Investments in Banks: Change in Bank Control ActFinance
The Change in Bank Control Act of 1978 (CBCA), 12 U.S.C. § 1817(j), prohibits a person from acquiring control, directly or indirectly, of an insured depository institution (IDI) unless such person has provided the appropriate federal bank regulatory agency with at least 60 days’ prior written notice and, in that period, the federal bank regulatory agency has not issued a notice disapproving the proposed transaction. The time for a federal bank regulatory agency to act on a proposal under the CBCA may be extended under certain circumstances. The CBCA is an important part of the overall federal legal framework governing acquisitions of banking organizations. Read more.
Tax Issues in Loan WorkoutsBankruptcy
When a company is experiencing extreme financial difficulties, the company can attempt to restructure out of court in a privately negotiated transaction, or workout. The term “workout” is used to signify the efforts of the company’s lenders, bondholders, other creditors, and any other parties-in-interest to participate in the negotiation process and agree upon a solution to the company’s financial problems without filing for Chapter 11 bankruptcy protection. Parties engaged in loan workout negotiations must be aware of potential tax consequences of restructuring indebtedness. For example, the principal tax goals from the debt holder’s point of view typically are minimizing the amount of interest or original issue discount income to be recognized after the restructuring and recognizing a loss on the restructuring. Read more.
Common Law Fraud in the Business ContextGeneral Practice
Common law fraud claims have the potential to tarnish the reputations of company leaders, undermine the financial stability of companies, and force companies and their principals alike to prematurely settle business disputes. This practice note examines the fundamentals of pleading and proving fraud, the nuances of personal liability for fraudulent acts, and some common defenses to business fraud claims. Read more.
Avoiding and Resolving U.S. Supply Chain DisputesCalifornia Business and Commercial
The best way to resolve disputes is to ensure, to the extent possible, that they never occur. This means drafting your client’s contract in a way that will (1) discourage challenge in the event disputes loom, and (2) protect your client’s interests in the event challenges are mounted. These points are obvious, but they pose unique challenges in the supply chain. The secret to resolving supply chain disputes is not found in litigation strategy after a dispute has arisen. Rather, it’s found in making prudent choices when the supply chain is forged and when the contracts pertinent to the chain are drafted. This practice note will discuss measures counsel can take to help avoid and resolve supply chain disputes. Read more.
Product Liability Claims, Defenses, and RemediesCorporate Counsel
Product liability concerns the body of law in which a party injured by a product may recover damages. A plaintiff may recover in any of three ways: in strict liability, if the product is dangerous enough, or if the defendant is the only one that could prevent it from being dangerous; in tort, for negligence if the defendant owed a duty of care for the product and failed to meet that duty; or in contract, if the product failed to fulfill express or implied warranties. While specific strict liability, negligence, and warranty rules for product liability vary by jurisdiction, the defenses to these causes of action and the application of the law are fairly settled and predictable. Read more.
Helping Protect Clients from Cyber ThreatsIntellectual Property & Technology
As cyber criminals become more sophisticated in their efforts to target cyber victims, organizations must also grow their capabilities to successfully combat and defeat them. The evolving nature of internet crime presents a unique set of challenges, as crimes often overlap jurisdictional boundaries and perpetrators can attack from anywhere on the globe. Because of the increasing threats of cyber attacks, cybersecurity—the defense against cyber attacks—is mandatory. Read more.
EEOC Guidance on Employees with Mental Health ConditionsLabor & Employment
In fiscal year 2016, the EEOC resolved nearly 5,000 charges of discrimination based upon mental health conditions and obtained approximately $20 million for individuals with mental health conditions who alleged that they were unlawfully denied employment and reasonable accommodations. As EEOC Chair Jenny R. Yang recently stated, “Many people with common mental health conditions have important protections under the ADA. Employers, job applicants, and employees should know that mental health conditions are no different than physical health conditions under the law.” To assist employees in understanding the rights of individuals with mental health conditions under the provisions of the Americans with Disabilities Act (ADA), the EEOC has issued two resource documents on the subject. Read more.
The Role of the Placement Agent in Private Equity Fund RaiseCorporate and M&A
Broadly speaking, placement agents are similar to underwriters—both are professionals who raise third-party capital for their clients, the underwriter focusing on the public markets and the placement agent on the private. Historically speaking, this is where the similarity ended; for while the underwriter was from the outset a highly regulated, carefully governed entity, the placement agent was in most cases left to his or her own devices on a relatively unregulated and ungoverned playing field. Over the years, and particularly within the last 10 years, this has changed drastically. In the current marketplace, placement agents are being scrutinized by both regulators and lawmakers, and the means through which they raise capital are increasingly defined and regulated. Read more.
Exclusive Agency Agreement – LeaseReal Estate
An exclusive agency agreement – lease is an agreement between a real estate broker and an owner/landlord, whereby the landlord appoints the real estate broker to act as its exclusive agent and grants the real estate broker the right to list the property and solicit tenants. Like the open listing agreement, pursuant to the exclusive agency agreement – lease, the landlord may reserve the right to rent the property itself, and if the landlord procures the tenant for the property, the real estate broker is not entitled to receive any commission. However, similar to the exclusive right to lease agreement (and unlike the open listing agreement), since the real estate broker is acting as the landlord’s listing agent, if the property is leased to a party other than by the landlord, the real estate broker will most likely be entitled to receive a commission. Read more.
Offshore Offerings by U.S. IssuersCapital Markets & Corporate Governance
A U.S. (or “domestic”) issuer may offer and sell securities to investors outside the United States without registration under the Securities Act of 1933 (Securities Act). A U.S. (or domestic) issuer is any issuer of securities, other than a “foreign private issuer” or a foreign government (both as defined in Rule 405 under the Securities Act (17 CFR 230.405)). Issuers wishing to conduct offerings outside the United States without registration under the Securities Act often rely on Regulation S under the Securities Act (Regulation S). Regulation S provides a safe harbor from the registration requirements of Section 5 of the Securities Act (17 USCS §77e) for offerings of securities conducted outside the United States. In addition to avoiding registration under the Securities Act, an offering conducted in compliance with Regulation S is not subject to the liability provisions of the Securities Act applicable to registered offerings. Read more.
Acquisition of a C Corporation versus an S Corporation: Tax ConsequencesFlorida Business and Commercial
Several of the U.S. federal income tax laws that apply to C corporations and S corporations are the same, especially in the area of mergers and acquisitions. A purchaser can acquire both a C corporation and an S corporation via an asset sale, stock sale, or merger, and can structure the acquisition as a taxable sale, a tax-free reorganization under Section 368(a), or a Section 351 transaction. Even the purchase agreements for both a C corporation and an S corporation resemble one another in many ways. Read more.
Drafting and Negotiating Joint Marketing AgreementsCommercial Transactions
Contractual joint ventures can serve many purposes and address a wide range of ventures. This practice note describes the considerations for drafting and negotiating an agreement pursuant to which one or both parties to the agreement will collaborate in order to promote the sale of product and service offerings of the other party. The scope of this practice note covers relationships where one party will independently promote the other party’s products to its customers and potential customers, as well as collaborative efforts by the parties, such as joint solicitations and bidding on requests for proposal (RFPs) from potential customers. This type of contractual joint venture agreement is referred to by a variety of names, including alliance agreement, strategic alliance agreement, co-marketing agreement, joint marketing agreement, etc., depending on the client’s preference and the specific nature of the relationship. For purposes of this practice note, the agreement is referred to as a joint marketing agreement. Read more.