Wired GC

law from the inside out

Venezuela: the Return of Expropriation

There is news that the government of Hugo Chavez in Venezuela has taken control of the French-owned Exito chain of supermarkets, allegedly for price gouging after a currency devaluation. The Commerce minister, Eduaro Saman, gave a terse explanation that should have in-house counsel looking closely at their facilities maps through risk-colored glasses:

“Starting today, this company becomes a socialist company,” Saman said while surrounded by Exito employees who support the expropriation.

Some more background from the WSJ is available here; not all the store’s workers are cheering the new owners.

There’s a good overview on expropriation from the OECD; I also found a short paper entitled “Expropriation, Nationalisation and Risk Management” by Scot Anderson of the Davis Graham and Stubbs law firm.

Many years ago while still in private practice, I worked on a small part of the insurance coverage dispute related to expropriation of offshore oil facilities in South America. It would have made a good bar exam question; it was definitely a great piece of work for the law firms involved.

In the meantime, there’s a new face on international business development:

chavez-parrot.jpg

London Calling

The Financial Times offers a summary of a McKinsey report that London is eclipsing New York as the world’s major financial center.

The change may have occurred already, not least because US markets are beset by credit woes, according to research by McKinsey Global Institute, a think-tank affiliated to the consultancy.

“We think the differential growth rates are so significant that it is quite likely Europe has overtaken the US,” said Diana Farrell, author of the report.

As go markets, so go clients. And as go clients, so go law firms.

I commented on this last year, but thought it was more regulation-driven then.

Wall Street? Where's that?

Flight Capitol

The attraction of an NYSE listing may be under increasing pressure, according ($sub req’d) to the Financial Times.

Concerns about litigation are cited in a new survey that points to a rise in the international nature of capital markets. London and Hong Kong are cited as growing at the expense of the NYSE:

Nearly 60 per cent of respondents to the survey of attorneys specialising in initial public offerings said the risk of securities litigation, coupled with the cost of developing infrastructure for a public company and meeting accounting standards, discouraged companies from going public in the US, according to Gavin Anderson, the US financial communications company. Richard Truesdell, of Davis Polk and Wardwell, said that, while US exchanges continued to capture a strong share of international offerings, their position was at risk.

“Overseas markets have developed attractive regulatory frameworks and they are getting better at marketing and providing liquidity to support IPOs,” he said.

The Gavin Anderson firm interviewed attorneys from 20 US firms representing issuers on almost $11 billion of US IPOs last year.

While it is true that law firms can benefit from the work created by increased regulation (like Sarbanes-Oxley), this survey shows that long-term it may be more of a mixed blessing if more securities work is headed offshore.

The NYSE, of course, is not sitting still, the parent company is now called NYSE Euronext.

Wired GC — Unplugged Show #7

The Wired GC -- Unplugged

“Publishing With Principle”

The printed word has come a long way since Gutenberg. The reach of “traditional” and “new” media is now worldwide and immediate. With these new technologies come new responsibilities. Some publishing companies and even individual bloggers have run afoul of laws in several jurisdictions.

In today’s audiocast, we talk to Charles J. Glasser Jr., media counsel with Bloomberg News and author and editor of the “International Libel and Privacy Handbook.” Its subtitle notes that it is intended as a “Global Reference for Journalists, Publishers, Webmasters, and Lawyers.”

Mr. Glasser also provides for listeners a glimpse into the life of a counsel to a leading media company and gives key insights into how to make compliance with law a reality in a business that really never closes its doors.

Today’s show is here (just click on the “mp3″ link):

mp3 (15:03 min; 3.4 mb)

Show Notes:

— Mr. Glasser’s book is available on the Bloomberg website, which contains biographical information as well.

— This book is also available on Amazon here.