May 25, 2016 nº 1,747 - Vol. 13
"We are not interested in the possibilities of defeat. They do not exist."
Queen Victoria
Read Migalhas LatinoAmérica in Spanish every Tuesday and Thursday. Visit the website at www.migalhas.com/latinoamerica
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Delaware effort to protect shareholders may end up hurting them
An overhaul in shareholder rights is coming as Delaware seeks to curtail a strategy that has grown popular with hedge funds. The question is whether shareholders or companies will benefit. Right now, shareholders of a company that is the target of a corporate takeover can protest the price being paid by petitioning a court to appraise the value of their shares. The court will order the merged company to pay the shareholders fair value, which may be greater or less than the amount paid in the deal, plus any interest that accumulated during the court’s deliberation, which often takes years. Appraisal rights originally came to be as a compromise. Mergers used to require the approval of 100 percent of shareholders. That gave power to shareholders who wanted to block deals by being holdouts. Appraisal rights were adopted to reduce the minimum deal approval threshold to a majority. That way, a shareholder could dissent from the takeover but not stop it. The ability to exercise appraisal rights has always been convoluted and difficult, however. In Delaware, appraisal rights are usually available only if the deal price is paid in cash, not stock. This means there are ways to avoid setting off appraisal rights. Exercising appraisal rights can also be risky for shareholders. If the court found that the acquirer had overpaid, the shareholder seeking the appraisal would receive less than other shareholders got in the deal. And lengthy court proceedings required costly experts to opine on the fairness of the price. Because of these issues, shareholders seldom exercise appraisal rights.
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Huawei sues Samsung over patents
Huawei is suing its tech rival Samsung over claims that its patents have been infringed. The Chinese firm said it was pursuing its South Korean rival in two courts - one in California, the other in Shenzhen. According to Huawei, several of its cellular communications and software inventions had been used in Samsung's phones without its permission. Samsung said it would defend its business interests. The specific patents involved have not been disclosed.
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Indemnización
Ecuador terminará de pagará en junio a la petrolera estadounidense Occidental su deuda de US$ 980 mlls., producto de la indemnización ganada en proceso arbitral mayo de 2006. El litigio fue seguido por la multinacional tras que el gobierno ecuatoriano rescindiera un contrato de exploración de crudo.
Acuerdo
El presidente de México, Enrique Peña Nieto, y la representante de la Unión Europea para asuntos exteriores y seguridad, Federica Mogherini, acordaron actualizar el acuerdo global entre ambas partes vigente desde el 2000. La primera ronda de negociaciones se celebrará a más tardar en junio. En 2015, el comercio bilateral entre México y la Unión Europea superó los US$ 62,000 mlls.
Inversiones
La petrolera Axion Energy, controlada por el grupo argentino Bridas y por la china CNOOC Ltd., invertirá unos US$ 1.500 mlls. para ampliar una refinería que posee en el país. El proyecto recibirá un aporte deUS$ 378 mlls. de la Corporación Financiera Internacional (IFC), y va a generar en la etapa de construcción cerca 1.600 puestos de trabajo.
Toyota and Volkswagen step up investments in tech start-ups
Carmakers Toyota and Volkswagen have struck separate partnerships with rideshare companies Uber and Gett. The Japanese company will invest an unspecified amount in Uber and offer new leasing options for its drivers. Toyota said the two companies would share also knowledge and speed up their research efforts in areas such as driverless cars. Volkswagen announced an investment in Gett, an Israel-based rideshare operator. Toyota said that as patterns of car usage continued to change, it wanted the collaboration to be about more than simply providing vehicles but to also collaborate on technology such as in-car apps. Gett chief executive Shahar Waiser also stressed that the partnership with VW would involve technology and innovation. VW said: "The ride-hailing market represents the greatest market potential in on-demand mobility, while creating the technological platform for developing tomorrow's mobility business models."
E.U. Ministers agree to extend another lifeline to Greece
Eurozone finance ministers have agreed to extend further bailout loans to Greece as well as debt relief, in what they call a "major breakthrough". After late-night talks in Brussels, the ministers agreed to unlock 10.3bn euros ($11.5bn) in new loans. The move came two days after the Greek parliament approved another round of spending cuts and tax increases demanded by international creditors. The ministers also said debt relief would be eventually offered to Greece. This had been a key demand from the International Monetary Fund (IMF), which says public debt is unsustainable at current levels of about 180% of Greece's gross domestic product.
Cuba legalizes small and medium private businesses
Cuba's government has announced that it is legalising small and medium-sized private businesses. It is the latest stage of reforms begun when President Raul Castro took over from his brother, Fidel in 2008. Raul Castro has been trying to stimulate Cuba's stagnant economy but has faced resistance from Cuban Communist Party hardliners. With the restoration of relations with the US last year, Cuba is also opening up to foreign investment. The government currently allows self-employment in several hundred job categories from restaurant owners to hairdressers. It is not clear if businesses would be given additional rights such as the ability to import supplies or export products.
Federal appeals court rules Bank of America not liable for fraud
The US Court of Appeals for the Second Circuit on Monday overturned a 2013 jury verdict that found Bank of America liable for fraud and imposed a penalty of more than $1.2 billion. The Second Circuit determined that there was not enough evidence provided to establish that the Countrywide Financial unit of Bank of America committed mail and wire fraud during the years leading up to the financial crisis. Countrywide was not the only company selling questionable mortgages to Fannie Mae and Freddie Mac at the time, but the verdict against Bank of America was held out as the first time banks were held liable for mortgage fraud in events leading to the crisis. However, the Second Circuit stated that there must be proof of fraudulent intent in the setup of the contracts.
UK top court: expats cannot vote in EU referendum
The UK Supreme Court on Tuesday upheld lower court rulings that determined citizens who have lived outside of the UK for more than 15 years will not be allowed to vote in the June 23 EU referendum. The statute, the EU Referendum Act 2015 was challenged by two citizens that have been living abroad for decades. Harry Shindler, a 94-year-old World War II veteran, and Jacquelyn MacLennan, a 54-year-old lawyer, argued that the statute infringed on their common law right to free movement. The court, however, refused permission to appeal the lower court decisions. Lady Hale, Deputy President of the Supreme Court, recognized the deep "concerns" these citizens have over this issue, but she also stated that the court could not find a sufficient legal basis for the challenge. More than two million British expatriates will be affected by this decision.
IMF backs Hollande’s labor market reform as 'big step forward'
The International Monetary Fund backed President Francois Hollande’s effort to modernize French labor laws even as unions resisted changes by blocking the nation’s oil refineries. The law, named after Labor Minister Myriam El Khomri, eases restrictions on firing, replaces industry wide salary deals with company-level negotiations and reduces overtime pay. Hollande has used emergency measures to force it through parliament in the face of resistance from his own Socialist lawmakers. “We think the El Khomri law is a big step forward,” Christian Mumssen, the IMF’s mission chief for France, said on Tuesday at a press conference in Paris. “It will help with hiring, it will help with competitiveness.” The IMF raised its forecast for France’s 2016 growth to “close to” 1.5 percent from 1.1 percent in mid-April, citing stronger-than-expected consumer spending and investment. Even so, the Washington-based fund said France has much further to go on improving its economic performance. Unemployment remains stuck above 10 percent, roughly double the level in the UK and Germany.
Swiss open criminal proceedings against BSI over malaysia fund allegations
The prosecution follows charges that the lender laundered money for “politically exposed” individuals linked to 1MDB, the scandal-plagued Malaysian state investment fund.
US banks face crackdown on overseas trades that dodge law
The top US derivatives regulator is cracking down on Wall Street banks’ ability to evade Dodd-Frank Act restrictions by moving some of their swaps trades overseas. The Commodity Futures Trading Commission in a 2-to-1 vote gave final approval to a rule that broadens the circumstances in which banks’ foreign units must adhere to US collateral requirements, according to a statement released Tuesday. The CFTC took action after some of Wall Street’s biggest swaps dealers had stopped guaranteeing some trades booked overseas, meaning they didn’t have to fully comply with Dodd-Frank.
New French law condemns checking work email on the weekends
The recently enacted El Khomri labor law in France has at least one upside: "The Adaptation of Work Rights to the Digital Era," which ostensibly aims to get people to stop checking their work email on the weekends. The development of information and communication technologies, if badly managed or regulated, can have an impact on the health of workers,” Article 25 states. “Among them, the burden of work and the informational overburden, the blurring of the borders between private life and professional life, are risks associated with the usage of digital technology.” The law suggests that companies — following the lead of Volkswagen, which turns off its servers after-hours, and Daimler, which allows employees to automatically delete emails they receive while on vacation — negotiate formal policies to limit the encroachment of work into people’s homes (or bingo halls, or salsa clubs, or wherever it is they find themselves when they’re away from the office).
Google’s French headquarters raided by tax investigators
Dozens of tax investigators raided Google’s French headquarters, part of a continuing probe into alleged tax evasion by the Internet giant, prosecutors said.
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