In the Aftermath of the World
Trade Center Attacks... As a center of commerce, the World Trade Center housed corporate headquarters,
financial firms and law offices. 14,000
Lawyers Displaced by Attacks. Representing businesses,
financial companies and corporate law departments, the lawyers
constitute 10% of the lawyers in New York City, and nearly 20%
of the lawyers in New York State. Listed here,
the law firms' dead and missing.
Brought home, the need for backups
for data, communication. But
the attacks on the WTC and Pentagon had repercussions
far beyond New York and Washington, DC. Federal
Agencies housed in the WTC were hard hit, and the Securities
and Exchange Commission lost
documents on pending cases, which may not be replaceable.
Some businesses, after the 1993 attach on the WTC, prepared by
instituting "hot"
backups - instant, off-site backups of critical data. These
backup systems enabled them to conduct business after this attack
with little interruption. As for communication, conventional
telephones
failed and cell phones were overwhelmed, but internet email,
wireless email, satellite phones, and 2-way radios kept working.
"War Clause" May Terminate
Mergers, Affect Insurance Coverage; Bankruptcy Filings Expected
to Rise; Lloyd's of London Faces Substantial Claims, Uncertain
Future. Merger contracts typically
contain a "war
clause" which permits the merger to be terminated in
the event of an attack. Mergers and acquisitions lawyers are
reviewing pending merger contracts to see if such clauses could
or should be invoked. So far, insurers of the World Trade Center
businesses and agencies have not invoked the "war clause"
of their policies which might permit them to deny coverage. The
construction
of the "war clause" in insurance policies would
depend on whether the perpetrators could be considered a "military
force," or whether the attacks were the act of a "government
or sovereign power." Lloyd's
of London is facing claims not only as a result of the the
attacks on the WTC towers, but also from the airlines whose planes
were hijacked, and faces an uncertain future. Even if insurers
do not invoke the war clauses, bankruptcy
filings are expected to rise.
Expect New Federal Laws On Surveillance,
Wiretaps, and Encryption. For
a thorough analysis
of how the attacks might affect Federal law, see the article
by David Carney, author of the Tech Law Journal at LLRX.com.
Trademark Owners Do Not Automatically
Get Domain Names.
The owner of a trademark is not automatically entitled to a domain
name incorporating the trade mark, a Philadelphia Federal Judge
has ruled. In a lawsuit between Strick Corp., a tractor-trailer
manufacturer, and James Strickland, an independent computer consultant
using the "strick.com" domain name, the Judge found
it unlikely that surfers looking for the Strick Corporation would
be likely to be confused. Strick
Corp vs. James B. Strickland, U.S.D.C., E.D. Pa.; case not
found online.
ICANN: Use of "Dot-Org"
Will Not be Limited to Non-Profits.
Laying to rest the fears of many holders of domain names ending
in ".org" that they might be forced to give up their
domain names, the Internet Corporation for Assigned Names and
Numbers (ICANN) has reversed its earlier position that ".org"
domain names would likely be used for non-profit corporations
only.
Acceleration of Interest
Rate on Promissory Note Upon Debtor's Default "Without Notice
or Demand" Requires Notice to Debtor. Although the promissory notes evidencing
the debts between Plaintiff bank and Defendant debtors cited
that upon default, the interest rate would be accelerated "without
notice or demand," Plaintiff was required to take some affirmative
action to put debtor on notice that the interest rate had been
accelerated, and to advise the amount of the accelerated interest
rate. Failure to do so invalidates the acceleration. Beal
Bank vs. Crystal Properties, Ltd., L.P.,
No 99-56038, U.S. Ct. App., 9th Cir., (September 25, 2001)
No Attorneys' Fee Award in
Derivative Suit Unless Benefit to Corporation; Award of $580K
Reversed.
Saying that it was not enough to show that the settlement of
a shareholders' derivative suit against CBS Corporation had cleared
the way for a $67 million class action settlement against the
corporation, the Third Circuit Court of Appeals has vacated an
award of attorneys' fees in the derivative suit. Instead, the
Court ruled, the lawyers representing the shareholders in the
derivative action would be entitled to fees only if they could
show that CBS "is better off because of the institution
and settlement of the derivative litigation than it would have
been if the litigation had not been brought in the first place."
Zucker
v. Westinghouse Electric Corp., No. 00-3783, U.S. Ct. App.,
3rd Cir. (September 10, 2001).
Limited Partner Refused Right
to Vote Stops Merger. In a case of first impression under
Delaware law, a Pennsylvania Common Pleas Court has ruled that
the merger and forced buyout sought to be imposed by the majority
shareholder upon the limited partners denied them their right
to vote, and violated the two-thirds supermajority requirement
required by the partnership agreement. The argument of the majority
shareholder that it did not have to comply with the two-thirds
majority vote requirement, since, as majority shareholder, it
could simply amend the partnership agreement to change that requirement,
fell on deaf ears. If such action could be taken, the court reasoned,
it would defeat the purpose of the percentage provisions in the
agreement, and would render those safeguards "utterly illusory."
Wurtzel
vs. Park Towne Place Apartments, L.P.; case not found online.
As reported by law.com.
Online Deal Rooms - Your
Secure Website for Drafting Documents, Making Deals?
Following the lead of investment and commercial banks, more law
firms are turning to online services that provide a
secure website for negotiating deals, drafting documents,
and conducting private "conversations." The article
contains a review of the current providers.