Isolation and sequence of omcA, a gene encoding a decaheme outer membrane cytochrome c of Shewanella putrefaciens MR-1, and detection of omcA homologs in other strains of S. putrefaciens

AbstractThe sequence of the omcA gene, which encodes a decaheme cytochrome c that is localized to the outer membrane (OM) of Shewanella putrefaciens MR-1, was determined. The 2202 bp nucleotide sequence of omcA encodes for 734 amino acids with a predicted molecular protein mass of 78.6 kDa. Comparison with the amino-terminal sequence of the mature protein suggests the presence of a hydrophobic leader sequence which is cleaved during translocation of the protein to the OM. This leader sequence has a lipoprotein consensus sequence for signal peptidase II at the cleavage site. The predicted mature protein is comprised of 708 amino acids with a predicted molecular mass of 75.8 kDa, but the addition of ten covalently attached heme c groups and covalent lipid modification to the amino-terminal cysteine increases the predicted mass to 82.7 kDa. This is consistent with its apparent mass of 83 kDa in SDS-PAGE gels. The predicted amino acid sequence for the OmcA protein shows no significant homology to known proteins. A RNA of approx. 2300 bases that hybridizes to the omcA gene was detected in anaerobically grown MR-1 cells. The size of this transcript is similar to the coding region of the omcA gene, suggesting that it is not part of a multicistronic operon. Similar to MR-1, four other strains of S. putrefaciens were all found to localize a majority of their membrane-bound cytochromes to the OM when grown under anaerobic conditions, and all contained an OM cytochrome of similar size to OmcA. In two of these strains, MR-4 and MR-8, a homolog of omcA was identified by RT-PCR and Southern blotting using primers and probes specific for omcA of MR-1. Western blot analysis using a polyclonal antibody to OmcA was similarly positive in strains MR-4 and MR-8. Partial nucleotide sequence analysis of these homologs demonstrated 74–77% predicted amino acid homology with OmcA of MR-1. In contrast, strains MR-30 and MR-42 tested negative for omcA homologs by Southern and Northern blots, RT-PCR, and Western blots

Appraisal Arbitrage and the Future of Public Company M&A

In this Article, we demonstrate that the stockholder’s appraisal remedy—long-dismissed in corporate law scholarship as useless or worse—is in the middle of a renaissance in public company mergers. We argue that this surge in appraisal activity promises to benefit public shareholders in circumstances where they are most vulnerable. We first show a sea change in the use of appraisal in Delaware. Relying on our hand-collected data, we document sharp recent increases in the incidence of appraisal petitions, in the size of the petitioners’ holdings, and in the sophistication of the petitioners targeting public deals. These litigants appear to invest in target company stock after the announcement of the merger and with the intention of pursuing appraisal. In short, this is appraisal arbitrage. There is every reason to believe that appraisal now stands as the most potent legal challenge to opportunistic mergers. We also present evidence showing that these appraisal petitions bear strong markers of litigation merit—they are, in other words, targeting the right deals. Nevertheless, defense lawyers have recently suggested that appraisal arbitrage constitutes some sort of “abuse” of the remedy and ought to be stopped. This nascent argument has matters precisely backwards. This new world of appraisal should be welcomed and indeed encouraged. Our analysis reveals that appraisal arbitrage focuses private enforcement resources on the transactions that are most likely to deserve scrutiny, and the benefits of this kind of appraisal accrue to minority shareholders even when they do not themselves seek appraisal. In this way, the threat of appraisal helps to minimize agency costs in the takeover setting, thereby decreasing the ex ante cost of raising equity capital and improving allocative efficiency in public company mergers and acquisitions. We offer some modest reforms designed to enhance the operation of the appraisal remedy in Delaware

Lead Plaintiff Incentives in Aggregate Litigation

The lead plaintiff role holds out considerable promise in promoting the deterrence and compensation goals of aggregate litigation. The prevailing approach to compensating lead plaintiffs, however, provides no real incentive for a lead plaintiff to bring claims on behalf of a broader group. The policy challenge is to induce sophisticated parties to press claims not in their individual capacity but instead in a representative capacity, conferring a positive externality on all class members by identifying attractive claims, financing ongoing litigation, and managing the work of attorneys. We outline what an active and engaged lead plaintiff could add to the civil enforcement regime and propose a set of reforms designed induce that engagement. In particular, we argue that courts should be open to awarding lead plaintiffs amounts that are roughly equal in magnitude to those awarded to lead counsel

Interest in Appraisal

The interest rate awarded to appraisal petitioners has recently become a surprising source of controversy. Since 2007, Delaware has presumptively awarded dissenting stockholders prejudgment interest at a rate equal to 5% above the prevailing federal funds rate. In other work, we have documented a marked increase in appraisal activity that began in 2011. Despite evidence that petitioners target low-premium transactions and insider privatizations, some practitioner and judicial commentary has suggested that the statutory interest regime may be driving this increase. In 2015, Delaware’s blue-ribbon corporate law Council proposed a sensible amendment to the statutory interest regime, but it languished through one legislative session, and the issue is again poised for reconsideration. Selecting the appropriate interest rate is a complex and under-examined issue in the optimal design of legal remedies. We argue that the primary goal of interest in appraisal — or any form of prejudgment interest — is to make parties to the dispute indifferent to the passage of time, with no incentive either to drag out or cut short the proceeding. We propose an interest rate regime that builds upon the 2015 Council proposal and promotes time-indifference and dispute resolution. Like the Council, we argue that the respondent companies should be given a unilateral option to make an initial payment to dissenting stockholders that would stop the running of interest on the amount paid. To preserve balanced risk for both sides, the initial payment should not constitute a concession about the minimum amount of fair value, and companies should be entitled to recover from petitioners if the trial judgment is lower than the initial payment. We propose two additional and important features: First, the right to make such a payment to dissenting stockholders should be limited to a discrete 30-day window following the close of the transaction. This ensures that the prepayment right furthers time indifference and is not just a tool of tactical gamesmanship. Second, the prevailing interest rate should be equal to the target company’s weighted average cost of capital. This would have beneficial effects on both parties: it would make the surviving company indifferent between paying the fair value after judgment and making an initial payment, and it would also encourage dissenters to be reasonable about litigating in hopes of obtaining more than the initial payment

Lead Plaintiff Incentives in Aggregate Litigation

The lead plaintiff role holds out considerable promise in promoting the deterrence and compensation goals of aggregate litigation. The prevailing approach to compensating lead plaintiffs, however, provides no real incentive for a lead plaintiff to bring claims on behalf of a broader group. The policy challenge is to induce sophisticated parties to press claims not in their individual capacity but instead in a representative capacity, conferring a positive externality on all class members by identifying attractive claims, financing ongoing litigation, and managing the work of attorneys. We outline what an active and engaged lead plaintiff could add to the civil enforcement regime and propose a set of reforms designed induce that engagement. In particular, we argue that courts should be open to awarding lead plaintiffs amounts that are roughly equal in magnitude to those awarded to lead counsel

Appraisal Arbitrage and the Future of Public Company M&A

In this Article, we demonstrate that the stockholder’s appraisal remedy—long-dismissed in corporate law scholarship as useless or worse—is in the middle of a renaissance in public company mergers. We argue that this surge in appraisal activity promises to benefit public shareholders in circumstances where they are most vulnerable. We first show a sea change in the use of appraisal in Delaware. Relying on our hand-collected data, we document sharp recent increases in the incidence of appraisal petitions, in the size of the petitioners’ holdings, and in the sophistication of the petitioners targeting public deals. These litigants appear to invest in target company stock after the announcement of the merger and with the intention of pursuing appraisal. In short, this is appraisal arbitrage. There is every reason to believe that appraisal now stands as the most potent legal challenge to opportunistic mergers. We also present evidence showing that these appraisal petitions bear strong markers of litigation merit—they are, in other words, targeting the right deals. Nevertheless, defense lawyers have recently suggested that appraisal arbitrage constitutes some sort of “abuse” of the remedy and ought to be stopped. This nascent argument has matters precisely backwards. This new world of appraisal should be welcomed and indeed encouraged. Our analysis reveals that appraisal arbitrage focuses private enforcement resources on the transactions that are most likely to deserve scrutiny, and the benefits of this kind of appraisal accrue to minority shareholders even when they do not themselves seek appraisal. In this way, the threat of appraisal helps to minimize agency costs in the takeover setting, thereby decreasing the ex ante cost of raising equity capital and improving allocative efficiency in public company mergers and acquisitions. We offer some modest reforms designed to enhance the operation of the appraisal remedy in Delaware