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COVER STORY

‘Zombie’ reckoning: goodnight to the walking debt?

With central banks raising interest rates in a bid to cool off their economies, time may be running out for zombie companies, with many believing a prolonged stretch of bankruptcies is a likely scenario in the months ahead.

FEATURES

Organic growth vs M&A

There is no right answer to the question of organic growth versus M&A; both strategies will have wide-ranging and long-lasting consequences for businesses.

Subsidy control: a new regime for the UK

While the new subsidy control regime’s move away from an overly-prescriptive and onerous approval process toward a more flexible approach has been broadly welcomed, it is not without reservation.

Environmentally conscious: avoiding corporate greenwashing

Given the burgeoning interest in sustainability, it is easy to see why companies might wish to engage in greenwashing. But the financial and reputational risks of doing so can be extreme.

Within these walls: tackling insider crime

Whatever the profile or motivation of a malicious actor, insider fraud is typically enabled by either a lack or failure of appropriate controls. Worryingly, the majority of businesses feel vulnerable to insider threats.

Enhanced partnership: OFSI and OFAC in sanctions team up

With the growing scale of sanctions making compliance much more difficult, the OFSI-OFAC enhanced partnership is particularly good news for multinational companies that must navigate multiple and sometimes competing sanctions regimes.

ROUNDTABLE

Transfer pricing

Amid an increasingly complex and stringent regulatory environment, spearheaded by the Organisation for Economic Co-operation and Development’s base erosion and profit shifting project, it is essential that MNEs regularly review and update their transfer pricing processes to ensure compliance with global TP laws and to minimise the risk of disputes with tax authorities. FW moderates a discussion between J. Clark Armitage at Caplin & Drysdale Attorneys, Abhijay Bhatia at Convatec Group PLC, Norman Wingen at the European Bank for Reconstruction & Development (EBRD), Jeffrey Lash at Euclid Transactional, Emma Donnelly at FTI Consulting, Martin Lagarden at Henkel AG & Co. KGaA, Sebastine Odimma at MAERSK Transport and Logistics, and Marco Orlandi at Shell International B.V.

SPECIAL REPORT

Corporate fraud & corruption

Q&A: Offshore AML regulation and enforcement

The imposition by CIMA of fines under its administrative fines regimes demonstrates CIMA’s willingness to pursue enforcement actions and impose sanctions where FSPs fail in their AML/CFT compliance. FW discusses offshore AML regulation and enforcement with Miriam Smyth at Appleby.

International executives facing a US internal investigation: what to consider

Lankler Siffert & Wohl LLP Corporations and their US counsel often find themselves conducting investigations beyond US borders. It is thus increasingly likely that international executives will experience a US-style corporate investigation at some point.

Chats, texts and other messages: US authorities expand expectations on data collection of business-Related communications

King & Spalding LLP The authorities now believe that the most probative evidence is likely to be found not only in emails but in chat messages as well. And they have begun to change enforcement policies to incentivise employers to access and produce chat messages as a top priority.

New protections and financial incentives for whistleblowers in the US

Skadden, Arps, Slate, Meagher & Flom LLP Financial institutions and other companies covered by AML and sanctions laws should evaluate their existing internal whistleblower programmes to ensure that they comply with the new law and encourage internal whistleblowing by employees.

The FCPA’s statutory defences and considerations for corporate compliance

Steptoe & Johnson LLP Counsel and compliance personnel responsible for advising employees need to have a solid understanding of FCPA exceptions and defences to provide timely and practical advice in real-life situations.

Money laundering regulations and enforcement in the UK

PCB Byrne LLP There is an obvious tension between the relevant authorities’ civil powers to fine for UK Money Laundering Regulations breaches and in some instances their parallel power to criminally prosecute for the same conduct.

Economic crimes and supply chain diligence: a ‘how to’ compliance guide

Osler, Hoskin & Harcourt LLP Having an effective plan, a ‘tone at the top’ of compliance, effective policies and procedures, and ongoing monitoring is critical to mitigating the risks associated with often complex supply chains.

Corruption prevention: monitor and address human behaviours

Intelligent Sanctuary Ltd. Corruption prevention is not just about having the right policies in place, but more about how they live within an organisation on a day to day basis. The underlying issue is having robust systems in place that monitor and address human behaviours.

Are privacy laws compatible with corporate transparency?

Covington & Burling LLP The EU and the UK will need to consider the extent to which privacy rights and laws should impact upon measures designed to combat money laundering and terrorist financing and to promote corporate transparency more generally.

Application of civil remedies to cryptocurrency

Bennett Jones LLP The world of cryptocurrency and digital assets is new and growing at a rapid rate, presenting novel legal issues to the courts and investors alike.

Q&A: Cryptocurrency and financial crime

Governance, controls, compliance technology and employee competence at all levels are key to mitigating financial crime risk. FW discusses cryptocurrency and financial crime with Hakob Stepanyan at BDO.

TALKINGpoint

CFIUS: executive order and evolving national security

These new rules fortify what CFIUS has already been doing – that is, focusing on enhancing US supply chain resilience and preserving US technological leadership, while seeking to safeguard sensitive data, resources and infrastructure. FW discusses CFIUS’ executive order and evolving national security in the US with Maura K. Rezendes at Allen & Overy LLP.

Private equity: rethinking value creation in 2023

A unifying value creation roadmap sets many of the best PE firms apart from the rest. Careful review of the options and the competitive landscape is essential to translating assets into a real return. FW discusses rethinking private equity value creation in 2023 with Corey Smith, Merrill Strobel Bohren, Kevin Cowherd, Dave Owen and Ankur Sheth at Ankura Consulting Group, LLC.

The impact of DAC7 and DAC8

The positive impacts of DAC7 and DAC8 are that the newly introduced reporting requirements will be more aligned between digital economy income and more traditional income. FW discusses the impact of DAC7 and DAC8 with Romain Tiffon at ATOZ Tax Advisers.

DEALfront

mergers & acquisitions

Shell agrees $2bn Nature Energy deal

Shell has agreed to acquire Danish biogas producer Nature Energy Biogas A/S from Davidson Kempner Capital Management, Pioneer Point Partners and Sampension, a group known as the NGF Partnership, in a deal worth nearly $2bn.

Corteva to buy Stoller Group for $1.2bn

In its second biologicals transaction over the past 12 months, US agricultural chemical and seed company Corteva, Inc. is to acquire independent biologicals firm Stoller Group, Inc. in a deal valued at $1.2bn.

private equity & venture capital

Blackstone and Emerson Electric agree $14bn deal

To help it power the next phase of growth for climate technologies, global technology and software company Emerson is to sell a majority stake in its Climate Technologies business to private equity funds managed by Blackstone Inc. in a transaction valued at $14bn.

PE firms to take UserTesting private in $1.3bn deal

Private equity firms Thoma Bravo and Sunstone Partners have agreed to acquire customer feedback platform UserTesting in a deal worth $1.3bn.

bankruptcy & corporate restructuring

BlockFi files for Chapter 11 protection

Cryptocurrency lending platform BlockFi Inc. and eight of its affiliates have filed for Chapter 11 in the US Bankruptcy Court for the District of New Jersey.

Next buys Joules out of administration in £34m deal

In a rescue deal that takes the beleaguered British lifestyle brand Joules out of administration, UK multinational clothing, footwear and home products retailer Next Plc has acquired the majority of Joules’ assets via a newly formed company for a total cash consideration of £34m.

SPOTlight

Building momentum: the positive outlook for a US outbound investment review regime

Gibson Dunn The exact parameters of an outbound investment programme remain to be seen, though there are numerous ways such a programme can potentially come into existence.

Board responsibility for cyber security risk: guidance for navigating an evolving legal and regulatory environment

Milbank LLP Boards are coming into the crosshairs and facing stockholder derivative claims in the US for the alleged breach of directors’ cyber security oversight duties.

Disclosing inside information

Corker Binning Disclosing inside information in circumstances other than in the proper performance of an employment, profession or office is a criminal offence in the UK by virtue of the Criminal Justice Act 1993. It is also a civil offence under the Market Abuse Regulation.

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CONTRIBUTORS

Allen & Overy LLP

Ankura Consulting Group, LLC

Appleby

ATOZ Tax Advisers

BDO

Bennett Jones LLP

Caplin & Drysdale Attorneys

Convatec Group PLC

Corker Binning

Covington & Burling LLP

Euclid Transactional

European Bank for Reconstruction & Development (EBRD)

FTI Consulting

Gibson Dunn

Henkel AG & Co. KGaA

Intelligent Sanctuary Ltd.

King & Spalding LLP

Lankler Siffert & Wohl LLP

MAERSK Transport and Logistics

Milbank LLP

Osler, Hoskin & Harcourt LLP

PCB Byrne LLP

Shell International B.V.

Skadden, Arps, Slate, Meagher & Flom LLP

Steptoe & Johnson LLP