On August 20, 2019, the SEC staff published new interpretations in the form of Compliance and Disclosure Interpretations regarding Inline XBRL, which affirmed the guidance we previously posted about the new exhibit 104 cover page tagging requirements.

The new interpretations are numbered as Questions 101.01 through 101.09 at this link.

Continue Reading SEC Publishes Interpretations about Inline XBRL and Exhibit 104 (Cover Page Interactive Data File)

Don't miss Jay Knight discussing the new SEC FAST Act requirements for cover page tagging in an upcoming webinar. Large Accelerated Filers are now beginning to comply with the SEC’s new FAST Act requirements for cover page tagging using Inline XBRL. During the implementation process, questions have arisen regarding exhibits, and other aspects of technical and rule compliance.

I am excited to be co-presenting in an upcoming free webinar on this topic titled, “SEC Fast Act Cover Page Tagging Update,” which is being sponsored by XBRL US, a leading non-profit organization supporting the implementation of digital business reporting standards. Bryan Castrantas, Senior Manager, Richey May & Co. LLP is co-presenting with me, and he will provide a technical review of the XBRL requirements and lessons learned from submissions to date.  Attend this session to get further clarification on the rule requirements for issuers, plus a technical review of the preparation and submission process for cover page tagging.

The webinar will be held on Thursday, August 29, 2019, from 3:00 – 4:00 p.m. EST. For more information and registration, please go to XBRL.US.

Advance Notice Bylaw Provisions

A recent Delaware case, Saba Capital Master Fund, Ltd. v. Blackrock Credit Allocation Income Trust, highlights the importance of advance notice bylaws and the careful application of the terms of such bylaws by public companies who may be subject to activist campaigns.

As backdrop, following Delaware cases in 2008 (Jana Master Fund Ltd. vs. CNET Networks, Inc. and Levitt Corp. vs. Office Depot, Inc.) which interpreted ambiguous advance notice bylaw provisions in favor of insurgent shareholders attempting to nominate their own slate of director nominees, a large number of public companies (particularly large-cap companies and public companies incorporated in Delaware) amended their advance notice bylaw provisions to eliminate perceived vulnerabilities in their advance notice bylaws and expand the information required to be provided by shareholder proponents (known as second generation advance notice bylaw provisions).

While the focus on advance notice bylaw provisions (including the law firm commentary on this subject) has waned over the last decade, advance notice bylaws remain an important aspect of a public company’s preparedness for shareholder activism.

Continue Reading Revisiting Advance Notice Bylaw Provisions and Proxy Access

Note: We updated this post (originally posted last week) to add new frequently asked questions about when to reference Exhibit 104 in Form 8-Ks and about the phase-in schedule for all companies. 

Question:  In a Form 8-K, are you required to explicitly reference Exhibit 104 in the Exhibit Index?

Answer: In discussions with SEC Staff within the SEC’s Division of Corporation Finance, we received the following guidance related to a registrant’s Exhibit 104 reference obligation in 8-Ks:

The Bass, Berry & Sims Corporate & Securities Practice Group recently hosted its first in a series of complimentary webinars exploring various public company-related securities law issues.

The first webinar, Key Insights into Financial Reporting Considerations: MD&A, Earnings Releases & Regulation FD, was held on July 18 and shared guidance on the preparation of the Management Discussion & Analysis (MD&A), key disclosure issues regarding earnings releases and calls, and important considerations for public companies under Regulation FD.

Continue Reading 5 Key Takeaways from Our Public Company Financial Reporting Webinar

In an article for The D&O Diary published on July 16, 2019, Jay Knight unpacked some practical tips that outside parties may want to employ when responding to comments by the Securities and Exchange Commission (SEC) in connection with the standard filing review in the SEC’s Division of Corporation Finance. I was pleased to submit a guest post for The D&O Diary unpacking some practical tips that outside parties may want to employ when responding to comments by the Securities and Exchange Commission (SEC) in connection with the standard filing review in the SEC’s Division of Corporation Finance. These practice tips include:

On May 3, 2019, the SEC proposed amendments to its rules and forms which would revise the disclosure requirements for financial statements relating to acquisitions and dispositions of businesses. We believe that most aspects of the proposed amendments, if adopted in current form, are thoughtful revisions to existing rules and will be beneficial to public companies, although we believe that a couple of aspects of the proposed amendments noted below may bear reconsideration by the SEC.

Key aspects of the proposed amendments include the following:

  • Updating the significance tests by:
    • increasing the significance threshold for a disposed business (triggering the requirement to file pro forma financials) from 10% to 20% (mirroring the existing percentage threshold for acquired businesses).
    • revising the “income test” in the definition of “significant subsidiary” under Regulation S-X, particularly to include a revenue as well as (after-tax) income component to such test, which will eliminate anomalies existing under the current rules (which do not include a revenue component) when a registrant has net income close to zero and a filing may be triggered even where a registrant is much larger than an acquired or disposed company.
    • revising the “investment test” in the definition of “significant subsidiary” under Regulation S-X, including to provide that the purchase price in an acquisition or disposition (which is the numerator in such test) will be compared to the equity value of the registrant rather than (as under the current rules) to the book value of the total assets of the registrant.
    • expanding the use of pro forma financial information in measuring significance, which may provide added flexibility to registrants in determining significance under certain circumstances.

Continue Reading SEC Proposes Rule Amendments to Revise Financial Statement Requirements for Acquisitions and Dispositions

The Staff of the Securities and Exchange Commission (the Staff) issued a Public Statement regarding the probable transition away from the London Inter-bank Offered Rate (LIBOR) after December 31, 2021, as a result of the expectation that a number of private-sector banks currently reporting information used to establish LIBOR will cease to do so after 2021 when their reporting commitment ends.

As a result, the publication of LIBOR may cease immediately following the end of 2021 or may result in LIBOR’s regulator determining that the quality of the LIBOR metric has diminished such that it is no longer representative of its underlying market.

Continue Reading Managing LIBOR Transition – SEC Considerations

Tatjana Paterno will take part in a CLE webinar titled, “Negotiating Earnouts in M&A Transactions: Effective Approaches to Bridging the Valuation Gap.”

Bass, Berry & Sims attorney Tatjana Paterno will  take part in a CLE webinar titled, “Negotiating Earnouts in M&A Transactions: Effective Approaches to Bridging the Valuation Gap” on July 25, 2019.  The webinar, hosted by Strafford Publications, will guide deal counsel in negotiating and structuring earnout clauses in M&A agreements that benefit buyers and sellers and reduce the likelihood of post-closing disputes. The webinar will also review these and other challenging issues:

  • Effective approaches in negotiating performance benchmarks for deals involving earnout provisions
  • Post-closing concerns that buyers and sellers should anticipate and address during deal negotiations
  • Tax issues that counsel must understand and consider regarding earnouts

This 90-minute webinar will be held on Thursday, July 25, 2019 from 1:00 p.m. to 2:30 p.m. E.D.T. and is eligible for CLE credit. To receive a complimentary pass please reach out to Tatjana Paterno. For more information and registration visit the Strafford website.

Please join the Bass, Berry & Sims Corporate & Securities Practice Group as they launch a series of complimentary webinars exploring various public company-related securities law issues. Please join the Bass, Berry & Sims Corporate & Securities Practice Group as they launch a series of complimentary webinars exploring various public company-related securities law issues. These quarterly CLE programs will be an extension of our Securities Law Exchange Blog and will feature timely and practical guidance to SEC disclosure counsel on key topics of interest.

The first Securities Law Exchange webinar, hosted by Bass, Berry & Sims attorneys Kevin Douglas and Scott Bell on July 18, 2019 from 12:00 p.m. – 1:00 p.m. CST, will highlight key financial reporting considerations for public companies. The discussion will include practical advice regarding the preparation of the Management Discussion & Analysis (MD&A), key disclosure issues regarding earnings release presentations, and important considerations for public companies under Regulation FD.

Continue Reading WEBINAR: Key Insights into Financial Reporting Considerations: MD&A, Earnings Releases & Regulation FD