Nicolette Kost de Sèvres

Please see our article on cash SRT deals.

6

This month, Derivatives and Structured Products partner Fabien Carruzzo will participate on “The Future of CDS” panel at ISDA's Annual General Meeting in Tokyo on Thursday, April 18th. If you're interested in learning about changes that could be made to the #credit #derivatives market, there is still time to register: https://lnkd.in/d4VK_rA2

3

Here is an article written by my colleague Marzia Schilleci and me discussing inherited personal jurisdiction over buyers in asset deals, also known as successor jurisdiction. In a recent ruling captioned Lelchook v. Société Générale de Banque au Liban SAL, the New York Court of Appeals held that an acquiror of all assets and liabilities of a target inherits the seller's jurisdictional contacts to New York, even in the absence of a merger or other universal succession. This means that the buyer can be sued in New York over the seller's prior acts, even if the buyer itself has no relevant contacts to New York. The court's decision aligns with similar rulings in various states across the US. Our article discusses the reasoning behind the court's decision, its relationship to the related concept of successor liability, and what potential buyers should keep in mind when evaluating and structuring asset deals involving targets with liability risks that are or may become the object of a lawsuit in New York. #PersonalJurisdiction #SuccessorJurisdiction #SuccessorLiability #AssetDeals #NewYorkLaw #LongArmStatute #CPLR302

24

2 Comments

With Donald Trump’s recent election victory in the US, the new administration’s approach to Big Tech antitrust enforcement remains a critical area to watch. Throughout his campaign, Mr. Trump didn't detail specific antitrust strategies, leaving the direction of enforcement largely uncertain. In contrast, Vice President-elect J.D. Vance has openly advocated for robust antitrust actions, specifically targeting Big Tech—a stance that suggests potential continuation of regulatory scrutiny under the incoming administration. A distinctive feature of Mr. Trump’s second term is his promise to build an unconventional cabinet, potentially featuring influential business leaders. Among them is Elon Musk, the high-profile CEO of Tesla and SpaceX, who is expected to advise the administration. Mr. Musk has been an outspoken critic of monopolistic practices in tech; he has openly supported antitrust actions against Apple, endorsing the EU’s decision on Apple’s anticompetitive behavior in digital app distribution. Musk has also called for the breakup of Amazon to reduce market concentration and enhance competition, reflecting his stance on fostering a more balanced competitive landscape. These factors collectively suggest a trajectory toward sustained, possibly even heightened, antitrust enforcement against major technology firms in the US. At LitFin, we are closely monitoring these developments, as early signals could provide valuable insights into future market dynamics.

28

Interesting insights from my partner, Jason Waite, on the potential impacts of the U.S. Department of the Treasury's new outbound investment rule. The rule, which takes effect on January 2, 2025, will restrict outbound investment in Chinese companies in certain sensitive sectors and impose a variety of requirements on U.S. persons and entities.

6

Great to be involved in the European debut of LF Dealmakers and IP Dealmakers today. Looking forward to moderating the panel on Using Litigation Finance and Insurance in discussion with Jon Scahill, Geoffrey White and Andrew Mutter. Thanks to Wendy Wei Chou and Aaron Rawcliffe for bringing the forum to Europe. #litigationfunding #litigationfinance #intellectualproperty

117

3 Comments

Lawyers celebrating being on the wrong side of history…..? Latham & Watkins winning a case over turning the landmark USA Supreme Court decision of 1984 known as the Chevron Deference in a case pressed then by the Natural Resource Defence Council Inc. See: https://lnkd.in/e-6vtDPQ. https://lnkd.in/ecns3pzq Can you ride a horse in two directions? What does history tell us? Deep breath, reflect, consider, then act? I’m sure there’ll be a set of brilliant legal arguments (and chunky fees) as to why the Latham & Watkins team did the right thing in terms of over turning the Chevron Deference with a right leaning sympathetic Supreme Court split. But what does this all really mean? I agree with David Carlin it’s not good on first sight. However, Relentless Inc., a small New England fishing company will be happy for now. The fishermen” had challenged an agency rule requiring private fishing companies to pay for expensive at-sea government observers to ride on their vessels and collect data on federal fisheries.” As someone whose father was at sea and died on the bridge of his ship in Galveston, Texas, in May 1980, I have a natural empathy for and with seafarers of all kinds. My father would have had “fine words” for costly sea-borne bureacrats. And/ but……the world has changed in the 44+ years since he died. Natural resource, climate, social inequality, and political volatility risks are manifest. I read L&W’s ESG page with some wry amusement: “Our cross-disciplinary approach draws on Latham’s experienced team of regulatory, transactional, and litigation practitioners to provide a comprehensive offering that helps clients align with the many facets of ESG, including responsible investment, sustainability, and corporate integrity issues.” Is there something deeper going in - is there a positive take for the sustainability community? Yes, the USA Supreme Court is immensely important whatever it’s hue and right-centre-left split. However, are these cases the roar of the dinosaurs protecting 250 years of extractive capitalism, gender bias, and inequality as we seek a regenerative and just geo political economy for the future? Whether on the E side ( Chevron Deference) the S side ( Roe vs Wade) or the G side ( Citizens United vs Federal Exchange Commission) the pattern is clear. The dinosaurs are roaring through the courts, there’ll be stormy weather ahead, but a new political and social economy driven by sustainable business and truly responsible investment is needed. The U$ 120 trillion backing the United Nations Principles for Responsible Investment tells us it is so. #Esg when deployed at the systemic, strategic and operational levels can help us bridge to the next future-fit economy. Margherita Cornaglia Matt Meyer Jeroen Ouwehand David Alfrey Luiz Cláudio Allemand

49

4 Comments

Much has been written about the US expatriation tax regime. My recent article highlights some of the non-tax factors warranting consideration. [link] #taxation #expatriation #SuccessionPlanning #FamilyBusiness

20

1 Comment

Is hosting designated members of Hezbollah or Hamas at a conference a violation of U.S. sanctions laws? The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) certainly thought so, at least initially. In 2022, the Foundation for Global Political Exchange sent a letter to OFAC asking whether including designated and non-designated members of Hezbollah as speakers in a conference it was organizing in Beirut was lawful. OFAC replied that the provision of a platform for Hezbollah members to speak would be a "prohibited service" and denied a specific license application. In 2023, the Knight First Amendment Institute at Columbia University filed a lawsuit on behalf of the Foundation for Global Political Exchange challenging OFAC’s denial. On 12 November, the parties settled and dismissed the case (Foundation for Global Political Exchange v. Department of the Treasury, No. 1:23-cv-03777 (D.D.C.)). OFAC conceded that “including sanctioned persons as speakers at the Beirut Exchange, including actions ordinarily incident to facilitating their participation as speakers, under the circumstances you have described, is not a service prohibited by U.S. sanctions and thus no authorization is necessary.” The case raises important questions on the limits of free speech in democratic societies and the role of government in balancing freedom of expression with security concerns falling within the state's police powers, all issues that the Supreme Court of the U.S. has grappled with for over a century. Nicholas Noe, a director of the Foundation for Global Political Exchange, welcomed the settlement, which he said limited the government’s ability to shut down important political discussions. "Free and open political dialogue is essential for achieving mutual understanding and for finding pathways to peace." Nicholas Noe added, "Americans can’t possibly understand the world around them if the government gets to decide which foreign citizens they can speak with.” This decision will have an important impact for social media platforms such as Facebook and Twitter that provide a platform for persons designated under U.S. sanctions law, as well as for human rights organizations such as Geneva Call, the International Committee of the Red Cross - ICRC and Human Rights Watch that engage in dialogue with armed groups, some of whose members are designated under U.S. sanctions laws. Read more here: https://lnkd.in/eaX5r8je and here: https://lnkd.in/ephrX3SC

20

When Overreach Meets Accountability: 🗽SEC's Dealer Rule Vacated on the Day Gensler Announces Resignation🫡 🔄In a poetic twist of fate, Gary Gensler's SEC tenure ends as the courts deliver a decisive critique of his regulatory overreach. On November 21, 2024, Judge Reed O'Connor of the Northern District of Texas vacated the SEC's controversial Dealer Rule, a decision that reverberates across crypto and financial industries. On the same day, Gensler announced he would step down as SEC Chair effective January 2025. 🛡The Dealer Rule: A Step Too Far The SEC’s Dealer Rule attempted to redefine “dealer” under the Exchange Act, targeting digital asset markets and traders who provided liquidity. The rule’s broad language threatened to sweep DeFi participants—those using liquidity pools, decentralized exchanges, and smart contracts—into the same category as traditional market dealers. But Judge O'Connor’s ruling was a stark rebuke. The Court noted: 🧐The rule erased a century-old distinction between “traders” and “dealers,” violating the Exchange Act’s intent. The SEC overstepped its statutory authority, with Judge O’Connor emphasizing, “The Rule as it currently stands de facto removes the distinction between ‘trader’ and ‘dealer’ as they have commonly been defined for nearly 100 years.” The Impact on DeFi and Innovation DeFi protocols operate without traditional intermediaries, enabling peer-to-peer liquidity through open-source software and smart contracts. The SEC’s attempt to regulate such automated systems as “dealers” was seen as a direct assault on innovation. 😴A Reflection on Gensler’s Leadership Gary Gensler’s tenure at the SEC has been marked by aggressive enforcement, particularly targeting crypto markets. While his policies aimed to increase investor protections, many argue they stifled innovation and lacked clarity. 🫥👮The SEC’s repeated losses in courts—Ripple, Grayscale, and now the Dealer Rule—underscore the growing judicial pushback against regulatory overreach. Gensler’s resignation opens the door for a leadership shift, with potential candidates like Dan Gallagher and Paul Atkins signaling a more industry-friendly regulatory approach. 🧭What’s Next? This ruling is not just a legal victory; it’s a pivotal moment for how regulation adapts to innovation. With Gensler’s departure, the SEC faces a choice: continue on a path of contentious enforcement or work towards a balanced framework that supports both investor protections and technological growth. 🤞🗿For the blockchain industry, this is a reminder that vigilance and advocacy are essential. The Court’s decision reinforces the importance of adhering to legislative intent, especially as regulators grapple with the challenges of emerging technologies. 📢As one of the plaintiffs stated: "This is just the first domino. Innovation must prevail over overreach." #CryptoRegulation #DeFi #SEC #GaryGensler #Blockchain #Innovation

8

Landmark Gun-Jumping Fine in Israel: The Competition Commissioner has imposed a record NIS 111 million sanction for merger gun-jumping, emphasizing the risks of premature integration steps, including overreaching negative covenants that influence a target's operations during the interim period before merger approval. For more details, read our update on Barnea Jaffa Lande's website: https://lnkd.in/dAuPafUR #Antitrust #CompetitionLaw #MergerControl #GunJumping

23

Another wrinkle in the pesky problem of personal jurisdiction over foreign banks in the NY federal courts. We have already reviewed the difficulties of getting Chinese banks to enforce a judgment against counterfeiters due to rules of international comity, as Chinese law arguably does not allow Chinese banks to freeze assets to satisfy foreign judgments. Lebanese banks are insolvent, so depositors are unable to withdraw their money from outside Lebanon, meaning Lebanese in the US lost millions of dollars of deposits. The Second Circuit has held there is no long-arm jurisdiction over Lebanese banks where the transactions at issue did not have any touch-point with NYS, even though the Lebanese banks processed transactions through correspondent banks in NY.  Here, Lelchook v. Société Générale de Banque au Liban SAL, “involves 21 U.S. citizens and the family of a deceased U.S. citizen who were victims of rocket attacks by the Hizbollah terrorist organization in Israel in 2006. The plaintiffs allege that the Lebanese Canadian Bank (LCB) provided financial services to Hizbollah, including facilitating millions of dollars in wire transfers through a New York-based correspondent bank. In 2011, LCB and Société Générale de Banque au Liban SAL (SGBL), a private company incorporated in Lebanon, executed a purchase agreement where SGBL acquired all of LCB's assets and liabilities. In 2019, the plaintiffs brought similar claims against SGBL, as LCB's successor, in the Eastern District of New York for damages stemming from the 2006 attacks.”  The NY Court of Appeals held “where an entity acquires all of another entity's liabilities and assets, but does not merge...it inherits the acquired entity's status for purposes of specific personal jurisdiction. The court declined to answer the second question as unnecessary…allowing a successor to acquire all assets and liabilities, but escape jurisdiction in a forum where its predecessor would have been answerable for those liabilities, would allow those assets to be shielded from direct claims for those liabilities in that forum.” #NYS #longarm #personaljurisdiction #banks #counterfeiters #judgments #SecondCircuit https://lnkd.in/eM4saqFi

5

An increase in bank mergers has become desirable, especially in Europe. By scaling up, banks hope to increase their ability to compete with their U.S. and Chinese counterparts -- it will be interesting to see how this activity progresses. #Mergers #Bank #Europe https://lnkd.in/eqSWtZAN

13

1 Comment

The media’s coverage of the recent settlement between Abra and the U.S. Securities and Exchange Commission is yet another example of the importance of distinguishing between protocol staking and lending products. 👇 When the media lumps protocol staking and lending products together in the same discussion – without acknowledging and highlighting their extreme differences – they conflate the issue which further perpetuates the false narrative that protocol staking is the same thing as lending programs. One thing is clear… 🚫 Protocol Staking ≠ Lending. We need to be crystal clear about this distinction. 🔹 Understanding Abra Earn Abra Earn - the lending program at issue in SEC/Abra settlement, allowed U.S. investors to tender their crypto assets to Abra in exchange for Abra's promise to pay a variable interest rate. 🔑 Key point This is NOT protocol staking. It's a centralized lending program.  Despite this, the article likens Abra Earn to the staking program at issue in the Coinbase lawsuit and the Kraken Digital Asset Exchange Settlement. 🔹 Difference between the Coinbase Lawsuit The Abra Earn program bears no resemblance to the “staking as a service” product at issue in the Coinbase lawsuit. Coinbase’s “staking as a service” product was built around protocol staking while Abra’s Earn product didn’t involve protocol staking at all.  Instead, it was built on lending, borrowing, investing, and trading.   They are completely different products with distinct legal and regulatory considerations. 🔹 Kraken’s Settlement – Nuances Matter While Kraken settled with the SEC over their "staking program," there were significant differences between their product and true protocol staking.  To be sure, contrary to what the article states, Kraken did not have to halt all “on-chain” staking.  They still offer protocol staking through Staked.   🔴 Bottom Line Protocol staking is not a lending product. Protocol staking is not an investment contract. Protocol staking is not a security. Accurate facts matter. Accurate description of product offerings matter. Understanding the nuances matter.  As an industry, we must be vigilant in our use of language and clear in our explanations. Conflating different crypto products and services only serves to confuse regulators and the public, potentially leading to misguided regulations. True protocol staking is a fundamental part of Proof-of-Stake blockchain networks, serving a crucial role in network security and consensus. It's imperative that we don't allow it to be lumped in with lending or "earn" programs. Let's continue to educate, advocate for clarity, and push for appropriate regulations that understand the nuances of our rapidly evolving industry. Thoughts? Let's discuss. 👇 #ProtocolStaking #SECCrypto #CryptoRegulation Full article here 🔗 https://lnkd.in/g_GmY6CJ

28

3 Comments

Cleary is representing an ad hoc group of existing bondholders of Azul in an agreement to provide up to $500 million of new funding and to implement a comprehensive restructuring with all stakeholders. https://ow.ly/vQc350UaXbv #DebtFinance #Restructuring

3

We recently had a Fireside Chat with Dan Mulhall, an Advisor to DLA Piper and former Irish Ambassador to the US, UK, Germany and Malaysia, and Richard Sterneberg, Head of Global Government Relations at DLA Piper. Moderated by Senator Richard Burr, Principal Policy Advisor to DLA Piper, the discussion focused on the European political and regulatory landscape in 2024 and potential implications for cross-border business. This year is significant for the continent as the European Union Commission and Council secure new leadership. Please follow the link below to watch the recording. #GlobalTrends #CrossBorderBusiness #Regulatory #GovernmentRelations #Europe

16