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

Mon Apr 20 19:09:37 UTC 2015

Chuck:

As far as I have read emails, no one.

-ed

On Mon, Apr 20, 2015 at 12:52 PM, Gomes, Chuck <cgomes at verisign.com> wrote:

>  I must of missed something.  Who has claimed that the legal separation
> costs are terrifying?
>
>
>
> Chuck
>
>
>
> *From:* Milton L Mueller [mailto:mueller at syr.edu]
> *Sent:* Monday, April 20, 2015 10:06 AM
> *To:* 'Greg Shatan'; Gomes, Chuck
> *Cc:* 'cwg-stewardship at icann.org'
> *Subject:* RE: [CWG-Stewardship] [client com] Draft: Summary of Legal
> Structure for CWG Proposal
>
>
>
> I agree with Greg. This is not a subjective guess, it is based on
> experience, and on common sense.
>
>
>
> (As an aside, I find it amusing that people are claiming that a one-off
> cost associated with legal separation are terrifying while the ongoing
> costs imposed on the community by creating interminable community working
> groups for internal oversight and their ‘intensive work weeks’ are all
> taken in stride.  ;-)
>
>
>
> --MM
>
>
>
> *From:* cwg-stewardship-bounces at icann.org [
> mailto:cwg-stewardship-bounces at icann.org
> <cwg-stewardship-bounces at icann.org>] *On Behalf Of *Greg Shatan
> *Sent:* Monday, April 20, 2015 12:06 AM
> *To:* Gomes, Chuck
> *Cc:* cwg-stewardship at icann.org
> *Subject:* Re: [CWG-Stewardship] [client com] Draft: Summary of Legal
> Structure for CWG Proposal
>
>
>
> 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 ©
> 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
>
>
>
>
>
>
>
>
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