Unbestimmte Wörter – US-Anwälte erstellen umfassende und detaillierte Verträge. Diese erwecken den Eindruck sehr präzise zu sein, sind es aber nicht. Dies liegt zum Teil daran, dass der Anwalt schlicht faul und nachlässig ist, manchmal aber auch daran, dass amerikanische Anwälte an gewissen Punkten zu der Einsicht gelangen, dass es einfach nicht möglich ist, sich noch präziser auszudrücken. Dies ist z.B. der Fall bei Begriffen, wie: angemessen, wirtschaftlich zumutbar, größte Mühen, größte zumutbare Mühen, größte wirtschaftliche Mühen, größte wirtschaftlich zumutbare Mühen, erheblich und guter Glaube. Weniger unbestimmt sind Begriffe, wie: Kenntnis, nach bestem Wissen und nach bestem Wissen nach der Prüfung. Auch der Begriff „grobe Fahrlässigkeit“ wird oft verwendet und bedeutet in der Praxis, dass ein Richter oder eine Jury zwar der Auffassung sind, dass der Täter hinsichtlich der Folgen seiner Handlungen Vorsatz besessen hat, dies aber nicht bewiesen werden kann. In Bezug auf die „Kenntnis“ gibt es eine US-Standard-Technik, bestimmte Mitarbeiter zu benennen und diese mit Ermittlungen zu beauftragen. Dies bewahrt den Verkäufer davor, die einfachen Angestellten über ihr Wissen befragen zu müssen. Auf der anderen Seite will der Käufer sicher sein, dass dieses Wissen auch die Kenntnisse der verschiedenen Facharbeiter umfasst und nicht nur solches des Führungskräfte, die im Zweifel nie einen Fuß in die Fertigungsbereiche des Unternehmens gesetzt haben.

Corporate Housekeeping, Details – Amerikanische Unternehmen unterscheiden sich sehr in der Beachtung von Formalitäten und der Ablage ihrer Unterlagen. Börsennotierte Unternehmen müssen umfangreiche behördliche Vorschriften einhalten und werden von ihren Aktionären genauestens überprüft (und womöglich sogar verklagt). Entscheidungen und Beziehungen müssen Mindeststandards erfüllen und Unterlagen werden sorgfältig aufbewahrt. Im Gegensatz dazu müssen Familienunternehmen keine Klagen von Aktionären befürchten und rechtliche Formalitäten werden von diesen oft als Geldverschwendung betrachtet. Ein in Familienbesitz befindliches Unternehmen wird daher ganz andere Probleme aufwerfen und ein weit umfangreicheres „corporate housekeeping“ erfordern. Das bedeutet, dass verlorene Unterlagen ausfindig gemacht werden müssen bzw. nicht existierende Unterlagen – Jahre später – nachträglich erstellt werden müssen. Wird ein kleiner Teil eines großen, börsennotierten Unternehmens erworben, könnte das Problem auftauchen, dass diesen Assets nicht genügend Bedeutung zugemessen wurde, um ihnen ausreichende Aufmerksamkeit zu widmen. So könnten zum Beispiel die Umsätze und Aufwendungen zu gering gewesen sein, um in der Bilanz aufzutauchen. Ist der Verkäufer ein Private-Equity-Fond, könnten die Manager auch nicht vertraut genug mit dem Geschäftsfeld des Unternehmens sein.

ABSCHLIEßENDE ZUSAMMENFASSUNG

Auch wenn deutsche und amerikanische Geschäftsleute denken, dass sie dieselbe Sprache sprechen, mit ähnlichen Bilanzen hantieren und ähnliche Produkte und Dienstleistungen anbieten, so beinhalten die beiden Rechtsordnungen, auch wenn sie zum Teil dieselben Begriffe verwenden, doch ziemlich unterschiedliche Konzepte. Deutsche, die in den USA Unternehmen kaufen, können durchaus auf deutsche Standards abstellen und gemeinschaftliche Entscheidungen finden. Die Durchführung einer Due Diligence Prüfung nach deutschem Vorbild, treibt jedoch lediglich den Preis der Transaktion in die Höhe, ohne dass daraus irgendein Nutzen gezogen werden könnte. Die insoweit verschwendeten Mittel sollten besser dafür verwendet werden, präzise und vollständige Garantien zu erstellen und den Anhang des jeweiligen Vertrages gründlich zu überprüfen. [5]

Rudolph Houck
rhouck@rhoucklaw.com
February 2012

  1. Aufgrund der von Staat zu Staat unterschiedlichen Gesetze ist es nicht immer moeglich generelle Aussagen zu taetigen, die die gesetzlichen Vorgaben eines jeden Staates erfassen. Zur Vermeidung staendiger Wiederholungen, soll diese Warnung fuer den gesamten Beitrag gelten.
  2. ERISA = employee retirements income security act = Pensionsfürsorge.
  3. = abschließen und klagen.
  4. Ein anderer Fall von zwangsweiser Offenlegung sind die sog. Hart Scott Rodino “4c”-Dokumente. Übersteigt das Volumen einer Akquisition den Betrag von USD 70 Mio., muss ein Antrag an das Justizministerium oder die Kartellbehörde gestellt werden. Dieser muss alle Dokumente enthalten, aus denen sich mögliche Marktauswirkungen der Akquisition ergeben. Ergibt sich, dass der Käufer nach Abschluss des Kaufs in der Lage ist, die Preise zu erhöhen oder auf andere Weise Einfluss auf den Markt zu nehmen, kann die Regierung die Dokumente dazu nutzen, die Transaktion zu untersagen.
  5. Im Interesse der Kürze wurden zahlreiche Anmerkungen zu Punkten, wie ein- und zweistufige Transaktionen, spezielle Vermögenswerte wie Immobilien, das Umweltrecht, Steuern und spezielle steuerlichen Besonderheiten, Visa, Überweisungen und die Rolle von Bankbürgschaften in den USA, nachträglich entfernt.