A venture capital fund is a form of investment in which third party investors, such as investment banks and individuals, pool their money in order to invest in projects. Such projects are often high-risk projects and the business promoting the project may be unable to…
A recent Wall Street scandal has brought the term Ponzi scheme into the news again. Named after Charles Ponzi, a Ponzi scheme is a fraudulent investment scheme promising high rates of return with minimal risk. Typically, it generates returns by acquiring new investors whose investments…
A Greenshoe Option is an option available to the underwriter of an initial public offering, (“IPO”) to issue more shares if the IPO is oversubscribed. It is named after the Green Shoe Company which was the first to issue such an option.
A noisy withdrawal is the public withdrawal of legal representation in which the lawyer, having knowledge of the client’s existing or potential improprieties, such as a serious breach of securities law, disavows work done for the client and notifies the proper authorities of his/her withdrawal.
In many leases there is a clause known as a Mother Hubbard clause which states that any property adjacent to property described on the lease is automatically included in the lease. In Oil and Gas leases the Mother Hubbard clause usually found in the Granting…
A poison pill is a takeover defense used by publicly-traded companies to discourage unwelcome acquisitions by making the stock less attractive to the acquirer. There are a number of ways to achieve this, but two popular poison pills are: A flip-in which allows existing shareholders…
Consideration is a fundamental concept of contract law in common law jurisdictions. Indeed, it is usually required to make a contract enforceable. In this context, consideration is a bargained-for exchange of benefits that is sufficient to make a promise legally binding. Simply put, consideration is…
A shark repellent, also known as a porcupine provision, is a strategy used by corporations to fend off unwanted or hostile takeover attempts. Examples shark repellent: Fair Price Provision Requires a bidder to pay the same price to all shareholders. This raises the stakes and…