Scooter Companies Try to Transition from Cash-Hemorrhaging Startups to Profitable Businesses

Wall Street Journal writer Marc Vartabedian reported recently that, “Shared-electric-scooter startups have blazed into cities across the world over the past two years. Fueled by roughly $1.5 billion in venture capital, industry leaders Bird Rides Inc. and Lime raced to set up sprawling networks of scooter fleets that users can rent with an app.

“Over the past year, that breakneck pace of global growth—which has enabled users in more than 200 cities across the world to rent a scooter for a few hours and pay with their phones—has caught up with these companies.

“Lime and Bird’s ambitious expansions outpaced operations set up essentially on the fly, according to more than a dozen current and former employees. The spotty logistics of their networks have weighed on the companies’ efforts to become profitable and led to safety concerns that this could endanger riders, these people allege.”

The Journal article noted that, “The renewed focus comes as the pair face pressure to transition from cash-hemorrhaging startups to profitable businesses after public investors hammered a string of highly valued but money-losing technology companies last year. Investors, including prominent Silicon Valley firms, have plowed roughly $3 billion into Bird, Lime and a handful of smaller scooter startups since 2017, according to data provider PitchBook Data Inc. Investors have valued Lime and Bird at roughly $2.5 billion each.”

Mr. Vartabedian explained that, “Also riding on Bird and Lime’s ability to remake their operations is the issue of safety. Mechanics for both startups say parts shortages affected markets suddenly and would often force them to scavenge parts—including brakes, wheels and throttles—from other broken scooters to make fixes.”

Posted in Start-up Company Law | Comments closed

Reps. Johnson, Soto Introduce Bill to Ensure Clear Meat Processing and Labeling

A news release yesterday from U.S. Representatives Dusty Johnson (R-S.D.) and Darren Soto (D-FL) stated that, “[Reps. Johnson and Darren Soto] today introduced the Food Safety Modernization for Innovative Technologies Act, a bill which would formalize a regulatory framework for food derived from cell-cultured technology.

“Earlier this year, the Trump Administration established an agreement between the Food and Drug Administration (FDA) and the U.S. Department of Agriculture (USDA) to ensure food and labeling safety. The bill leverages the lab and food safety oversight expertise of the FDA and USDA. As cell-cultured meat technologies progress, this bill will ensure thorough agency oversight to protect consumers and the integrity of product claims.

“‘South Dakota ranchers already produce a safe, quality product, anything lab grown should have to meet the same standards for consumers,’ said Johnson. ‘As cell-cultured foods make way to the supermarket, Americans deserve to know exactly what it is they are feeding their families.'”

Yesterday’s update added that, “Under this legislation, FDA would oversee the lab process of multiplying animal collected cells to make tissue and USDA would oversee processing, packaging and labeling. Through a coordinated agency process, the Secretary of Agriculture would have the authority to require prior approval of labels or labeling claims before introduction into the consumer market. The bill also provides protections for misbranded products, including ‘imitation’ products that could confuse consumers.”

Posted in Agriculture Law | Comments closed

Acquisition Tactics Fall on a Spectrum- Companies Take Different Views on M&A Success

Andrew Hill indicated recently at The Financial Times Online that, “If there is one truism in mergers and acquisitions, it is this: the success of the deal depends on the success of the integration process. This, in itself, hinges on the fit between the two companies’ cultures ­— particularly with the dreaded ‘mergers of equals’ ­­­— and the amount of preparation that goes into the deal.

“Although big companies have improved their integration skills, about half of acquirers underperform and staff affected by the process suffer from disruption and anxiety. Furthermore, the critical question of how quickly and how far the integration should go remains open for debate.

“The answer seems to have shifted over time. US technology group Cisco was once the champion of rapid integration, but it has gradually become more inclined to maintain the identity of its acquired companies.”

The FT item indicated that, “There are still examples of take-no-prisoners integrators, however — global brewer Anheuser-Busch InBev is a prominent example. Vicente Falconi, the Brazilian consultant and longtime adviser to the group, once told me that the arrival of InBev managers at Anheuser-Busch, after the Budweiser-maker’s takeover in 2008, was ‘like a military disembarkation.’ Efficiency and margin improvement were the occupiers’ objective.”

Mr. Hill also pointed out that, “Nuno Fernandes, professor at Iese Business School in Barcelona and author of The Value Killers, a book about M&A success (and failure), says acquisition tactics fall on a spectrum from ‘bulldoze’ to ‘leave alone.'”

“Entrepreneurs may not care about the trappings of corporate life or wish to attend bureaucratic meetings organised by their new masters, but they will want to have the right to be there when decisions are made about whether or not to bulldoze their beloved babies,” Mr. Hill said.

Posted in Start-up Company Law | Comments closed

USDA Reminds Producers of Feb. 28 Deadline for Conservation Reserve Program General Signup

An update yesterday from USDA’s Farm Service Agency (FSA) stated that, “The [USDA] reminds agricultural producers interested in the Conservation Reserve Program (CRP) 2020 general signup to enroll by February 28, 2020. This signup is available to farmers and private landowners who are either enrolling for the first time or re-enrolling for another 10- to 15-year term.

“‘This is the first opportunity for general sign up since 2016, and we want producers and private landowners to know that we have just one month remaining,’ FSA Administrator Richard Fordyce said. ‘It is critical that they make their final determinations and submit offers very soon to take advantage of this popular conservation program.’

“Farmers and ranchers who enroll in CRP receive yearly rental payments for voluntarily establishing long-term, resource-conserving plant species, such as approved grasses or trees (known as ‘covers’), which can control soil erosion, improve water quality and develop wildlife habitat on marginally productive agricultural lands.”

The FSA update added that, “The CRP continuous signup is ongoing, which enables producers to enroll for certain practices. FSA plans to open the Soil Health and Income Protection Program, a CRP pilot program, in early 2020, and the 2020 CRP Grasslands signup runs from March 16, 2020 to May 15, 2020.

“To enroll in CRP, contact your local FSA county office or visit fsa.usda.gov/crp. To locate your local FSA office, visit farmers.gov/service-locator.”

Posted in Agriculture Law | Comments closed

Bayer’s Latest Roundup Weedkiller Trial Postponed

Wall Street Journal writers Laura Kusisto and Ruth Bender reported on Friday that, “The latest trial over allegations that Bayer AG’s  popular Roundup weedkiller causes cancer was postponed indefinitely at the last minute on Friday to allow room for escalating settlement talks to continue.

Bayer was hours away from facing another jury on the issue, after the German chemical and drug conglomerate over the last year and a half lost the first three Roundup trials for a total of $190.5 million in awards. A fourth adverse verdict could have handed plaintiffs, who number more than 42,000, additional ammunition in settlement talks that have dragged on for months.

“Analysts estimate any settlement would be in the $8 billion to $12 billion range, in talks led by court-appointed mediator Ken Feinberg, who said he was ‘cautiously optimistic’ a deal could be struck in the coming weeks.”

The Journal article noted that, “Bayer and a host of plaintiffs have moved closer in recent weeks to settling the Roundup litigation, according to attorneys and Mr. Feinberg.

“In talks, Bayer and plaintiff lawyers are trying to establish the conditions for compensating plaintiffs as a step toward coming up with a total amount for a potential settlement, according to people familiar with the settlement negotiations. Bayer wants a deal that would include a way to handle potential future claims. How that can be done is still uncertain, though lawyers expect the company to set aside a pool of money to address future claimants.”

Posted in Agriculture Law | Comments closed

USDA Reminds Producers Who Received ‘Top-up Payments’ about Premium Payment Deadlines

A news release Friday from USDA’s Risk Management Agency (RMA) stated that, “[RMA] is reminding producers who received a prevented planting ‘top-up’ payment last fall that they are required to purchase Federal crop insurance for the next two crop years. The deadlines (Sales Closing Dates) to purchase these crop insurance policies are January 31, February 15, February 28, and March 15, 2020, depending on a producer’s policy.

“‘We encourage crop insurance agents to help us spread the word to their customers,’ said RMA Administrator Martin Barbre. ‘We want to make sure producers pay their premiums on time, so they don’t become ineligible to buy crop insurance.’

“Producers who have trouble making their premium payment should contact their crop insurance agent to set up a written payment agreement to avoid being made ineligible to purchase Federal crop insurance and having to pay back the ‘top-up’ payment.”

Last week’s update added that, “Producers who had a payable prevented planting indemnity related to flooding, excess moisture or causes other than drought in 2019 automatically received a ‘top-up’ payment from their Approved Insurance Providers in fall 2019. As of January 20, RMA has paid roughly $4.29 billion in claims related to prevented planting for the 2019 crop year, and $4 billion of those total prevented planting claims were associated with flood and excess moisture causes of loss.”

“For more information on the two-year Crop Insurance Purchasing Requirement, see RMA’s Prevented Planting Disaster Payments FAQs.”

Posted in Agriculture Law | Comments closed

Bayer Faces Fourth U.S. Roundup Cancer Trial

Reuters writer Tina Bellon reported today that, “Bayer AG is set to face a fourth U.S. jury trial over allegations that its Roundup weed killer causes cancer, with four cancer patients in the hometown of its agricultural subsidiary Monsanto scheduled to begin making their case on Friday.

“The lawsuit marks the first multi-plaintiff trial in the litigation over whether glyphosate, Roundup’s active ingredient, is carcinogenic, and is the first trial outside of California. It is being held in St. Louis, where Monsanto was headquartered before Bayer bought the company in a $63 billion deal in 2018.

Three consecutive juries found the company liable for causing cancer with damages of tens of millions of dollars awarded to each plaintiff. Bayer is appealing those verdicts.”

The Reuters article stated that, “Court-appointed mediator Ken Feinberg has put the number of Roundup cancer claimants at more than 75,000 while Bayer said the claims it has been served with in court were below 50,000.”

Ms. Bellon added that, “While most plaintiffs’ lawyers have agreed to postpone trials pending negotiations, some have decided to pursue their clients’ day in court.

“The case in Missouri’s Circuit Court for the 22nd Judicial Circuit of the City of St. Louis is scheduled to last several weeks, with both sides presenting extensive scientific evidence through expert witnesses.”

Posted in Agriculture Law | Comments closed

Entrepreneurs Connect Consumers with Surplus Produce

Hazel Sheffield reported recently at The Financial Times Online that, “For Tessa Clarke, food waste is personal. The co-founder of Olio, a food-sharing app, was raised on a farm in North Yorkshire where her parents put her to work as soon as she was old enough to carry a bucket. ‘My parents had no qualms about child labour,’ she laughs. ‘My brother and I had a misspent youth working on the farm to produce food. So for me food waste is very upsetting — how would you feel if every day a third of your work was thrown away?'”

The FT article noted that, “Ms Clarke is on to something. Entrepreneurs are tapping into the food waste trend, describing it as a ‘double win:” a way to meet the need of a food producer or seller to dispose of surplus, while consumers can buy it at very reduced prices or receive it for free.

The sector has grown rapidly in the past four years thanks to the rise of sharing technology, combined with consumer demand to address waste. There are now apps that tell you when the food in your fridge is about to go off and how much you are throwing away. There are community fridges to donate to and sharing apps that send out alerts when there is surplus food available from neighbours and nearby restaurants.”

Ms. Sheffield pointed out that, “Olio says it has recruited 5,000 food waste ‘heroes,’ volunteers trained to collect surplus food from 300 stores around the UK, take pictures and post them on the Olio app, where they can be picked up by neighbours for free. ‘Our volunteers tell us it’s a life-affirming experience,’ Ms Clarke says. ‘They get to go to the stores, see all that amazing food and then give it away to the community.'”

Posted in Start-up Company Law | Comments closed

Many Homeowners Pay Higher Rates After Refinancing Their Homes to Tap Home Equity

Wall Street Journal writer Ben Eisen reported recently that, “Many U.S. homeowners who need cash are taking it out of their properties. The trade-off: higher interest rates.

“Over the past two years, a big chunk of homeowners took on higher interest rates when they refinanced to tap their home equity. These cash-out refinancings, as they are known, free up money homeowners can use to pay down credit-card debt, renovate or invest in a new property.

Nearly 60% of cash-out refinancings in 2018 came with higher interest rates, the biggest share since before the financial crisis, according to Black Knight Inc., a mortgage-data and technology firm. This year, that number fell to around 44% of cash-out deals, but it remains at more than three times its average between 2009 and 2017.”

The Journal article noted that, “This corner of the mortgage market illuminates the crosscurrents in the U.S. economy: After roughly a decade of rising home prices, homeowners are flush with record amounts of home equity they can tap. But many Americans remain short on cash and are increasingly relying on debt to fund their lives.”

Mr. Eisen added that, “Cash-out refis made up a significant share of refinancings in the third quarter, helping fuel a rebound in the mortgage market after a dismal 2018. Led by refis, lenders originated $700 billion in mortgages in the third quarter, the most since before the financial crisis, according to industry research group Inside Mortgage Finance.”

Posted in Real Estate Law | Comments closed

Certified Organic Flavors Now Required in Organic Products

A news release earlier this month from the Organic Trade Association stated that, “A final rule published by the U.S. Department of Agriculture’s National Organic Program (NOP) now requires the use of certified organic flavors in certified organic products when they are commercially available. The rule was implemented and went into effect on December 27, 2019.

“‘It is now time that the regulations catch up with the marketplace,’ says Laura Batcha, CEO and Executive Director of the Organic Trade Association. ‘Our position is that the organic flavor supply has grown to a size where it is no longer appropriate to allow the use of non-organic natural flavors in certified organic products.’

“The Organic Trade Association submitted a petition to help grow the availability and use of organic flavors in 2014. Natural flavors have been included on the National List since it was first implemented in 2002. Since that time, however, many organic flavors have been developed, and are being successfully used by many companies.”

The news update added that, “In addition to its practical guide, the Organic Trade Association is offering a webinar at 2 p.m. Eastern on January 29 titled “New Rules: Requirement for Using Organic Flavors in Processed Organic Products” to its members as well as non-members.”

Posted in Agriculture Law | Comments closed