TGIF: May 19, 2017 – On the Constitutional Oddity of a “Special Counsel”

Despite what you may have heard, lawyers are, in fact, human beings with interests and hobbies all their own. They are not, I repeat not, robots sent from the future solely for the purpose of billing hours, drafting documents, and negotiating terms.  Not all of them anyway.  

In TGIF, I touch on some of my own interests primarily through the lens of the “Rules of the Game”, focusing on the rules and incentives that affect many aspects of our daily lives. I may even crack a joke or two. Hard to say.

TGIF will be published regularly on (surprisingly enough) Friday mornings. For more information, check out www.hoeglaw.com or drop Rick a line at rhoeg@hoeglaw.com.

***

On Wednesday May 17th, acting Attorney General Rod Rosenstein (in place of recused Attorney General Jeff Sessions) appointed former Department of Justice official and FBI Director Robert S. Mueller III to serve as “Special Counsel” to oversee an investigation of “Russian government efforts to influence the 2016 presidential election and related matters”.

(Mr. Mueller’s title of “Special Counsel” not to be confused, of course, with the executive branch’s permanent and not at all independent, “Office of Special Counsel“.  Because naming conventions in Washington have never been anything if not entirely and completely clear.)

Given the nature of the investigation as a response to cries of a “constitutional crisis” in the wake of the President’s firing of former FBI Director James Comey, what you may not know is how tumultuous a Constitutional history the concept of a “special counsel” or “independent prosecutor” has had in its own right.

Can an executive branch official like an Attorney General appoint an individual that cannot be fired by his or her own boss?  If not (or if there is some doubt), can congress empower the Attorney General to do so?  If so, what does that mean for the separation of powers?  And what if that congressional authority should expire?

Many of these questions have been asked and answered multiple times (and in multiple ways) throughout our nation’s history, but never in a fashion which one could deem “definitive”.  Such is the nature of an inherently political but simultaneously “independent” position, one supposes.

Let’s take a deeper look.

Continue reading “TGIF: May 19, 2017 – On the Constitutional Oddity of a “Special Counsel””

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Financing Term Sheet Deep Dive: Participation Rights

Whether you’ve only recently decided to seek out capital for your business or you’ve already received (or made) your first offer, the term sheet (or “letter of intent”) is an integral part of the process.  

In this series we’ll look to shed some light on the legal language contained in that term sheet by taking a “deep dive” into the most often used terms and how choices made in selecting those terms can affect both Company and Investor.  Check out an overview here.

Financing Term Sheet Deep Dive will be published each Monday morning until conclusion. For more information, check out www.hoeglaw.com or drop Rick a line at rhoeg@hoeglaw.com.

***

As we get closer to the end of our “Financing Term Sheet Deep Dive” Series (only a few weeks left!) the rights and responsibilities at issue are generally less contentious.  That doesn’t mean that they aren’t important, or that they don’t affect the Company and its Investors.  It does mean, however, that the contours of the rights are a bit more “expected”; that there is, perhaps, a bit less to negotiate.

Today we discuss one of those “less contentious” rights: the right to “participate” in future equity sales of the Company.

Let’s take a closer look.

Continue reading “Financing Term Sheet Deep Dive: Participation Rights”

TGIF: May 12, 2017 – Mortality and Analytical Release in the Sublime “What Remains of Edith Finch?”

Despite what you may have heard, lawyers are, in fact, human beings with interests and hobbies all their own. They are not, I repeat not, robots sent from the future solely for the purpose of billing hours, drafting documents, and negotiating terms.  Not all of them anyway.  

In TGIF, I touch on some of my own interests primarily through the lens of the “Rules of the Game”, focusing on the rules and incentives that affect many aspects of our daily lives. I may even crack a joke or two. Hard to say.

TGIF will be published regularly on (surprisingly enough) Friday mornings. For more information, check out www.hoeglaw.com or drop Rick a line at rhoeg@hoeglaw.com.

***

Believe it or not, “TGIF” did not start its life solely devoted to reviewing every dotted ‘i’ and crossed ‘t’ in the multinational airlines’ bag of tricks.  No, my intent with the series was to show that lawyers have interests both varied and wide…which of course means that I enjoy reviewing statutes, regulations, and contract terms of my own volition.  Of course.  Perhaps I doth protest too much.

But today, I turn to thoughts on one of my other loves, the oft-ridiculed “video game”. Though the term “game” seems too dismissive for the interactive experience I’d like to discuss today: Giant Sparrow’s What Remains of Edith Finch (Edith Finch from here on out).

But first, a story.

Continue reading “TGIF: May 12, 2017 – Mortality and Analytical Release in the Sublime “What Remains of Edith Finch?””

Start-Up Entrepreneur Series: Preferred Stock

In the Start-Up Entrepreneur Series, I will be taking a deeper look into some of the most common questions early stage founders face in putting together and operating their new businesses.  

The Start-Up Entrepreneur Series will be published each Wednesday morning until conclusion. For more information, check out www.hoeglaw.com or drop Rick a line at rhoeg@hoeglaw.com.

***
Unless your new start-up is fully capitalized by its Founders, one of the first questions a new company must ask itself is “How are we going to fund this thing?”.

Last week we discussed the most common preliminary funding mechanism: “convertible debt“.  Today, we’ll talk a bit about the primary form in which institutions invest in start-ups: “preferred stock”.

Continue reading “Start-Up Entrepreneur Series: Preferred Stock”

Financing Term Sheet Deep Dive: Registration Rights

Whether you’ve only recently decided to seek out capital for your business or you’ve already received (or made) your first offer, the term sheet (or “letter of intent”) is an integral part of the process.  

In this series we’ll look to shed some light on the legal language contained in that term sheet by taking a “deep dive” into the most often used terms and how choices made in selecting those terms can affect both Company and Investor.  Check out an overview here.

Financing Term Sheet Deep Dive will be published each Monday morning until conclusion. For more information, check out www.hoeglaw.com or drop Rick a line at rhoeg@hoeglaw.com.

***

Last week when discussing redemption rights, I equated them to a sword hanging over the Company’s head.  That’s because the right of an Investor to redeem his or her investment is not usually actionable.  The Company simply isn’t likely to have the funds to pay back.  The key to the term is the “leverage” given to the Investors, not the right itself.

Today we discuss another Investor “leverage” term:  Registration Rights.

Continue reading “Financing Term Sheet Deep Dive: Registration Rights”

TGIF: May 5, 2017 – The “Delta” Between Service and (Wind) Schear

Despite what you may have heard, lawyers are, in fact, human beings with interests and hobbies all their own. They are not, I repeat not, robots sent from the future solely for the purpose of billing hours, drafting documents, and negotiating terms.  Not all of them anyway.  

In TGIF, I touch on some of my own interests primarily through the lens of the “Rules of the Game”, focusing on the rules and incentives that affect many aspects of our daily lives. I may even crack a joke or two. Hard to say.

TGIF will be published regularly on (surprisingly enough) Friday mornings. For more information, check out www.hoeglaw.com or drop Rick a line at rhoeg@hoeglaw.com.

***

In the spirit of my last TGIF post, “On Being United“, comes the stirring sequel.

Flight 2222

Editor’s Note: Like most cases tried in the media and not in a court of law, there is a fair amount of dispute regarding the facts on the ground here.  In looking at the issues, I will attempt to keep an even view of the factual possibilities, but keep in mind that stories regularly change as each side gets its say.  The bulk of the facts presented here come from the investigative story posted at heavy.com here.

On April 23, 2017, Brian Schear, his wife, and his 2-year-old son, Grayson, boarded Flight 2222 from Maui to Los Angeles.  The family sat in three separate seats for which they had purchased tickets.

Sometime after boarding, the family was approached by Delta personnel requesting to have young Grayson removed from his seat.  The Delta attendants informed Mr. Schear that they were empowered to make this request because the seat in question was reserved under the name Mason Schear, the family’s 18-year-old son.

Mr. Schear explained to the Delta crew that he had paid for Mason to return to Los Angeles on an earlier flight expressly for the purpose of using the family’s third seat on young Grayson.

He taped the resulting confrontation.

Continue reading “TGIF: May 5, 2017 – The “Delta” Between Service and (Wind) Schear”

Start-Up Entrepreneur Series: Convertible Debt

In the Start-Up Entrepreneur Series, I will be taking a deeper look into some of the most common questions early stage founders face in putting together and operating their new businesses.  

The Start-Up Entrepreneur Series will be published each Wednesday morning until conclusion. For more information, check out www.hoeglaw.com or drop Rick a line at rhoeg@hoeglaw.com.

***
Unless your new start-up is fully capitalized by its Founders, one of the first questions a new company must ask itself is “How are we going to fund this thing?”.

Over the next few weeks, we’ll be looking into different funding avenues available to the start-up entrepreneur, as well as at the various types of investors from which a company might pursue those funds.  And for more in-depth analysis of preferred equity financings in particular, be sure to check out our Financing Term Sheet Deep Dive Series.

Today, we’ll talk a bit about one of the most prevalent forms of early fundraising: “convertible debt”.

Continue reading “Start-Up Entrepreneur Series: Convertible Debt”