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Technology Insurance
  Jury award for compensatory damages.
When a software solutions provider fails to live up to performance commitments made via a contract for a new software system, a local jury awards the plaintiff in excess of $2 million in compensatory damages.
Indemnity Paid: $2,400,000
Defense Cost Paid: $345,000

New Public Company Rules Hit Private Firms

Think the corporate reforms of 2002 were targeted entirely at publicly owned corporations?

Think again. The Sarbanes-Oxley Act, created in the wake of Enron and other corporate scandals, can also affect private companies that might become publicly owned, according to securities attorneys. The Sarbanes-Oxley corporate governance reforms tighten regulation of five key areas: disclosure, board of directors, auditors, ethics, and compensation.

When a private company files a registration statement (to offer securities to the public) with securities regulators or when a publicly owned corporation acquires it, the company becomes subject to Sarbanes-Oxley regulations.

A private company might need to demonstrate its readiness to meet Sarbanes-Oxley requirements if it anticipates being acquired or plans to make an initial public offering of stock. Its readiness or lack of readiness might impact the acquisition, offering price, or its ability to complete a transaction.

Leaders of emerging companies who contemplate entering a public environment should consider how their firms would function in that environment. Examining and implementing practices in the five key areas can also help a private company position itself more effectively with venture capitalists, early-stage investors, strategic partners, and management talent.

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