Lexis Practice Advisor® Practice Insights—January 6, 2016

Lexis Practice Advisor® Practice Insights—January 6, 2016

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.  

Post-Closing Matters
Banking & Finance Insights by Sherry Mitchell

As any practitioner knows, once a deal closes, the work is not done. Counsel must be cognizant of an array of items that will need to be handled on a post-closing basis. If all of the conditions precedent are not satisfied in time for the closing, the secured parties may agree that certain conditions can be satisfied within a sp ecified period of time post-closing. Original possessory collateral must be delivered to the secured party. Closing binders should be made. And, further down the road, counsel may have to deal with requests to amend the credit agreement, release a guarantor or specific collateral or replace an agent.

Learn more about post-closing matters: 

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.

New York Approvals for M&A Transactions
Business/In-House Insights by Eric Bourget

Generally speaking, a New York corporation may be a party to a merger only if the merger has been approved by both the corporation’s board of directors and its shareholders. The first step in the approval process is for the merger to be approved by the board of directors of each corporation via the adoption of a plan of merger or consolidation. After the plan of merger has been adopted by the board of directors, notice of a shareholders’ meeting to vote on the matter must be provided to all of the corporation’s shareholders (not just those entitled to vote on the transaction). A copy of the plan of merger (or an outline of the material features of the plan) must be included with such notice. Approval of the sale requires the affirmative vote of (a) two-thirds of the outstanding shares entitled to vote or (b) a majority of the shares entitled to vote.

Learn more about the New York approvals for M&A transactions:

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®.

Professional Compensation
Bankruptcy Insights by Cody Tray

Much to the chagrin of most bankruptcy lawyers, payment of professional fees and expenses in a bankruptcy case involves first filing an extensive fee application and seeking approval of such fees and expenses by the bankruptcy court. Although a bankruptcy professional can look for guidance to sections 330 and 331 of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, local rules and the new United States Trustee Guidelines, there is not one bright line test that is used across the board to determine the reasonableness of fees and expenses. Accordingly, bankruptcy professionals must have a full understanding of the various approaches that bankruptcy courts use in assessing fees, including the enumerated factors in section 330, the lodestar method, the Johnson factors and the hybrid approach.

Learn more about professional compensation:

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.

Drafting an LLC Operating Agreement

Business Insights by Eric Bourget

A limited liability company is an unincorporated entity that offers liability protection to its owners. Some courts have referred to it as a hybrid of a corporation and a partnership. The ownership interests in a limited liability company are held by the members. The limited liability company can be managed by all the members, like a general partnership, or by managers, like a limited partnership. The members are required to adopt an operating agreement, which sets forth, among other things, the rights and obligations of the members and how the company will be operated. The profits and losses of a limited liability company are distributed to its members according to the operating agreement.

Learn more about drafting an LLC operating agreement:

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®.

Drafting a California Will

Business Insights by Eric Bourget

A will is an instrument that permits a person (the “testator”) to decide how his estate will be managed and distributed after his death. The testator selects an executor, also called a personal representative, who will collect and manage assets, pay debts and expenses and finally distribute assets to the beneficiaries. Beneficiaries may be family members, friends or charitable organizations who receive specific gifts (e.g., jewelry, a sum of money) or a percentage of the remaining estate. However, a will controls disposition only when assets were held in the testator’s name alone. If the testator was married or had a registered domestic partner, the will is limited to the testator’s half of the community property. A will cannot override the right of survivorship applicable to joint tenancies or “community property with right of survivorship.”

Learn more about drafting a California will:

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®.

Drafting an LLC Operating Agreement

In-House Insights by Eric Bourget

A limited liability company is an unincorporated entity that offers liability protection to its owners. Some courts have referred to it as a hybrid of a corporation and a partnership. The ownership interests in a limited liability company are held by the members. The limited liability company can be managed by all the members, like a general partnership, or by managers, like a limited partnership. The members are required to adopt an operating agreement, which sets forth, among other things, the rights and obligations of the members and how the company will be operated. The profits and losses of a limited liability company are distributed to its members according to the operating agreement.

Learn more about drafting an LLC operating agreement:

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®.

The Trademark Application Filing and Opposition Process in Canada
IP & Technology Insights by Lindsay Bringardner

With the current global economy, clients must properly protect their intellectual property abroad. It is imperative that you understand the laws of each individual country in which your client seeks protection. Given its close proximity to the U.S., and often a shared market, many companies seek to protect their trademarks in Canada. While similar to U.S. law, there are key distinctions to the trademark application and opposition process in Canada.

Learn more about the trademark application filing and opposition process in Canada:

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.

Screening and Hiring
Labor & Employment Insights by Carrie Wright

To avoid legal liability for their screening and hiring practices, employers must ensure that their hiring policies and practices do not discriminate on the basis of any protected categories—including, among others, age, gender, race, national origin, religion and disability—even if the discrimination is unintentional. This means not just reciting that the company is an equal opportunity employer, but training and monitoring supervisors and human resources personnel and consistently updating screening and hiring policies.

Learn more about screening and hiring:

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.

Equity Carve-Outs
M&A Insights by Dana Hamada

In an equity carve-out transaction, some or all of the shares of a subsidiary company are sold to the public in a registered offering. This type of deal serves the same primary purpose as any other form of divestiture: it separates a subsidiary business from the parent company. This may help the parent realize value in its subsidiary that might not be realized under a larger company structure, perhaps through allowing for distinct and targeted investment opportunities for each company, providing the subsidiary with equity to use in acquisitions, allowing each company to focus on its core business, and so forth.

Learn more about equity carve-outs:

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.

Income Tax Withholding Requirements for Real Estate Purchase and Sale Transactions
Real Estate Insights by Richard J. Sobelsohn

Federal and state statutes mandate income tax withholding in connection with certain real estate purchase and sale transactions. For example, the Foreign Investment of Real Property Tax Act of 1980 (FIRPTA) requires federal income tax withholding on transfers of a United States real property interest by a foreign person, and many states require withholding of state income tax on transfers of real property by non-residents. Practitioners should consult with local counsel and title insurance companies to ensure the requisite withholdings are made and reported using the proper forms.

Learn more about income tax withholding requirements for 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®.

Preparing Earnings Releases

Securities Insights by Ron Llewellyn

Many public companies choose to issue earnings releases to provide limited financial and operational metrics to their shareholders. Counsel assisting with the furnishing of earnings releases should be aware of the typical content found in earnings releases, the applicable regulatory framework and internal controls that companies should implement.

Learn more about preparing earnings releases:

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.