Schulte Roth & Zabel partner Heather Wyckoff recently discussed Florida’s latest anti-ESG law with Pensions & Investments reporter Rob Kozlowski. Heather discusses the limited impact of this law given that managers in practice already seek out profitable investments, as well as how the use of the term “ESG” as an umbrella may not be useful given the broad scope of issues covered at various levels of an investment management business.

Read the article here.

In an article for the Harvard Law School Forum on Corporate Governance, Schulte Roth & Zabel partner Ele Klein and associate Brandon Gold detail the proxy contest Carl Icahn launched at Illumina in an attempt to replace three of the nine directors of the company’s Board, including the CEO and the Board chairman.

The circumstances surrounding gene sequence business Illumina, Inc.’s acquisition of GRAIL, Inc. for $8 billion in cash and stock and Carl Icahn’s proxy contest to hold the board accountable provide a cautionary tale for directors who feel invincible, as well as lessons for shareholders seeking to hold boards accountable in light of the SEC’s new universal proxy regime.

In his recent article for Commercial Leasing Law & Strategy titled “Third Circuit: Pre-Bankruptcy Commercial Lease Termination Not Fraudulent Transfer,” Michael L. Cook discusses pre-bankruptcy commerical lease termination in cases In re Pazzo Pazzo Inc. and In re Great Lakes Quick Lube L.P. 

Is an insolvent debtor’s pre-bankruptcy termination of a commercial lease a fraudulent transfer? The Third Circuit said no when it held that a lessor’s pre-bankruptcy termination of the debtors’ lease and purchase option “was not a transfer under Bankruptcy Code §548(a)(1)(B).” In re Pazzo Pazzo Inc., 2022 WL 17690158 (3d Cir. Dec. 15, 2022). But the Seventh Circuit held that a Chapter 11 debtor’s pre-bankruptcy “surrender of [two] … leases to [its landlord] could be regarded as a preferential [or fraudulent] transfer.” In re Great Lakes Quick Lube L.P., 816 F.3d 482 (7th Cir. 2016). Reversing the bankruptcy court’s holding that “the terminations were [not] transfers, … preferential or fraudulent,” the Seventh Circuit stressed that the debtor’s termination of its “interest in property — … the leaseholds — which it parted with by transferring that interest to [the landlord],” fell within the broad definition of “transfer” in the Bankruptcy Code (Code). Id. at 485. A close reading of both Pazzo and Great Lakes, however, shows that the circuits are not split, and that the reasoning of both courts can be reconciled on their facts.