MBV Lawyers Eli Gould and Micah Jacobs Recognized As Northern California Super Lawyers
SAN FRANCISCO, July 29, 2010 — MBV LLP congratulates lawyers Eli Gould and Micah Jacobs, who have been recognized as 2010 Northern California Super Lawyers in the annual list of the top 5% of lawyers in Northern California. Super Lawyers identifies this select group based upon a peer review process and the publication’s own independent research.
Eli Gould provides a full range of legal services on employment and labor issues confronting employers and managers including advice and counsel on all aspects of the employment relationship, preventative training on legal pitfalls confronting employers in California, advice and drafting expertise on employee compensation plans, advice on wage and hour and employee classification issues, counsel on reductions-in-force, assistance on employment issues related to mergers and acquisitions, and other corporate transactions, representation in union-management negotiations and relationships, and representation in all aspects of employment-related litigation. Before joining MBV Law, Eli was the senior employment attorney for the Silicon Valley office of Bingham McCutchen where he represented many emerging technology clients on all aspects of employment and equity compensation, as well as a number of larger, more established companies, including Stanford University, Sun Microsystems, Veritas Software and Applied Biosystems. Eli continues to represent small, medium and large multi-national employers at MBV Law. Eli was also named as a 2009 Northern California Super Lawyer.
Micah Jacobs specializes in litigating complex business and intellectual property disputes. He has 16 years experience representing leading technology and internet-related companies and the cutting edge legal issues they confront, and has worked at some of the country’s leading law firms including Wilson, Sonsini, Goodrich & Rosati, Cooley Godward Kronish and Bingham McCutchen, before joining MBV. An accomplished trial lawyer, Micah has won many unanimous jury verdicts and helped clients resolve critical legal problems. In 2009, Micah was recognized by the Daily Journal as one of the 75 Leading IP Litigators in California in its annual survey of the top lawyers in California, and he was also recognized as a Super Lawyer in 2005 and 2006. His expertise includes international and cross-border litigation and resolving complex business disputes, patent, copyright and trademark infringement claims, trade secret disputes, unfair competition and false advertising claims.
The 2010 Northern California Super Lawyers are featured in the August issue of San Francisco Magazine.
MBV Law LLP provides strategic legal advice and transactional services to new ventures, middle market companies, selected public companies, and professional services firms. MBV also represents a diverse client base in complex commercial litigation matters throughout the State of California. The firm is comprised of senior attorneys with broad legal and business experience who provide high quality, personalized legal services to every MBV client. For more information on MBV Law, please visit www.mbvlaw.com.
MBV Law Wins Preliminary Injunction in High Stakes False Advertising Case on Behalf of Software Company Maximum Availability
SAN FRANCISCO, Calif., (June 4, 2010) – A United States District Court in the Central District of California issued a mandatory preliminary injunction on behalf of software maker Maximum Availability against its primary competitor, Vision Solutions, Inc., which dominates the market for high availability disaster recovery software. Maximum Availability, a New Zealand-based software company, sought the injunction to stop Vision from disseminating allegedly false comparative marketing materials. Federal Judge George Wu found that Vision’s marketing materials contained literally false statements about Plaintiff, including the false claim that Maximum Availability lacked 24/7 global customer support and that over 80 customers of Maximum Availability had switched over to Vision. The court’s order prohibited Vision from further use of those marketing materials in competition with Maximum Availability and also ordered Vision to send a notice to its sales staff, its third party resellers and anyone else who received the advertisements informing them to cease their use of such false comparative marketing materials.
The case is scheduled for trial on March 1, 2011.
Maximum Availability’s chief executive Allan Campbell says the false claims were “very harmful and left us with no option but to take measures to set the record straight. This is a significant victory for our business. We are a fast-growing player in this market and have been unfairly impeded by the unlawful tactics of the market leader who tried to keep us down”.
Maximum Availability is represented by Micah Jacobs, a member of MBV Law in San Francisco, who said: “Federal courts don’t typically issue mandatory injunctions. This was a clear and decisive order based on evidence that Vision was distributing false comparative marketing materials, which harms both competition and consumers. This was an important step by the court to level the playing field and a hard-fought victory for Maximum Availability to continue growing its market share.”
MBV Law LLP provides strategic legal advice and transactional services to new ventures, middle market companies, selected public companies, and professional services firms. MBV also represents a diverse client base in complex commercial litigation matters throughout the State of California. The firm is comprised primarily of senior attorneys with broad legal and business experience who provide high quality, personalized legal services to every MBV client. For more information on MBV Law, please visit www.mbvlaw.com.
U.S. Department of Labor Releases Final Regulations on Executive Order 13496
The U.S. Department of Labor has released final regulations on Executive Order 13496, which requires all prime contractors and subcontractors providing certain services to the federal government to post a notice to employees working on the government contract of their right to form, join or assist a labor union, and to engage in action in concert with their co-workers with respect to their working terms and conditions. The posting requirement applies to all applicable government contracts entered into or modified after June 19, 2010. Contact Eli Gould to find out more about the requirements under the new regulations.
U.S. Department of Labor Issues Administrative Interpretation Clarifying Definition of “Son and Daughter” under Federal Family Medical Leave Act
On June 22, 2010, the U.S, Department of Labor issued an administrative interpretation clarifying the definition of “son and daughter” under the federal Family Medical Leave Act, which allows for leaves from work up to twelve weeks for certain reasons, including the birth or adoption of a son or daughter or the illness of the child. The clarification issued by the DOL means that anyone who has assumed day-to-day responsibilities to care for a child is entitled to FMLA leave to the same extent as a biological parent, regardless of the individual’s biological, legal or financial relationship to the child. This effectively expands the circumstances under which an employee can take FMLA well beyond those allowed under the California Family Rights Act, which applies to domestic partners, but only if they have registered as such with the state. Contact Eli Gould or Bob Pia with MBV Law LLP if you have questions about the effect of this new interpretation by the DOL.
Delaware Supreme Court Finally Declares: Officers Have Same Fiduciary Duties as Directors
For decades, corporations and their attorneys have had clear guidance about the duties and liabilities of directors. The statutes and courts have uniformly declared that directors are subject to the fiduciary duties of care-described by Delaware courts as the duty of directors to “inform themselves, prior to making a business decision, of all material information reasonably available to them” and to “act with requisite care in the discharge of their duties”-and of loyalty-which under Delaware law essentially requires that “the best interest of the corporation and its shareholders takes precedence over any interest possessed by a director . . . and not shared by the shareholders generally.” But oddly enough, the Delaware Supreme Court, which makes the ultimate pronouncements regarding Delaware law, clearly the most important body of corporate law in the country, had never flatly declared whether those duties were equally applicable to corporate officers, although it seemed to assume as much in some of its prior rulings. In the recent case of Gantler v. Stephens, 965 A.2d 695 (Del. 2009), however, the Delaware Supreme Court squarely held that officers of Delaware corporations owe precisely the same fiduciary duties of care and loyalty that directors owe. Id. at 708-709. Unfortunately for officers of many Delaware companies, the available statutory protections against personal liability are not as extensive as they are for directors, and many companies do not extend to officers the contractual indemnification protection they routinely offer to directors. In light of Gantler, corporations and their officers may wish to review carefully their charter and contractual provisions relating to officer and director liability, to determine if additional protections are warranted.
In Gantler, the company engaged a financial adviser to assist in locating attractive purchase offers for the business. The financial adviser presented three offers it considered to be acceptable, and also noted that accepting the offers would be superior to retaining the company’s own shares. Nonetheless, the CEO and board chair allegedly neglected to provide due diligence materials to the first potential buyer (which had indicated its intent to replace the incumbent board), and failed to inform the board fully of that fact. He presented the second proposal to the board, but the board majority (including him) voted to reject the offer without discussion. He then outlined as an alternative to acquisition a recapitalization of the company, reclassifying the interests of certain shareholders. Eventually, the Board and a majority of the shareholders approved the plan, after disclosure of the officers’ and directors’ conflict of interest in implementing the plan and preserving their positions, rather than selling the company.
Certain shareholders filed suit alleging breach of fiduciary duty of loyalty relating to the board’s rejection of the merger offer, approval of the reclassification, and the making of false and misleading statements in the proxy materials. The suit essentially asserted that the officers and directors were attempting to preserve their existing positions at the expense of the opportunity to maximize shareholder value via a sale.
The Court, in addressing the disloyalty claim against the defendant officers, explicitly held for the first time that corporate officers owe the same duties of care and loyalty as corporate directors. The Court cited the failure to respond to due diligence requests as a shared responsibility of the CEO and the Treasurer. The Court went so far as to observe that because the Treasurer was interested in maintaining the CEO’s continued goodwill to retain his job and the associated benefits, it could be reasonably inferred that he was motivated to assist the CEO to “sabotage” the due diligence process, thereby breaching his duty of loyalty. Id. at 709. The implications for officers are clear-if their job security could be affected by a matter (whether or not the matter relates directly to their employment status or compensation), they must consider themselves to have a personal interest in the matter, putting them at risk of breaching their duty of loyalty if they appear to have acted to preserve their position rather than to maximize shareholder value. The court’s language carries the ominous implication that if a senior officer has a personal interest in a matter that gives rise to a potential breach of the duty of loyalty, then all subordinate officers automatically have a personal interest in the matter (i.e., not offending their senior officer) that will justify heightened scrutiny of their conduct, even if they have no other discernible interest in the matter.
This exact parity of fiduciary duties for officers and directors does not on principle appear unwarranted, but there are several differences that create unique challenges for officers. First, a director acts at board meetings, within a fairly well-defined process involving the review and vote upon matters put before the board. An officer’s responsibilities are much more free-ranging, and the duties of loyalty and care can be invoked in all sorts of decisions, actions, and processes without any obvious moment, like the vote of the board for directors, when they are put in sharp focus for consideration. This can make it more difficult for officers to appreciate when they are at risk of breach of a duty, and to understand precisely what action to take to fulfill it. Furthermore, under Delaware law, a corporation may adopt a provision in its certificate of incorporation exculpating its directors from monetary liability for breach of their fiduciary duty of care (not, however, for breaches of the duty of loyalty). There currently is no statutory provision authorizing comparable exculpation of corporate officers. Also, it is unsettled among the states whether officers are protected in their decision-making by the “business judgment rule,” which protects directors with a “presumption that in making a business decision the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interest of the company.” Aronson v. Lewis, 473 A.2d 805, 812 (Del. 1984). Finally, officers are not always given the same protection as directors under the Company’s protective documents. For example, in our experience, venture-backed companies frequently have indemnification agreements protecting directors, which are introduced at the insistence of venture capital firms whose employees are serving as directors. Those agreements do not commonly cover corporate officers, but in light of Gantler, the officers may be able to argue more convincingly that they should.
Consequently, officers, who should already feel less secure than directors that their actions will not be subject to claims of breach of duty, should also be concerned that the Gantler decision may inspire more plaintiffs to assert breach of fiduciary duty claims against them. Officers should therefore review indemnification provisions in their employers’ charter documents, indemnification agreements and directors and officers liability insurance policies, to make sure they understand their level of protection, and consider expanding it.
Bay Area Food & Beverage Investor Fair
June 30, 2010
3:00 pm - 7:00 pm
Rock Wall Wine Co., Alameda, CA
The Bay Area is the birthplace of many innovative food and beverage companies leading the nation to higher quality food, more sensitivity to environmental impact, and a greater emphasis on local food. Join MBV Law for an informative afternoon to introduce some exciting local companies, sample their artisan products, and learn about investment opportunities. Among the many private companies we represent, an increasing number are food and beverage companies, many of whom look to us help them raise equity capital as a means to expand and grow. MBV has partnered with some of our clients to organize an investor event.
Food and beverage companies will be displaying their wares and making 10-minute presentations to an audience of accredited investors. Food and beverage companies not currently seeking capital but interested in building a network with potential investors and other companies are also invited to participate by reserving a table. The event is very affordable for presenting companies, to insure a robust gathering of promising companies and interested investors. Tables are $50 and presentation slots are $100 (including a table).
For additional information, please contact Cynthia Maxey at Cynthia@mbvlaw.com or (415) 651-1467.
11th Annual AFSF Awards Breakfast
May 27, 2010
7:30 am – 9:30 am
The City Club, San Francisco, CA
MBV Law is proud to be a table sponsor at this annual awards event honoring outstanding teachers and principals, students, architects and designers working in the classroom, firms and community organizations, all working on design education projects in the San Francisco Bay area. Carlos Garcia, SFUSD Superintendent of Schools, will serve as Master of Ceremonies.
The Architectural Foundation of San Francisco (AFSF) is a non-profit educational organization that involves San Francisco elementary and secondary public school students through a mentored appreciation of architecture, engineering, construction and the design process. For additional information, please click here.
East Bay Series - Real-life Stories of Entrepreneurial Success: Lethal Mistakes Startups Need to Avoid
April 21, 2010
6:00 pm - 8:00 pm
Crow Canyon Country Club, Danville, CA
Why do some startups succeed while others fail? Professional investors have seen it all - they know what really matters and what doesn’t. How crucial to success is hiring right? Cash management? Go-to-market strategy? Technical barriers? Spending too little or too much? Market research? Partnerships? The right investors? The right financing terms? VCs and angels will explain how you can turn others’ mistakes into your competitive advantages. To register click here.
The panel:
Prashant Shah, Hummer Winblad
Allen Peterson, Keiretsu Forum Northern California
Eileen Tanghal, Applied Ventures
Ronald H. Star, Howard Rice
Moderator: Greg Beattie, MBV Law
MBV attorneys have completed the following transactions:
- $15 million Series C Preferred Stock Offering for TxVia, Inc., a Delaware corporation based in New York (July 2009)
- $2 million Series A Preferred Stock Offering for Public Bikes, Inc., a California corporation (April 2009)
MBV attorneys have presented at the following conferences and meetings:
- ACEC California State Conference (Topic: Mergers and Acquisitions, Bill Mandel, Spring 2009)
- Bay Area Financial Officers Group (Topic: Mergers and Acquisitions, Bill Mandel, Spring 2009)
MBV attorneys have participated in the following events:
- Mackrell International Meeting in Athens, Greece (Laura T. Howard, Summer 2009)
MBV attorneys have recently been appointed to the following Boards of Advisors or Directors:
- Bank of San Francisco Advisory Board (Bill Mandel and Don Buder)
