Lexis Practice Advisor® Practice Insights—September 17, 2015

Lexis Practice Advisor® Practice Insights—September 17, 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.  


The Credit Agreement—Setoff
Banking & Finance Insights by Sherry Mitchell

Setoff is a vitally important remedy for lenders dealing with a borrower in default. The right to setoff is a common-law right, as well as a statutory right recognized in all 50 states. Additionally, syndicated credit agreements usually include a contractual right of setoff for deposits and obligations owed to the borrower by the lenders. However, counsel to lenders should try to alter the common-law/statutory right to setoff when negotiating the remedies provisions of a credit agreement. In doing so, lenders should negotiate the setoff provision to be as broad as possible. For example, lenders may be able to negotiate that the credit agreement should allow the lenders to setoff against parties other than the borrower—such as guarantors and affiliates.

Learn more about the credit agreement—setoff:

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.


Proofs of Claim
Bankruptcy Insights by Cody Tray

When drafting a proof of claim, the most important thing to keep in mind is to ensure that your client does not accidentally miss the bar date in the case. Failure to file a proof of claim before the bar date will result in your client being unable to file at all. There are myriad other considerations with respect to proofs of claim as well, including attaching the correct supporting documentation, avoiding any technical defects and filing the proof of claim in the right jurisdiction. All of these issues are key to your client ultimately obtaining its payout in a Chapter 11 case.

Learn more about proofs of claim:

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.


Formation of the Florida Business Corporation

Business Insights by Eric Bourget

There are several advantages to incorporating in Florida. The filing fees paid to the Department of State are relatively low; there needs to be only one director in Florida and that person may also serve as a corporate officer. This makes it easy to form the board of directors and allows for flexibility in the control of the corporation. Florida corporations may perform any lawful business activities unless the articles of incorporation otherwise provide. There are no minimum capital requirements to start a corporation in Florida.

Learn more about formation of the Florida business 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®.


Formation of a California Sole Proprietorship

Business Insights by Eric Bourget

The sole proprietorship is one of the most common types of business entities due to the fact that it is one of the easiest entity types to establish in California. Additional advantages that make the sole proprietorship an attractive entity option include the fact that the owner or sole proprietor has a right to receive all the profits of the business. The principal disadvantage of a sole proprietorship is that unlike many alternative entity offerings that provide varying degrees of limited liability, the formation and operation of a sole proprietorship does not limit the liability of the sole proprietor, who assumes personal liability for the business’s debts and actions. A sole proprietor may wish to consult an insurance agent to discuss how to properly insure the business as well as any personal assets, which would be at risk due to the absence of any limitation of liability.

Learn more about formation of a California sole proprietorship:

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®.


Using Endorsements in Advertising
IP & Technology Insights by Lindsay Bringardner

The use of endorsements and testimonials is common in advertising. Advertisers use endorsements to share the opinions of satisfied consumers, in the hopes of influencing future purchasers. However, advertisers must use particular care with endorsements, which if not used cautiously, could lead to deceptive or unfair advertising practices. To aid advertisers, the Federal Trade Commission provides guidance on proper use of endorsements. Fully understanding this guidance is critical when determining whether use of an endorsement may be deceptive.

Learn more about using endorsements in advertising:

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.


Wage and Hour Class and Collective Actions
Labor & Employment Insights by Carrie Wright

To handle wage and hour class and collective actions, an attorney must know and master elaborate procedural processes that have no parallel in litigations involving individual plaintiffs. For example, attorneys representing employers must understand the complexities of opposing motions to conditionally certify a collective action under section 216(b) of the Fair Labor Standards Act and to certify a class under Rule 23 of the Federal Rules of Civil Procedure.

Learn more about wage and hour class and collective actions:

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.


Reverse Break-Up Fees
M&A Insights by Dana Hamada

In recent years, reverse break-up fees have become a standard feature of M&A deals. If the transaction fails to close due to buyer’s option or failure to obtain financing or necessary approvals, buyer must pay a fee to seller. Unlike with traditional break-up fees, the size of a reverse break-up fee is not limited by fiduciary duties and can run as high as 20% of the deal value.

Learn more about reverse break-up fees:

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.


The Lease Commencement Date in a Retail Leasing Transaction
Real Estate Insights by Richard J. Sobelsohn

The term of a retail lease is typically expressed as a certain period of time commencing on the “commencement date.” In transactions where the landlord agrees to construct leasehold improvements, the commencement date is often the date when the construction is substantially completed, a certificate of occupancy has been obtained (if applicable) and the premises may be used for the purposes permitted under the lease. Landlords should ensure that any delay in substantial completion that is caused by the tenant will not delay the commencement date of the lease.

Learn more about the lease commencement date in a retail leasing transaction:

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®.


Other Regulatory Considerations Facing Hedge Funds
Securities Insights by Ron Llewellyn

The passing of the USA Patriot Act in 2012 and the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 has had a strong impact on hedge funds and their managers. Hedge funds and their counsel should be aware of the numerous regulations that affect their activities, including anti-money laundering and know your customer requirements, and swaps and financial derivatives regulations.

Learn more about other regulatory considerations facing hedge funds:

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.