LAWS6997 CROSS BORDER DEALS
CROSS BORDER DEALS
LAWS6997
CROSS BORDER DEALS
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This document contains unit of study specific information. It must be read in
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Lecturer name and contact details
Title/Name Ronald Barusch
Email [email protected]
Preferred method of communication
The best way to reach me is by email ([email protected]). I would be happy to arrange a
mutually convenient time to meet or have a telephone or Zoom conference with you if you email
me to request such a meeting. I will be physically present at the Law School from 16 March
through 4 April (Please use my Gmail email address as I do not regularly check any University
email.)
With regards to correspondence with academic staff, students should remember to provide their
student identification number, especially when sending emails. N.B. Email communication
should be via your Sydney University email account.
Please note: as per our University policy, the official channel of communication is your official
university email, not the Canvas inbox.
Although Canvas includes a messaging function via this Inbox feature, we strongly recommend
that all communication with teachers and peers remains through your university email and
inbox." (Student Canvas Guide, Navigation, Inbox).
Important notes on the reading:
1. There is a substantial amount of assigned reading to be completed prior to the
first lecture on 24 March. In addition, there will be a lot of reading throughout this
course and some of it you may find heavy going. The reason for this is that we will cover
a large portion of what would be covered in a traditional U.S. Securities Regulation class
and a U.S. M&A class, PLUS we will go into depth on many practical issues arising on
cross-border transactions as well as looking at how some of these issues are treated in
other jurisdictions. This will manifest itself particularly in the reading to be completed
prior to our first class on Friday, 24 March. I urge you not to wait until the last minute
before the class to read this material. It consists, among other things, of hundreds of
pages from the Textbook, which is quite dense and will likely have concepts which are
new to you. Although there is lots of reading for the other classes as well, once you
conquer this mountain, I think you will find the remaining reading more manageable.
Because of the nature and length of the reading for the first class, please obtain the
Textbook as soon as you reasonably can. See below on ordering the Textbook from the
publisher or amazon.com.au. It appears that the ebook from the publisher is
substantially cheaper and the publisher has advised me that by using the LAW10 promo
code will get you 10% off.
2. In my view, it is critically important to complete the reading assignments before the
applicable lecture. Not only will I assume that the material has been read, but, given the
nature of the topics and the concepts addressed, you will get a lot more out of my
lectures and our discussions if you are well prepared. Also, there is material in the
reading that may not be discussed in class unless you ask about it.
3. Some good news: The “Problems” in the Textbook, even if included in pages assigned,
are NOT assigned unless specifically referenced in a note on Canvas or emailed to you.
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4. Some common sense needs to be applied in doing the reading in the Textbook and
assigned rules. Remember that the basic objective of this course is to help you identify
and understand cross-border issues, be creative in their solution, understand why a
foreign lawyer’s perspective may be different than yours, and at times be able to push
back on a U.S. lawyer who says that a particular issue always must be handled a certain
way. It is not to have you memorize all of the finer points of detailed regulations. Many
of the readings go into the detailed requirements because I want you to be able to
understand those concepts as well as being able to identify and discuss issues, but not
necessarily to memorize them.
5. I recommend you NOT automatically print the entire contents of all of the various
links provided below (and on Canvas). Some sample disclosure and other documents
are included which are quite long but only a small portion (or none - the document only
being included for reference) of which may be assigned for reading. Note also that I
have included links to a number of Delaware cases and other material under “Other
Useful Materials” below which might be helpful to refer to (or could be a place to dive
deeper once you have mastered the required reading) but are not assigned. Some of
the readings which are assigned are only small portions of the document which is linked
so be sure to look at the assignment to be sure you are only reading what is assigned
(unless you want to read more).
There is a separate memorandum (available on Canvas) on, among other things, the
assessments, including the final written assignment, the online discussion forums and
participation. Please carefully review it and watch Canvas for updates.
Reading materials
Required reading
Required textbook
All students should purchase the following book:
Coffee, Sale and Whitehead, Securities Regulation: Cases and Materials, Fourteenth Edition
(Foundation Press 2021) (ISBN 978-1647087753)) (the “Textbook”) (but see below on a
possibly cheaper way to purchase it).
Obtaining the book
The textbook is available at the publisher’s website in ebook form (which is cheaper than the
print version) and the print version is available at amazon.com.au. (Note that you want to
purchase the 14th edition.) The publisher has advised me that by using the LAW10 promo
code will get you 10% off if you purchase the ebook version on the publisher’s website. There
is a significant amount of reading in them which should be completed prior to the first lecture
on 24 March. Please be sure to allow sufficient time to allow for timely delivery to prepare for
class, particularly if you order the print version.
Because of the magnitude of the assigned reading, you are strongly urged to buy the Textbook.
However, I have been advised that a copy of the print version of the Textbook will be available
on short loan at the Law Library.
In past years I have recommended the purchase of the accompanying rules pamphlet that have
certain U.S. Federal statutes and Securities and Exchange Commission regulations. However,
that was largely to have a ready reference in class. I think a printed copy of the rules pamphlet
is less necessary since all of the laws and regulations we will read are online and there are
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links in the assignments below to them. If you do want to purchase the rules pamphlet you can
find it here.
In the M&A portion of the class we will be referring to certain sections of the Delaware General
Corporation Law (the “DGCL”). An online version of the DGCL can be found at
http://delcode.delaware.gov/title8/c001/ . Links to specific sections are included with the
assigned reading below.
For certain non-U.S. cross-border comparative information, it may be convenient to refer to this
web site: https://iclg.com/practice-areas/mergers-and-acquisitions-laws-and-regulations.
From time to time some information on the jurisdictions available on that site may be assigned.
Any readings on this web site will be from material available in front of the pay wall. There is
no need to purchase the print version of this book.
The remainder of the reading is available via the links indicated below. If you find difficulties
clicking through any assigned reading, please email me as soon as you discover it. You should
expect further material or links to be posted from time to time on the Canvas site.
Other required reading
Links to other required reading and page numbers of the Textbook which are assigned are
included below.
Lecture schedule and reading list
Reading Assignments1
Please watch Canvas for possible modifications and
additions to these readings, including reading
assignments for guest lectures.
I. 24 March Class
A. INTRODUCTORY MATERIAL:
1. A Few Examples
a. What happens when Section 5 of the Securities Act of 1933
is violated? (Much more on Section 5 below –it is largely the
basis for the first half of the course.):
1 The order of discussion (and therefore readings) is subject to change. In addition, the reading
assignments are likely to be updated from time to time both because of developments and discussions
in class. Changes will be announced in class and/or on Canvas. The bolded items are of particular
significance and merit a more careful review.
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i. Barclays to Book $591 Million Loss Due to
Debt-Sale Snafu
ii. Debt-Sale Debacle at Barclays Was Bigger
Than First Thought
iii. Matt Levine, “Oops” (pp1-5 of the PDF)
iv. The Impact: Barclays Agrees to a $361 Million
Settlement to Resolve SEC Charges Relating
to Over-Issuances of Securities
b. Dealpolitik--David Jones Deal Highlights Power of
Shareholders in Australia
c. Dealpolitik--Could U.S. Law Have Averted David Jones
Pain? (a different David Jones incident)
d. Dealpolitik--Who Needs “Truth in Takeovers”? Not the U.S.
e. Dealpolitik--Alibaba’s Structure v. Dual Class — the Bottom
Line
f. Dealpolitik: Will the War at Viacom Threaten the Super-
Voting Stock?
g. Dealpolitik--James Hardie Case Highlights Better Treatment
of U.S. Directors
h. Davidoff, The Hurdles Ahead for a Cooper Tire Deal
i. China Culture Crash
ii. Optional: 8 years later…Cooper Tire and
Goodyear Merger Announcement (2021/2/22)
i. Davidoff, “Tasting the Difference in a Cross-Border Deal,”
j. Moneybeat-The Perils of Trans-Atlantic Mergers
k. Dealpolitik: Mylan to Investors: We’ll Do What We Want
l. Dealpolitik: Did Mylan Stockholders Know Enough When
They Approved Its Inversion?
m. Dealpolitik: Delaware Ruling May Complicate Management
Buyouts
n. Activism 101: Read Corporate Bylaws — Dealpolitik
o. Expecting a Sweet Deal for Hershey? You May be
Disappointed — Dealpolitik
a. Optional: Mondelez abandons pursuit of U.S. chocolate
maker Hershey (2016-8-29)
p. The Year of the SPAC (2021-1-26)
a. SPAC Boom Ends in Frenzy of Liquidation - WSJ (2022-
12-25)
b. AFR 2/15/21 First Aussie-focused SPAC hunts the ‘next
Atlassian’
i. APAC-focused SPAC Catcha Investment 2.0
withdraws $250 million IPO
2. U.S. Federal vs. State Regulation of Some Fundamental M&A Issues
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a. Santa Fe Industries v. Green, Textbook pp. 1037-1043
c. Weinberger v. UOP (Parts II(B), II(C), II(D) and III only)
d. Kahn v. M&F Worldwide Corp. case note
e. Dealpolitik: CBS Directors Play a Subtle Game in Viacom
Battle
f. Sections 251(a)-(c), (h), 253(a), 259(a) and 262 (a)-(b)of the
Delaware General Corporation Law (the “DGCL”),
g. Rule 10b-5 under the Securities Exchange Act of 1934, as
amended (the “1934 Act”)
h. CTS v. Dynamics Corp. of America (and subsequent note),
Textbook 880-891
3. Delaware Supreme Court Says ‘Quasi-California Corporation’
Statute, Violates U.S. Constitution”
4. Davidoff, “In Corporate Disclosure, a Murky Definition of Material”
5. Dealpolitik: Don’t Count Out Delaware
6. Some Unusual Aspects of U.S. Litigation
a. Seventh Amendment to the U.S. Constitution
b. Dealpolitik: Is a Whopping Legal Fee a Marketing Pitch by a
Delaware Court?
c. Dealpolitik: More Evidence of Broken Shareholder Litigation
System
d. Optional: In re Walgreen Co. Stockholder Litigation (Judge
Posner’s August 2016 opinion on a disclosure-only settlement
labelling it a racket)
e. In re Trulia, Inc. case note
7. Wachtell, Lipton, Takeover Law and Practice (2022), pp. 8-10
(Shareholder Litigation) and pp. 10-19 (Shareholder Activism and
Engagement)
8. Basic Inc. v. Levinson, Textbook pp.1061-1068 (note particularly
the materiality standard of TSC Industries, Inc. v. Northway, Inc.
(discussed on p. 1063) and footnote 17)
9. Note on Materiality, Textbook pp. 1177-1182
10. Baker McKenzie, In the Know: 144A vs Reg S only--
Considerations in high-yield offerings
11. Introduction to U.S. Securities Laws Applicable to Offerings
a. Sections 2(a)(3), 2(a)(10), 2 (a)(11), 4(a)(1), 4(a)(2), 5,
11, 12 and 17(a) of the Securities Act of 1933, as
amended (the ‘1933 Act”)2
2 Securities lawyers almost always cite the 1933 Act, the 1934 Act and other U.S. securities laws
by the section numbers in the original statutes (adopted almost 90 years ago). Indeed, the SEC rule
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b. Textbook pp. 523-593
c. Optional: Textbook pp. 50-583, 67-924
12. For reference, but not assigned: Complete U.S Constitution
B. Offerings of Securities in the U.S.:
1. Textbook pp. 93-151 (Basic U.S. structure of securities offerings and
the JOBS Act)
2. Groupon gun-jumping issue
a. Davidoff, “In a Quiet Period, Groupon Feels the Noise”
b. Groupon SEC Comment Response 9-2-2011 (Comment #4)
c. Groupon SEC Comment Response 9-16-2011 (pp1-9)
3. Textbook pp.177-189 (after reading this jump ahead to read this article:
SEC Scrutiny Blocks Some Crypto Firms From Going Public), 208-216,
2022 Update on MD&A from Textbook Authors (2022-8-8), 220-225,
258-269, Optional: 153-174 (Registration Process)
4. Textbook pp. 326-332 (Sale of Business Doctrine)
5. Textbook pp. 373-399 (Private Placements)
a. Optional (for a bit of a chuckle on the concept of “accreditor
investor” and private placements (though a serious view by much
of the practicing bar)): Levine, “Certificate of Dumb Investment”
(the second section in this link, pp 5-7 of the PDF) (2023-2-7)
6. Textbook pp. 405-436 (Regulation D); Optional: Textbook pp.501-507
(Crowdfunding), pp. 436-444 (Regulation A+)
7. Preliminary Note (Rule 500) to Regulation D, Rules 501, 502(a), (b)(1),
(c), and (d), 506, 507 and 508 of Regulation D under the 1933
numbers for rules adopted under the 1934 Act and certain other statutes use those references (e.g.
Rule 10b-5). However, U.S. statutes have been compiled into a series of titles of what has been named
the “United States Code” with entirely different section numbers. Therefore, when you click on the links
of statutory references assigned here, you are directed to the U.S.C. and sections 2, 4, 5, 11, 12 and 17
of the 1933 Act become 15 USC Sections 77b, 77d, 77e, 77k, 77l, and 77q, respectively. Remember
we will be referring to these provisions as sections of the original statute (and that is what the assigned
section numbers refer to (even though they link to the applicable section number in the U.S.C.)). The
words of the statutory sections are the same.
3 In connection with U.S. Federal securities regulation, our focus will be on portions of the 1933
Act and the 1934 Act and related rules. It is helpful to have the overview of the regulatory system
provided by this brief passage, but in general it is not necessary to retain in depth knowledge of other
statutes.
4 As you read the description of the U.S. underwriting process (and all of the material for this
course), you should be asking yourself how this process differs with that in Australia (or your home
country) and whether there could there be regulatory or practical issues arising from these differences.
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8. Form D5 under the 1933 Act,
9. Textbook pp. 600- (Rule 144A and Regulation S)
10. Rule 144A under the 1933 Act
11. Regulation S under the 1933 Act
12. Optional: Textbook pp. 745-758 (Reg M, free riding, spinning)
13. Textbook pp. 919-970, 976-1037, 1112-1122, 1139 (from last
paragraph)-1143 (Civil Liabilities, including Escott v. BarChris,
WorldCom, Basic v. Levinson (assigned above), Ernst & Ernst v.
Hochfelder, the Due Diligence Defense, Gustafson v. Alloyd and The
Fraud on the Market Theory)
a. Optional: Halliburton v Erica P. John Fund, Textbook pp.1128-
1140
14. Will Cryptocurrency be regulated as securities?
a. SEC Chairman Gary Gensler speech on regulating
cryptocurrency as securities (2022-9-8)
b. Inside a Crypto Nemesis’ Campaign to Rein In the Industry
(2021-11-21)
c. Latest SEC Lawsuit Shows Crypto’s Troubles Might Not Be
Contained To FTX (2022-12-22)
d. How Crypto’s Meltdown Changed the Regulatory Debate (2023-
1-8)
e. SEC Sues Crypto Firms Genesis and Gemini Over Lending
Product (2023-1-12)
f. SEC Scrutiny Blocks Some Crypto Firms From Going Public
(2023-1-24)
g. Wachtell: SEC Halts Cryptoasset “Staking-As-A-Service”
Program Amidst Tightening Regulatory Enforcement
Environment (2023-2-13)
h. Levine, Central Crypto (2023-2-13) (pp. 1-8 of the PDF)
i. Optional: Contrary Position: Why Cryptoassets Are Not
Securities (2022-12-6)
II. 25 March Class: Issues Arising in Cross-Border Financings
1. Review: “The Liability Provisions of the Securities Act and Exchange Act,”
Wachtell, Lipton, Cross-Border M&A Guide (pp.71-81 only)
5 This form is assigned just familiarize yourself with the nature of the information required (and
why people might not want to file it). The instructions to the form are not assigned.
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2. Rio Tinto Registered Debt Offering Prospectus—only the following pages: In
the supplement: pp. S-1 (cover of supplement) through S-4, S-8 through S-14
(Risk Factors), S-25 through S-28. Base Prospectus: Cover, pp. 1, 46-48
3. Australian Law Exhibit 5 opinion for a debt offering
4. US Law Exhibit 5 opinion for a debt offering
5. Sample US 10b-5 letter
6. Australian Tax opinion
7. Note that the Rio Tinto underwriting agreement can be found here. It does not
need to be read for detail, but should be reviewed to understand the structure of
a U.S. underwriting.
8. Brambles 144A Offering Memorandum—only the following pages: Cover, i-v, 22-
33, 150-162
9. PLI, “Big Boy Letter
10. AS (Auditing Standard) 6101 issued by the Public Company Accounting
Oversight Board (PCAOB) : Letters for Underwriters and Certain Other
Requesting Parties (also known as Cold Comfort Letters)--only the following:
Example A, Example F
11. Valemus Limited Wrap for a Rule 144A offering—only cover of wrap to p.29 of
wrap
12. U.S. Law firm's due diligence training memo
13. Tips for Drafting Rule 144A or Reg S Indenture
14. Morrison v. NAB and its aftermath, Textbook pp. 1475-1503
15. SEC to Permit All Issuers to Submit Confidential Draft Registration Statements
16. Eurobond Offerings-- Excerpts from Fuller, Law and Practice of International
Capital Markets, 2012 (pp. 231-268)
17. Dealpolitik: Honeywell Pushes Envelope on Deal Disclosure
18. The Growth of Collective Shareholder Actions in Europe
19. Optional: Capital Markets:UK
20. Optional: EU Prospectus Directive
21. Optional: Slaughter and May, Brexit and the Capital Markets – does equivalence
need to be mutual?