[CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal

Mon Apr 20 04:21:10 UTC 2015

+1 to Greg.

Jordan

On 20 April 2015 at 16:05, Greg Shatan <gregshatanipc at gmail.com> wrote:

> Respectfully, I disagree with Eduardo and Chuck on the following issue:
>
> 2] Items (a) & (c) in section  "The weaknesses of the proposed
> structure are as follows." (page 3):
>
> *"(a) Requires forming a new entity and on an ongoing basis attending to a
> set of  associated corporate formalities, although those can be fairly
> minimal;"*
>
> " (c) May have some negative impact on operational efficiency due to the *functional
> separation, and the separate legal status will introduce some **additional
> costs, although those should not be significant." *
>
> I suggest to delete the two statements pointed here by an
> underline/italics. Both statements are seemly subjectives and tend to steer
> the reader
>  to think that this will be easy to implement and that it will not be
> costly. There has not been any deep analysis done on these to support
> either statement.
>
>
> As a general point, we have asked counsel to provide us not only with
> their technical expertise, but also with the benefit of their practical
> experience.  Here they are telling us two things based on their experience:
>
> -- corporate formalities "can be fairly minimal."
> -- additional costs introduced by operating PTI with a separate legal
> status "should not be significant."
>
> Our counsels' practical experience certainly includes forming corporate
> entities and attending to corporate formalities (sometimes called
> "corporate housekeeping") -- I'd daresay among our counsel they have done
> and continue to do this for hundreds (if not thousands) of corporations.
> From my own experience and knowledge, corporate formation and corporate
> housekeeping are essentially ministerial tasks, and are neither
> particularly complex or time-consuming (though it requires some familiarity
> and experience to do these tasks).  It's really a fairly objective and
> entirely reasonable statement for someone with the requisite knowledge to
> say that these "can be fairly minimal."  Indeed, I can't think of a
> scenario where attending to corporate formalities would not be fairly
> minimal.
>
> Similarly, I'm fairly sure counsel have dealt many times with the costs
> associated with having business units in wholly-owned or controlled
> subsidiaries rather than divisions, and they are aware of what those costs
> are.  Again this seems like a reasonable statement and one that I'm sure is
> made objectively.  From my experience, the costs that are a direct result
> of running a business as a subsidiary, as opposed to as a business unit
> within the same entity, are not significant.
>
> In sum, I believe these are both reasonable and very unsurprising
> statements.  I know that it is not the intent, but I think that giving the
> impression that the opposite (corporate formalities are not fairly minimal;
> costs resulting from operating a business as a subsidiary (vs. as a
> business unit) are significant) could be true creates FUD where there
> should be none.  Therefore, I think it would be appropriate to accept this
> advice.
>
> If we don't want to accept counsel's advice, I don't think the appropriate
> response is to delete it.  Rather, I think the appropriate action would be
> to ask counsel to explain the basis of the statements.  Alternatively, we
> could insert "counsel advises" after "although" in each statement.  Let me
> say that I don't believe we need to do either of these things.  But, if the
> group is not willing to accept these and move on, these are the courses of
> action that should be considered.
>
> Greg
>
>
> On Sun, Apr 19, 2015 at 11:51 AM, Gomes, Chuck <cgomes at verisign.com>
> wrote:
>
>>  I think that Eduardo is probably right that we really don't know
>> whether the increased cost for the legal separation will be significant or
>> not without a detailed analysis by the Finance Team.  Now that we are
>> specifically leaning toward the legal separation approach, I suggest that
>> we request an analysis by the Finance Team right away.  It will take them
>> awhile to do it and they will probably have some questions for us but the
>> sooner we get that started the better.  Xavier understands that a lot of
>> the shared IANA costs can still be shared so that will minimize the
>> increase but there will still be increases.  As far as the language in (c)
>> below, I suggest we say something along these lines instead saying '*although
>> those should not be significant*':  "The significance of the increased
>> costs cannot be determined until a detailed analysis is done by the ICANN
>> Finance Team, but the CWG has requested that analysis and expects to have
>> at least preliminary results before the public comment period ends."
>>
>>
>>
>> Chuck
>>
>>
>>
>> *From:* cwg-stewardship-bounces at icann.org [mailto:
>> cwg-stewardship-bounces at icann.org] *On Behalf Of *Eduardo Diaz
>> *Sent:* Saturday, April 18, 2015 4:43 PM
>> *To:* cwg-stewardship at icann.org
>> *Subject:* Re: [CWG-Stewardship] [client com] Draft: Summary of Legal
>> Structure for CWG Proposal
>>
>>
>>
>> My comments about the S-A document 20179247_3 on legal structure:
>>
>>
>>
>> 1] It is not clear who is going to decide about the concepts of
>> designator vs. members (2nd para, page3). Is this an item for the CCWG to
>> resolve?
>>
>>
>>
>> 2] Items (a) & (c) in section  "The weaknesses of the proposed
>> structure are as follows." (page 3):
>>
>>
>>
>> *"(a) Requires forming a new entity and on an ongoing basis attending to
>> a set of  associated corporate formalities, although those can be fairly
>> minimal;"*
>>
>>
>>
>> *" (c) May have some negative impact on operational efficiency due to
>> the *
>>
>> *functional separation, and the separate legal status will introduce
>> some *
>>
>> *additional costs, although those should not be significant." *
>>
>>
>>
>> I suggest to delete the two statements pointed here by an
>> underline/italics. Both statements are seemly subjectives and tend to steer
>> the reader
>>
>>  to think that this will be easy to implement and that it will not be
>> costly. There has not been any deep analysis done on these to support
>> either statement.
>>
>>
>>
>> -ed
>>
>>
>>
>>
>>
>>
>>
>> On Sat, Apr 18, 2015 at 1:49 PM, Client Committee List for CWG <
>> cwg-client at icann.org> wrote:
>>
>> Dear All,
>>
>>
>>
>> Attached is a summary of the current legal structure under consideration
>> by the CWG.   This also includes the CCWG dependencies.
>>
>>
>>
>> Please let us know if you have any comments or would like to discuss.
>>
>>
>>
>> Best regards,
>>
>> Sharon
>>
>>
>>
>> *SHARON* *FLANAGAN*
>> Partner
>>
>> *Sidley Austin LLP*
>> +1.415.772.1271
>> sflanagan at sidley.com
>>
>>
>>
>>
>>
>>
>>
>>
>> ****************************************************************************************************
>> This e-mail is sent by a law firm and may contain information that is
>> privileged or confidential.
>> If you are not the intended recipient, please delete the e-mail and any
>> attachments and notify us
>> immediately.
>>
>>
>> ****************************************************************************************************
>>
>>
>> _______________________________________________
>> Cwg-client mailing list
>> Cwg-client at icann.org
>> https://mm.icann.org/mailman/listinfo/cwg-client
>>
>>
>>
>>
>>
>> --
>>
>> *NOTICE:* This email may contain information which is confidential
>> and/or subject to legal privilege, and is intended for the use of the named
>> addressee only. If you are not the intended recipient, you must not use,
>> disclose or copy any part of this email. If you have received this email by
>> mistake, please notify the sender and delete this message immediately.
>>
>> _______________________________________________
>> CWG-Stewardship mailing list
>> CWG-Stewardship at icann.org
>> https://mm.icann.org/mailman/listinfo/cwg-stewardship
>>
>>
>
> _______________________________________________
> CWG-Stewardship mailing list
> CWG-Stewardship at icann.org
> https://mm.icann.org/mailman/listinfo/cwg-stewardship
>
>

-- 
Jordan Carter

Chief Executive
*InternetNZ*

04 495 2118 (office) | +64 21 442 649 (mob)
jordan at internetnz.net.nz
Skype: jordancarter

*A better world through a better Internet *
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mm.icann.org/pipermail/cwg-stewardship/attachments/20150420/c94dbe82/attachment-0001.html>