<div dir="ltr">Chuck:<div><br></div><div>As far as I have read emails, no one.</div><div><br></div><div>-ed</div></div><div class="gmail_extra"><br><div class="gmail_quote">On Mon, Apr 20, 2015 at 12:52 PM, Gomes, Chuck <span dir="ltr"><<a href="mailto:cgomes@verisign.com" target="_blank">cgomes@verisign.com</a>></span> wrote:<br><blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">
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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1f497d">I must of missed something. Who has claimed that the legal separation costs are terrifying?<u></u><u></u></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1f497d"><u></u> <u></u></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1f497d">Chuck<u></u><u></u></span></p>
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<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif""> Milton L Mueller [mailto:<a href="mailto:mueller@syr.edu" target="_blank">mueller@syr.edu</a>]
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<b>Sent:</b> Monday, April 20, 2015 10:06 AM<br>
<b>To:</b> 'Greg Shatan'; Gomes, Chuck<br>
<b>Cc:</b> '<a href="mailto:cwg-stewardship@icann.org" target="_blank">cwg-stewardship@icann.org</a>'<br>
<b>Subject:</b> RE: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal<u></u><u></u></span></p>
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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1f497d">I agree with Greg. This is not a subjective guess, it is based on experience, and on common sense.
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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1f497d">(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. ;-)<u></u><u></u></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1f497d"><u></u> <u></u></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1f497d">--MM<u></u><u></u></span></p>
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<p class="MsoNormal"><b><span style="font-size:11.0pt;font-family:"Calibri","sans-serif"">From:</span></b><span style="font-size:11.0pt;font-family:"Calibri","sans-serif"">
<a href="mailto:cwg-stewardship-bounces@icann.org" target="_blank">cwg-stewardship-bounces@icann.org</a> [<a href="mailto:cwg-stewardship-bounces@icann.org" target="_blank">mailto:cwg-stewardship-bounces@icann.org</a>]
<b>On Behalf Of </b>Greg Shatan<br>
<b>Sent:</b> Monday, April 20, 2015 12:06 AM<br>
<b>To:</b> Gomes, Chuck<br>
<b>Cc:</b> <a href="mailto:cwg-stewardship@icann.org" target="_blank">cwg-stewardship@icann.org</a><br>
<b>Subject:</b> Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal<u></u><u></u></span></p>
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<p class="MsoNormal"><u></u> <u></u></p>
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<p class="MsoNormal"><span style="font-family:"Verdana","sans-serif"">Respectfully, I disagree with Eduardo and Chuck on the following issue:<u></u><u></u></span></p>
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<p class="MsoNormal"><span style="font-family:"Verdana","sans-serif""><u></u> <u></u></span></p>
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<p class="MsoNormal"><span style="font-size:9.5pt;font-family:"Arial","sans-serif";color:blue">2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3): </span><span style="font-size:9.5pt;font-family:"Arial","sans-serif""><u></u><u></u></span></p>
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<p class="MsoNormal"><b><span style="font-size:9.5pt;font-family:"Arial","sans-serif";color:blue">"(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, <i><u>although those can be fairly minimal</u></i>;"</span></b><span style="font-size:9.5pt;font-family:"Arial","sans-serif""><u></u><u></u></span></p>
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<p class="MsoNormal"><b><span style="font-size:9.5pt;font-family:"Arial","sans-serif";color:blue">" (c) May have some negative impact on operational efficiency due to the functional separation, and the separate legal status will introduce some additional costs, <i><u>although
those should not be significant</u></i>." </span></b><b><span style="font-size:9.5pt;font-family:"Arial","sans-serif""><u></u><u></u></span></b></p>
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<p class="MsoNormal"><b><span style="font-size:9.5pt;font-family:"Arial","sans-serif""><u></u> <u></u></span></b></p>
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<p class="MsoNormal"><span style="font-size:9.5pt;font-family:"Arial","sans-serif";color:blue">I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader<u></u><u></u></span></p>
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<p class="MsoNormal"><span style="font-size:9.5pt;font-family:"Arial","sans-serif";color:blue"> 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.</span><span style="font-size:9.5pt;font-family:"Arial","sans-serif""><u></u><u></u></span></p>
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<p class="MsoNormal"><span style="font-size:9.5pt;font-family:"Arial","sans-serif""><u></u> <u></u></span></p>
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<p class="MsoNormal"><span style="font-size:9.5pt;font-family:"Verdana","sans-serif"">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:</span><span style="font-size:9.5pt"><u></u><u></u></span></p>
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<p class="MsoNormal"><span style="font-size:9.5pt"><u></u> <u></u></span></p>
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<p class="MsoNormal"><span style="font-size:9.5pt;font-family:"Verdana","sans-serif"">-- corporate formalities "can be fairly minimal."</span><span style="font-size:9.5pt"><u></u><u></u></span></p>
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<p class="MsoNormal"><span style="font-size:9.5pt;font-family:"Verdana","sans-serif"">-- additional costs introduced by operating PTI with a separate legal status "should not be significant."</span><span style="font-size:9.5pt"><u></u><u></u></span></p>
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<p class="MsoNormal"><span style="font-size:9.5pt;font-family:"Verdana","sans-serif"">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.</span><span style="font-size:9.5pt"><u></u><u></u></span></p>
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<p class="MsoNormal"><span style="font-size:9.5pt;font-family:"Verdana","sans-serif"">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.</span><span style="font-size:9.5pt"><u></u><u></u></span></p>
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<p class="MsoNormal"><span style="font-size:9.5pt;font-family:"Verdana","sans-serif"">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.</span><span style="font-size:9.5pt"><u></u><u></u></span></p>
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<p class="MsoNormal"><span style="font-size:9.5pt;font-family:"Arial","sans-serif""><u></u> <u></u></span></p>
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<p class="MsoNormal"><span style="font-size:9.5pt;font-family:"Arial","sans-serif"">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.<u></u><u></u></span></p>
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<p class="MsoNormal"><span style="font-size:9.5pt;font-family:"Arial","sans-serif""><u></u> <u></u></span></p>
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<p class="MsoNormal"><span style="font-size:9.5pt;font-family:"Arial","sans-serif"">Greg<u></u><u></u></span></p>
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<p class="MsoNormal"><span style="font-size:9.5pt;font-family:"Arial","sans-serif""><u></u> <u></u></span></p>
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<p class="MsoNormal"><u></u> <u></u></p>
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<p class="MsoNormal">On Sun, Apr 19, 2015 at 11:51 AM, Gomes, Chuck <<a href="mailto:cgomes@verisign.com" target="_blank">cgomes@verisign.com</a>> wrote:<u></u><u></u></p>
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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1f497d">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 ‘</span><b><i><u>although those should not be significant</u></i></b><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1f497d">’: “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.”</span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1f497d"> </span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1f497d">Chuck</span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1f497d"> </span><u></u><u></u></p>
<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">
<a href="mailto:cwg-stewardship-bounces@icann.org" target="_blank">cwg-stewardship-bounces@icann.org</a> [mailto:<a href="mailto:cwg-stewardship-bounces@icann.org" target="_blank">cwg-stewardship-bounces@icann.org</a>]
<b>On Behalf Of </b>Eduardo Diaz<br>
<b>Sent:</b> Saturday, April 18, 2015 4:43 PM<br>
<b>To:</b> <a href="mailto:cwg-stewardship@icann.org" target="_blank">cwg-stewardship@icann.org</a><br>
<b>Subject:</b> Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal</span><u></u><u></u></p>
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<p class="MsoNormal"> <u></u><u></u></p>
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<p class="MsoNormal">My comments about the S-A document 20179247_3 on legal structure:<u></u><u></u></p>
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<p class="MsoNormal"> <u></u><u></u></p>
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<p class="MsoNormal">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?<u></u><u></u></p>
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<p class="MsoNormal"> <u></u><u></u></p>
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<p class="MsoNormal">2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3): <u></u><u></u></p>
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<p class="MsoNormal"> <u></u><u></u></p>
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<p class="MsoNormal"><b>"(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities,
<i><u>although those can be fairly minimal</u></i>;"</b><u></u><u></u></p>
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<p class="MsoNormal"> <u></u><u></u></p>
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<p class="MsoNormal"><b>" (c) May have some negative impact on operational efficiency due to the </b><u></u><u></u></p>
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<p class="MsoNormal"><b>functional separation, and the separate legal status will introduce some </b><u></u><u></u></p>
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<p class="MsoNormal"><b>additional costs,
<i><u>although those should not be significant</u></i>." </b><u></u><u></u></p>
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<p class="MsoNormal"><b> </b><u></u><u></u></p>
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<p class="MsoNormal">I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader<u></u><u></u></p>
</div>
<p class="MsoNormal"> 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. <u></u><u></u></p>
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<div>
<p class="MsoNormal"> <u></u><u></u></p>
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<p class="MsoNormal">-ed<u></u><u></u></p>
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<p class="MsoNormal">On Sat, Apr 18, 2015 at 1:49 PM, Client Committee List for CWG <<a href="mailto:cwg-client@icann.org" target="_blank">cwg-client@icann.org</a>> wrote:<u></u><u></u></p>
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<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#1f497d">Dear All,</span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#1f497d"> </span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#1f497d">Attached is a summary of the current legal structure under consideration by the CWG. This also includes the CCWG dependencies.</span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#1f497d"> </span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#1f497d">Please let us know if you have any comments or would like to discuss.</span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#1f497d"> </span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#1f497d">Best regards,</span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#1f497d">Sharon</span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif";color:#1f497d"> </span><u></u><u></u></p>
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<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#1f497d">SHARON</span></b><span style="font-size:9.0pt;font-family:"Arial","sans-serif";color:#1f497d"> </span><b><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#1f497d">FLANAGAN</span></b><span style="font-size:9.0pt;font-family:"Arial","sans-serif";color:#1f497d"><br>
Partner<br>
<br>
</span><b><span style="font-size:10.0pt;font-family:"Arial","sans-serif";color:#1f497d">Sidley Austin LLP</span></b><b><span style="font-size:9.0pt;font-family:"Arial","sans-serif";color:#1f497d"><br>
</span></b><span style="font-size:9.0pt;font-family:"Arial","sans-serif";color:#1f497d"><a href="tel:%2B1.415.772.1271" target="_blank">+1.415.772.1271</a><br>
<a href="mailto:sflanagan@sidley.com" title="Click to send email to Flanagan, Sharon" target="_blank">sflanagan@sidley.com</a></span><u></u><u></u></p>
</div>
<p class="MsoNormal"> <u></u><u></u></p>
<p class="MsoNormal"><span style="font-family:"Arial","sans-serif""> </span><u></u><u></u></p>
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<p> <u></u><u></u></p>
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