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Let's talk antitrust: Discussing recent cases and emerging competition issues
Recent cases and judgments have shone a light on some emerging themes and trends that companies will want to consider as part of their risk management framework.
United States | Publication | October 2022
The corporate opportunity doctrine precludes fiduciaries from “divert[ing] and exploit[ing] for their own benefit any opportunity that should be deemed an asset of the corporation.” O’Mahony v. Whiston, No. 652621/2014, 2019 WL 4899030, at *6 (N.Y. Co. Oct. 4, 2019) (citing Alexander & Alexander of N.Y., Inc. v. Fritzen, 147 A.D.2d 241, 246 (1st Dep’t 1989)).
The doctrine is premised on the notion that a corporate officer or director may not personally profit at the expense of the corporation. See Troffa v. Troffa, No. 6095102016, 2022 WL 3140457, at *6 (Suffolk Co. Aug. 2, 2022). When a fiduciary usurps or diverts a corporate opportunity, “he may be held accountable for the fruits of his wrongdoing.” Sheiffer v. Petry Holding, No. 601792/2004, 2005 WL 6578258 (N.Y. Co. 2005).
New York courts generally use two non-exclusive tests to determine whether the opportunity at issue was a corporate opportunity: (1) the tangible expectancy test and (2) the line of business test. While these tests help assess what constitutes a “corporate opportunity,” some courts take a more general approach assessing all relevant factors.
Read the full New York Law Journal article, "Usurpation of corporate opportunities."
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Recent cases and judgments have shone a light on some emerging themes and trends that companies will want to consider as part of their risk management framework.
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After a lacklustre finish to 2022 when compared to the vintage year for M&A that was 2021, dealmakers expected 2023 to see the market continue to cool in most sectors, in response to the economic headwinds of rising inflation (with its corresponding impact on financing costs), declining market valuations, tightening regulatory scrutiny and increasing geopolitical tensions.
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On 18 September 2023, the CMA published its Initial Report (Initial Report) on AI Foundation Models (FM), supplemented in April 2024 with the publication of its “Update Paper” focused on potential antitrust risks associated with FMs and a “Technical Update Report” providing more detail on the development on FMs (collectively the “Reports”). Below, we consider these CMA publications.
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