Lexis Practice Advisor® Practice Insights—November 5, 2015

Lexis Practice Advisor® Practice Insights—November 5, 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.  

Cross-Border Lending
Banking & Finance Insights by Sherry Mitchell

Lenders are increasingly interested in pursuing cross-border opportunities. Structuring these transactions can be complex from both a business and legal point of view. Banking and finance lawyers whose practice includes cross-border transactions need to understand these challenges. They must first understand the status of the loan markets in various jurisdictions and determine the best way to structure the transaction within the legal framework of those jurisdictions.

Learn more about cross-border lending:

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.

Claims to Enforce Corporate Governance Obligations
Bankruptcy Insights by Cody Tray

When a corporation begins to experience financial difficulties, creditors and shareholders usually attempt to look frantically for any means of recovery, which may result in the assertions of claims that managers and other parties have breached duties owing to the corporation itself. Methods of attempting to enforce corporate governance obligations include shareholders’ derivative actions, assertion of direct claims, and assertion of claims against corporate fiduciaries. Having an understanding of all of these different types of actions is critical to helping your client with corporate governance issues in bankruptcy.

Learn more about claims to enforce corporate governance obligations:

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.

Franchising Under Federal Franchising Laws

Business Insights by Eric Bourget

A franchise relationship is essentially an agreement between two legally independent parties, the franchisor and franchisee. In exchange for payment of a franchise fee, the franchise relationship gives the franchisee the right to carry on a business using the franchisor’s trademark, trade name, or operating system or methods. A franchise as defined under The Federal Trade Commission (FTC) Franchise Rule, 16 C.F.R. part 436, is a continuing commercial relationship that involves trademark usage, “significant control or assistance” by the franchisor, and a required payment on the part of the franchisee to the franchisor. The disclosure and contract requirements that apply to the franchise relationship are stipulated in the Franchise Rule.

Learn more about franchising under federal franchising laws:

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®.

Formation of a California Social Purpose Corporation

Business Insights by Eric Bourget

The Social Purpose Corporation (SPC) is a new type of business entity, which was formally known as a Flexible Purpose Corporation. An SPC is a hybrid corporate entity that allows a business entity to encompass and pursue both economic profit and social welfare objectives. The greatest advantage offered by the SPC entity type is derived from its name; i.e., the SPC entity type allows for flexibility when defining the entity’s purposes and objectives. The flexibility afforded to an SPC allows it to engage in the simultaneous pursuit of for-profit and non-profit objectives and goals. However, the selection and operation of an SPC entity obligates the entity to undertake and perform certain additional duties and responsibilities considered disadvantageous by many.

Learn more about the formation of a California Social Purpose Corporation:

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®.

Mergers and Acquisitions in the U.S. Life Sciences Industry
IP & Technology Insights by Lindsay Bringardner

Deal activity in the U.S. life sciences sector has been on the rise in recent years. One of the most significant factors driving this growth is increased competition from companies making generic and biosimilar products, and the resulting pressure for midsize and larger pharmaceutical and biotech companies to secure their revenue and growth prospects in the face of this rising threat. Other key factors driving life sciences M&A deal activity include the evolving regulatory landscape and large companies continuing focus on their core businesses, leading to divestitures of non-core assets and businesses. When doing a deal involving the sale of a life sciences business or asset, there are a variety of special issues that you should consider with respect to due diligence, structuring the transaction, negotiating the purchase agreement and transition agreements.

Learn more about open source:

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.

Drafting Vacation Policies
Labor & Employment Insights by Carrie Wright

Federal and state laws do not require that employers provide employees with paid vacation time. Nevertheless, many employers recognize the importance of giving their workforce time away from work to rest, relax and pursue extracurricular activities and, accordingly, offer paid vacation time. Such employers should promulgate vacation policies that specify the classifications of employees who will enjoy this benefit; detail how vacation time will be accrued and counted; state any restrictions that apply to use of vacation time; outline procedures for requesting vacation; address whether unused time rolls over from period to period; and inform employees whether unused accrued vacation time is paid out upon termination. State laws may constrict an employee’s choices, so it is important to understand what limitations state law may impose.

Learn more about vacation policies and applicable state laws:

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.

Drafting Separation and Distribution Agreements in Spin-Offs
M&A Insights by Dana Hamada

In a spin-off transaction, a parent company divests of a subsidiary by distributing the subsidiary’s shares to the parent’s stockholders as a pro rata dividend. The separation and distribution agreement is the document that actually sets forth the terms and conditions pursuant to which the transaction will be executed. These agreement address: (i) the allocation of assets and liabilities between the parent and the spin-off subsidiary; (ii) the distribution of the spin-off subsidiary’s shares; and (iii) any ongoing obligations between the parent and the subsidiary.

Learn more about drafting separation and distribution agreements in spin-offs:

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.

Seller Disclosures for Residential Real Estate Purchase and Sale Transactions
Real Estate Insights by Richard J. Sobelsohn

Many states have statutory disclosure requirements whereby sellers of residential real estate must disclose certain facts to prospective purchasers. Common disclosure topics include the condition of a home’s major systems, structural issues, hazardous substances, title defects, and health and safety matters. The content and form of mandatory seller disclosures varies from state to state, and certain types of transfers may be exempt.

Learn more about seller disclosures and residential real estate purchase and sale 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®.

Special Purpose Acquisition Company Offerings and Transactions
Securities Insights by Ron Llewellyn

A special purpose acquisition company, or SPAC, is a corporation formed and initially funded by a small group of investors, or by an institutional sponsor, for the purpose of conducting an IPO and using such IPO proceeds to acquire an operating business. Counsel should be aware of the SPAC IPO process, features that are typical to an SPAC, and reporting and compliance obligations for an SPAC post-IPO.

Learn more about special purpose acquisition company offerings and transactions:

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.