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Kevin Douglas

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Kevin Douglas has deep experience representing public companies on corporate and securities laws related matters, including companies within the healthcare industry. Kevin’s public company practice focuses on corporate governance matters, securities laws compliance, mergers and acquisitions, corporate finance and shareholder activism. His representative experience has ranged from providing SEC disclosure advice to the audit committee of a Fortune 100 company to representing an NYSE-listed company in connection with its $4.3 billion acquisition by another public company to representing another NYSE-listed company in connection with its issuance of $2.2 billion in senior notes. Kevin has also represented private companies in a wide variety of mergers and acquisition, corporate finance, and other corporate law matters.

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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

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

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

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

When a public company is contemplating an acquisition, lawyers should consider early in the acquisition process whether the execution of the acquisition agreement and/or the completion of the acquisition may trigger a filing under Item 1.01 or Item 2.01 of Form 8-K.

Item 1.01

Item 1.01 of Form 8-K requires disclosure when a registrant enters into a “material definitive agreement” outside of the ordinary course of business.  In the context of an acquisition, this in most cases would potentially be triggered by the execution of the definitive acquisition agreement (rather than a letter of intent or term sheet).Continue Reading Does Your Acquisition Agreement Trigger a Form 8-K?

While developments with respect to the Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) section in SEC disclosure documents have garnered less attention in the legal press in recent years than certain other areas in the SEC disclosure arena, preparing and crafting MD&A disclosures remains a major area of focus for SEC disclosure lawyers.

The MD&A is the section of a periodic report or registration statement in which management provides its analysis of the registrant’s financial condition and results of operations, thereby providing critical insight into the views of management regarding the key drivers and trends impacting a public company’s financial performance.

Disclosure lawyers should note these key tips and observations when preparing or reviewing MD&A:

Continue Reading 12 Things You Need to Know About Drafting Management & Discussion Analysis (MD&A)

As equity valuations of public companies remain high in comparison to recent historical norms, the use of public company stock as an acquisition currency by SEC registrants in acquisitions of private companies will continue, particularly if interest rates continue to rise, thus increasing the costs associated with leveraged transactions. This blog explores legal considerations associated with the issuance of stock by a public company in connection with its acquisition of a private company.
Continue Reading Complexities of Issuing Public Company Stock in Acquisitions of Private Companies

Public companies that engage in capital raising activities from time to time must consider whether it is advisable to have an effective shelf registration statement on Form S-3 on file in advance of raising capital, or whether to simply wait to file a Form S-3 until such time that the company desires to raise capital.

Background

As background, shelf registration statements may be utilized by public companies eligible to use Form S-3 (which generally requires, among other things, that an issuer have at least $75 million in non-affiliate common equity public float and have filed all required SEC reports over the last 12 months), to register the issuance of various classes of the company’s securities on a delayed or continuous basis, to be issued in public offerings from time to time, either by the issuer or selling security holders.  At the time of an offering, these securities are then sold in a “take down” off the shelf utilizing a prospectus supplement describing (among other things) the terms of the offering and incorporating by reference information about the issuer.  Shelf registration statements generally only remain effective for three years.Continue Reading Form S-3: To File or Not to File, That is the Question . . .

I wrote an article published by Securities Regulation Daily discussing the upcoming “say-when-on-pay” votes that many companies will hold during their annual meetings this year. Because Dodd-Frank mandates that the vote be held every six years, a great portion of companies last held the say-when-on-pay vote immediately following the enactment of Dodd-Frank in 2011 and…

The Wall Street Journal yesterday published an interesting article regarding the SEC Staff’s attention to non-GAAP financial measure disclosure issues in the SEC comment letter process. The article highlights the ongoing focus of the SEC staff on non-GAAP financial disclosure issues following the revised (and more stringent) non-GAAP financial guidance promulgated by the SEC in the spring of 2016, as well as inquiries that were received from a sizeable number of public companies in 2016 from the SEC Division of Enforcement focused on non-GAAP compliance.
Continue Reading SEC Staff Continues Focus on non-GAAP Financial Disclosures

From the Bass, Berry & Sims Blog Network
From the Bass, Berry & Sims Blog Network

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