Aubergines Spring 2013
NEW HS&F FACES
HARK! A NEW PARTNER IS BORN: RACHEL ROSATI WARNER
SHOCKER: HS&F’s LEGENDARY GLASS CEILING SHATTERED
After a lengthy and deeply contemplative process not unlike that which the Vatican’s College of Cardinals just completed, our partners have voted unanimously to admit a new partner. We are proud to announce her: Rachel Rosati Warner.
If there ever were a lawyer who had more lawyerly blood in her veins, we can’t imagine who it could be. Rachel is one of three siblings, all females, and all lawyers. Her two uncles are lawyers. And so is her dad, Mario, a partner in our cross-town friendly rival, Wilson Sonsini Goodrich & Rosati LLP.
Rachel comes to us with 12 years of experience in the Silicon Valley office of the global law firm giant, DLA Piper LLP, where she focused on real estate and financial transactions.
Rachel did her undergraduate study at the University of California – Los Angeles, where she majored in history and graduated with honors. She obtained her law degree at the Santa Clara University School of Law.
Rachel represents developers, property owners, tenants, landlords, investors, lenders and other businesses in transactional and commercial real estate matters. She has broad experience in acquisitions, sales, leasing, subleasing, development, entity formation, construction, and commercial debt financing transactions, both lender and borrower side.
Born and raised in Silicon Valley, Rachel has strong relationships with other Silicon Valley natives, and over the years has forged lasting relationships with newer members of the Silicon Valley community.
Rachel is an enthusiast of family gatherings, traveling, scuba diving, cooking, UCLA basketball, Greek mythology and outdoor activities. She and her husband Steve (also a Bruin) have two children, Helena and Ben.
Rachel serves on the Board of Directors of Rebuilding Together Peninsula, a non-profit organization providing free home renovation for low income homeowners in Silicon Valley.
INSTAGRAM’S “CALL ME MAYBE” MOMENT
WAS THAT A TWEET, A TERM SHEET OR AN OFFER?
“Call Me Maybe”, Carly Rae Jepson’s No.1 block-buster debut pop hit released in 2012, conveys her conflicted and ambivalent longings for a guy she hardly knows. It’s a flirt, but her move is hedged.
Instagram, the wildly successful two-year-old photo-sharing startup that Facebook bought in 2012 for $715 million with a combination of cash and Facebook stock, continues to make headlines, some of them also involving ambiguous flirtation.
And then there was the matter of a buy-out term sheet that Twitter, no slouch in the social networking universe, apparently gave to Instagram’s CEO-Founder, Kevin Systrom. This was a term sheet which either was – or wasn’t – actually given to Systrom, apparently depending on the meaning of “given”.
Prior to committing to Facebook, Systrom reportedly attended a meeting with a senior Twitter executive, and was handed a buy-out term sheet. Systrom apparently looked at the term sheet, but declined to keep a copy of it, and merely slid it back across the table to the Twitter guy. Nothing was apparently signed.
Speculation has been all over the map about what terms were in Twitter’s term sheet, including whether it might have called for a larger total purchase price than what Facebook ultimately paid.
Subsequently, Systrom reportedly testified in a California Department of Corporations “fairness hearing” that he had received no other offers to buy Instagram before accepting the Facebook deal. (The purpose of a fairness hearing is to determine that fairness is being done to shareholders when they are about to be bought out.)
So, the gossipy crowd has continued to ask about this odd “Call Me Maybe” moment, when a term sheet from a big player with sweet terms was pushed from one side of the table to the other, and then pushed back again. Did an offer actually occur? All-cash? A higher price? And does this quirky version of corporate air hockey even constitute an offer, or was it all just a big Hollywood-like air-kiss? Stay tuned. The Department of Corporations may investigate this further. And others may want to know, too.
We don’t have enough information to form an opinion as to whether any unfairness or impropriety occurred in the Twitter-Instagram encounter. And even if we did, we wouldn’t speculate about it.
But what we will do is take this opportunity to remind our readers that when they are considering, as board members or major shareholders, selling a company, proper steps need to be taken. The board of directors is under a duty to ensure that the price which is paid is fair and reasonable. This requires the board to consider other offers, and in certain circumstances to go out and try to drum up offers. Or, at the very least, get an independent third party expert valuation.
These steps are designed to make sure that the board of directors gets the best terms for their shareholders. The consequences of not doing this can be director liability to shareholders for failing to obtain maximum shareholder value. This board duty applies regardless whether the company being sold is privately-held or publicly traded. And litigation over this issue is commonplace, especially for public companies, but also increasingly for private companies.
Our home town of Menlo Park has a reputation as a sleepy suburb by comparison to its trendy neighbor to the south, Palo Alto. But some recent news events here have turned heads and elevated our city’s cred as a community with a spirited soul. We want to share a couple of these recent stories with you.
FORMER STANFORD AND 49er STAR BUSTED IN BLOODY RESTAURANT MELEE
RAGE OVER SOY SAUCE SPILLED AND UNDERPANTS BORROWED
Who could have thought the Su Hong Chinese Restaurant in Menlo Park would be the scene of a romantic conflict that turned grimly violent? Su Hong is a venerable institution that has been in Menlo Park for decades. The only conflict ever occurring in this placid and inviting establishment has been over whether a patron got an acceptable message in their fortune cookie, and that has always been readily resolved by bringing more fortune cookies to the table until the customer leaves happy.
But something really ugly happened there, an alleged full-on, man-on-man whupping by former Stanford and 49ers football star Kvamme Harris of his former boyfriend. What triggered this rage? It started with the boyfriend playfully pouring soy sauce over Harris’ fried rice. Whether Harris detests soy sauce, is allergic to it, or thought his fried rice already had enough of it remains unclear. But according to police reports, Harris went into a major hissy fit involving an eruption of loud and profane language, including some harsh allegations that the ex-boyfriend had stolen Harris’ underpants, followed by some blocking and tackling that rattled patrons, management and furniture.
The couple then went outside, where the offensive by Harris reportedly continued, including some major head-bashing and a maneuver by Harris that succeeded in removing the ex-boyfriend’s trousers to prove that he was wearing Harris’ undies. And apparently he was. This prompted more severe head-bashing, sending the ex-boyfriend to the hospital with major wounds and a metal plate being placed in his head.
Serious felony charges are pending against Harris, and the ex-boyfriend is recovering.
THE “NAKED COP” SCANDAL:
CAUGHT IN FLAGRANTE MEOW IN MOTEL 6 BIMBO BUY
A 23-year veteran of the Menlo Park Police Department was arrested in nearby Sunnyvale inside a Motel 6 room with a prostitute. The prostitute came to the door wearing a revealing cat costume with $20 bills flowing out of her cleavage. He was hiding naked behind a shower curtain.
The City of Menlo Park immediately fired the cop, now known in the local press – and probably forever – as “The Naked Cop”. The termination was short-lived. It was soon rescinded when it was pointed out that The Naked Cop is a union member, under an agreement calling for a grievance proceeding before an arbitrator before a termination may occur. Ooops.
The prosecution of the criminal case against The Naked Cop also was also handled in a somewhat clumsy manner. He was arrested at the scene on charges of soliciting a prostitute. But later, the charges were dropped by the District Attorney, apparently based on insufficient evidence.
In the meantime, our local free daily paper, The Daily Post, has been having a field day with the story. The Naked Cop’s photo has appeared on page one of the Post no fewer than 30 times. There isn’t a person in town who doesn’t know what the cop looks like. And the town seems to be about evenly divided over whether he’s suffered enough public humiliation already, or whether his long and apparently previously unblemished career ought to end.
As per our standing policy, we have no opinion on the matter, except to predict that The Naked Cop is likely to continue his police career here behind a desk, out of the public view, where the chief of police can make sure he remains fully clothed at all times.
LAWYERS WITH ISSUES
A SOMEWHAT PREMATURE VICTORY CELEBRATION
An Oklahoma attorney recently lost her law license when she was convicted of aiding in her boyfriend’s escape from jail. Police found the pair in a restaurant shortly after the escape. The arresting officer reported that, while dining, the love-birds were looking at her Facebook page, which contained recently uploaded photos they had taken of the daring escape.
The arresting officers had no comment as to whether he “Liked” the photos.
THE DIGITAL AGE, INDEED
A Mississippi court recently ruled that a car driver who extended his middle finger to a passing police officer did not provide probable cause for the officer to search the car of the finger-extending driver. A hefty haul of drugs, weapons and ammo was found inside the vehicle.
The court noted in its ruling that the gesture is “…an ancient one which, while vulgar and antisocial, does not in and of itself suggest the existence of criminal activity…”
Counsel for the defendant did not like the ruling, and became so enraged that he, too, was drawn to expressing himself by lifting his middle finger. This response was not well-received by the judge, who declared counsel to be in contempt of court, and ordered him to be cuffed by the bailiff at once and taken to the county jail for three days.
The moral of this story: It’s one thing to pick a fight with a cop. It’s another to pick a fight with a judge.
LETTERS TO THE EDITOR
In addition to writing my new book, I’ve recently joined with a really great group of folks that run a global multimedia organization. It’s all very exciting for me.
I’ve been tapped by my new best friends to be on the lookout for promising acquisitions. Aubergines, a notable media property, has of course come to our attention. We’ve admired its always pithy and timely content and its edgy approach to contemporary issues of great importance. We’re also quite aware of its strong and growing readership numbers.
Perhaps we can arrange a time for me and some of my new colleagues to meet with you and discuss our roll-up strategy. I think you’ll really like my pals. They’re just like me: really smart (don’t forget my invention of the Internet), not the least bit carbon-neutral (all of us own numerous homes), and filthy rich.
When can we talk?
With warmest regards,
Give it up. The Nobel Peace Prize, that is. You can keep the Oscar.
You know it’s just a matter of time before the committee in Stockholm comes-a-calling to request a refund of that big Nobel check it wrote you. They are certain to view your shameless sell-out of Current TV, which you founded as a progressive and liberal-tilting cable network, to oil-rich Qatar’s Al-Jazeera Network, as an unforgivable contradiction of all you purport to have ever stood for.
Another way of looking at this pathetic 180-degree maneuver is that it’s just about the most, um, inconvenient truth one could imagine about you.
Aubergines is a quarterly review of borderline-authentic news which publishes at least twice per year. Nothing contained in Aubergines may be construed as legal advice or a legal opinion. Don’t even think about suing us. What few assets we have are held in private, numbered bank accounts located in obscure off-shore jurisdictions which do not recognize the United States or any of its laws. If you enjoy publications that traffic in words like milley, ennui, and meme, you probably won’t be comfortable here. All rights of readers are waived in perpetuity and thereafter. No representations or warranties whatsoever apply. Valid even in jurisdictions where invalid.