[CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal
Matthew Shears
mshears at cdt.org
Mon Apr 20 07:29:19 UTC 2015
I agree with Jordan and Greg - these statements should be retained (or
if necessary modified with the addition "counsel advises").
On 4/20/2015 6:21 AM, Jordan Carter wrote:
> +1 to Greg.
>
> Jordan
>
> On 20 April 2015 at 16:05, Greg Shatan <gregshatanipc at gmail.com
> <mailto: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 <mailto: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 © 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>
> [mailto: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 <mailto: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 <mailto: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 <tel:%2B1.415.772.1271>
> sflanagan at sidley.com <mailto:sflanagan at sidley.com>
>
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> --
> Jordan Carter
>
> Chief Executive
> *InternetNZ*
>
> 04 495 2118 (office) | +64 21 442 649 (mob)
> jordan at internetnz.net.nz <mailto:jordan at internetnz.net.nz>
> Skype: jordancarter
>
> /A better world through a better Internet /
>
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--
Matthew Shears
Global Internet Policy and Human Rights
Center for Democracy & Technology (CDT)
+ 44 (0)771 247 2987
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