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On December 1, 2016, Parker Hannifin Corporation and CLARCOR Inc. announced that the companies have entered into a definitive agreement under which Parker will acquire CLARCOR for approximately $4.3 billion in cash, including the assumption of net debt. The transaction has been unanimously approved by the board of directors of each company. Upon closing of the transaction, expected to be completed by or during the first quarter of Parker’s fiscal year 2018, CLARCOR will be combined with Parker’s Filtration Group to form a leading and diverse global filtration business. Bass, Berry & Sims has served CLARCOR as primary corporate and securities counsel for 10 years and served as lead counsel on this transaction. Read more here.

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Securities Law Exchange BlogSecurities Law Exchange blog offers insight on the latest legal and regulatory developments affecting publicly traded companies. It focuses on a wide variety of topics including regulation and reporting updates, public company advisory topics, IPO readiness and exchange updates including IPO announcements, M&A trends and deal news.

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GovCon Blog: Small Business Reaches Settlement to Resolve Allegations it Falsely Certified Compliance with SBIR Program

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April 27, 2015

Despite fulfilling its contractual obligations and voluntarily disclosing its possible oversight, nLight Photonic, Inc. ("nLight"), a Washington-based small business, was pushed to a $420,000 settlement with the Department of Justice to resolve allegations that it violated the False Claims Act by knowingly submitting false certifications regarding its eligibility for contracts and grants under the U.S. Small Business Administration's ("SBA") Small Business Innovation Research ("SBIR") program.

The SBIR program was created to encourage U.S. small businesses to conduct federal research & development that may also serve the community at-large. To be eligible for SBIR funds, a company must satisfy several conditions, including: 

  1. Having a U.S. place of business;
  2. Being majority owned and controlled by individuals that are U.S. citizens (or permanent residents) or by another entity meeting this requirement; and
  3. Employing fewer than 500 employees.
In limited circumstances, an awardee may now be owned by a venture capitalist, hedge fund, or private equity firm as long as a single firm does not hold a majority interest in the business. 

Between 2004 and 2013, nLight received numerous SBIR contracts and grants worth more than $15 million from the Army, Navy, Air Force, NASA and the Department of Energy. During that time, nLight allegedly certified that it was eligible for the SBIR program, despite being owned by several companies and venture capitalists firms that disqualified it from SBIR funds. Their possible ineligibility was brought to the federal government's attention when nLight flagged the issue after receiving an information request from the Department of Energy because it and a recent nLight acquisition had received SBIR grants. 

Even though nLight brought the matter to the government's attention, the Department of Justice and SBA seemed determined to make an example of them. Peggy E. Gustafson, the Inspector General for the SBA, stated in no uncertain terms, "There is no tolerance for false certifications when asserting eligibility to participate in SBA programs." Accordingly, any business seeking to participate in an SBA program should make certain they meet each eligibility requirement before accepting funds or certifying compliance.

Read more about government contracts on www.bassberrygovcon.com.


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