Lexis Practice Advisor® Practice Insights—June 2015

Lexis Practice Advisor® Practice Insights—June 2015

 LexisNexis partners with leading practitioners from across the country to develop Lexis Practice Advisor® practical guidance for transactional matters. Periodically InfoPro highlights the practical insights developed by these attorneys on specific topics in their area of expertise. These insights can be shared with your attorneys, used in your newsletters and on your intranet.  

Key Documents for Project Finance Lenders
Banking & Finance Insights by Sherry Mitchell

Project finance requires the negotiation and finalization of complex agreements among the project participants, including the project company, equity investors, contractors, subcontractors, off-takers and suppliers. There are two aspects to such documentation—those that consider the financing of the transaction and those that relate to the project design, construction, operation and maintenance of the project itself.

Learn more about key documents for project finance lenders: 

Sherry Mitchell, Esq., head of Lexis Practice Advisor® Banking & Finance, brings eleven years of experience to LexisNexis®, joining the team from Clifford Chance U.S. LLP.

Escrow Agreements

Bankruptcy Insights by Cody Tray

Many complex issues arise regarding escrow agreements during the pendency of a Chapter 11 case. One interesting question, for example, is whether the escrow agreement constitutes an executory contract that the trustee would be allowed to reject pursuant to section 365(a) of the Bankruptcy Code. Another issue that frequently comes up is whether the escrowed funds constitute property of the estate pursuant to section 541(a)(1) of the Bankruptcy Code if one of the parties to the escrow files for bankruptcy. Yet another possibility with escrow agreements during a Chapter 11 case is that property that is deposited in an escrow account before the petition date can be deemed to be a preferential transfer or a fraudulent transfer. As you can see, there are many nuances and complexities that arise with respect to escrow agreements in Chapter 11, and having a comprehensive understanding of these matters is critical in order to provide your clients with sound advice.

Learn more about escrow agreements:

Cody Tray, Esq., head of Lexis Practice Advisor® Financial Restructuring & Bankruptcy, brings nine years of bankruptcy experience to LexisNexis®, including experience at Davis Polk & Wardwell LLP and a clerkship with the Honorable Robert E. Gerber, SDNY Bankruptcy Judge. 

Business Taxes

Business Insights by Eric Bourget

All business entities are subject to some type of taxation at both federal and state levels. The method by which they are taxed and the type of tax that they will be required to pay will vary depending on the state, the type of legal entity and the type of business conducted. Some business entities may be taxed at the entity level (e.g., C-corporations) while others will be taxed at the owner level (e.g., partnerships). Business entities may be subject to numerous taxes including, among others, income or franchise taxes, gross receipt taxes, sales and use taxes, real and personal property taxes, payroll taxes (including unemployment taxes), business license taxes and/or taxes specific to an industry. Navigating the tax landscape is a critical component to adequately representing your client.

Learn more about business taxes:

Eric Bourget, Esq., Lexis Practice Advisor® Team Lead and Group Director of Specialized and Corporate offerings, brings ten years of both private and in-house practice experience to LexisNexis®. 

Regulation D and the Sale of Equity Securities

Business Insights by Eric Bourget

The importance of gaining a thorough understanding of your client’s business objectives, goals and desires cannot be overstated. In fact, certain client information is not only important, it is essential if an attorney is to provide meaningful and effective advice to clients. For example, when working with a client seeking to raise capital through the sale of equity securities, understanding the type of investor a client is targeting is absolutely necessary in order to advise a client about the availability of certain exemptions. Regulation D separates investors into two classes: accredited investors and non-accredited investors. Accredited investors are institutional investors, such as banks and insurance companies, and investors who meet certain net worth or income requirements or who have specified relationships with the issuer. All other investors are non-accredited investors. Regulation D assumes accredited investors are sophisticated or experienced enough to be able to fend for themselves, that they do not need the protections afforded by the disclosure requirements of registration or Regulation D and thus Regulation D imposes fewer rules for sales made solely to accredited investors.

Learn more about Regulation D and the sale of equity securities:

Eric Bourget, Esq., Lexis Practice Advisor® Team Lead and Group Director of Specialized and Corporate offerings, brings ten years of both private and in-house practice experience to LexisNexis®.

Alabama Limited Liability Companies (Statutory Update)

In-House Insights by Eric Bourget

In 2014, Alabama adopted the “Limited Liability Company Law of 2014,” effective January 1, 2015, for all LLCs created on or after that date. LLCs created before January 1, 2015, continue to be governed by the “Limited Liability Company Law” until January 1, 2017. On January 1, 2017, all Alabama LLCs will be governed by the 2014 LLC law. This statutory update is effective on January 1, 2015, for LLCs created on or after that date and on January 1, 2017, for all LLCs regardless of when created. However, LLCs created before January 1, 2015, may elect to be governed by the 2014 LLC law prior to January 1, 2017.

Learn more about Alabama limited liability companies:

Eric Bourget, Esq., Lexis Practice Advisor® Team Lead and Group Director of Specialized and Corporate offerings, brings ten years of both private and in-house practice experience to LexisNexis®. 

Music Licensing
IP & Technology Insights by Lindsay Bringardner

Copyright law protects “original works of authorship” that are “fixed in tangible form,” by conferring certain exclusive rights upon their creators, including the right to reproduce, to prepare derivative works, to distribute copies, to publicly perform and to publicly display the work. In music, copyright is conferred as performing arts or sound recordings. Third parties seeking to use a copyrighted musical work should seek permission through a license from the copyright owner, unless the proposed use qualifies as fair use. There are a number of different types of music licenses frequently used in the industry. The appropriate license will depend on the circumstances.

Learn more about music licensing:

Lindsay Bringardner, Esq., head of Lexis Practice Advisor® Intellectual Property & Technology, brings twelve years of legal experience to LexisNexis®, including experience at Latham & Watkins LLP and Pryor Cashman LLP.

Executive Employment Agreements

Labor & Employment Insights by Carrie Wright

Depending on whether you are representing an employer or an executive, your approach to drafting and negotiating employment agreements will vary. To be the most effective advocate for your client, it is essential to know what provisions are negotiable, what provisions are most desirable, what is common in the marketplace, and what considerations are motivating the other party.

Learn more about executive employment agreements:

Carrie Wright, Esq., head of Lexis Practice Advisor® Labor & Employment, brings nearly fifteen years of legal experience to LexisNexis®, including experience at Epstein Becker & Green, P.C., Paul, Weiss, Rifkind, Wharton & Garrison LLP and Rabinowitz, Boudin, Standard, Krinsky & Lieberman, P.C.

Private Merger Agreement Basics

M&A Insights by Dana Hamada

If your client is involved in a merger of two privately held companies, there are several issues that will come up that do not arise in a public company merger. For instance, because private companies are not subject to ongoing disclosure obligations imposed on public companies by federal securities laws, the representations and warranties will serve as the primary source of information about the target and will therefore be the subject of more extensive attention and negotiation.

Learn more about private merger agreement basics:

Dana Hamada, Esq., head of Lexis Practice Advisor® Mergers & Acquisitions, brings a wealth of legal experience to LexisNexis®, joining the team from Jenner & Block LLP and Gibson, Dunn & Crutcher LLP. 

Parking Agreements in Commercial Leasing Transactions
Real Estate Insights by Richard J. Sobelsohn

In commercial leasing transactions, tenants often enter into a parking agreement with the landlord or a third-party parking facility owner/operator. The key negotiated terms of a parking agreement include the number, location, nature (e.g., reserved or first come, first served) and cost of the parking spaces to be provided. The tenant should ensure that a default under the parking agreement will not constitute a default under the master lease.

Learn more about parking agreements in commercial leasing transactions:

Richard J. Sobelsohn, J.D., GGP, LEED Accredited Professional, Team Lead and Group Director of Lexis Practice Advisor® Financial Practice Area Modules, brings almost sixteen years of both private and in-house practice experience to LexisNexis®. 

Attorney Reporting Standards
Securities Insights by Ron Llewellyn

Pursuant to the Sarbanes-Oxley Act of 2002, the Securities and Exchange Commission (the “SEC”) has adopted “Standards of Professional Reporting Conduct for Attorneys” (the “Standards”) applicable to both outside and in-house legal counsel who represent companies before the SEC. Intended to safeguard companies and their shareholders, attorneys who become aware of “credible evidence of a material violation” of federal securities laws are required to report that evidence “up the ladder” to senior officers of the client, and potentially to a board of independent directors. An attorney subject to the Standards should be aware of his or her reporting obligations, which are broader than those imposed by many state ethical rules.

Learn more about attorney reporting standards:

Ron Llewellyn, Esq., head of Lexis Practice Advisor® Securities & Capital Markets, brings a wealth of expertise to LexisNexis®, including experience at Skadden, Arps, Slate, Meagher & Flom LLP, MasterCard Incorporated and Saks Incorporated.