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When Assets Are 'Sold' to Special Purpose Entities
The Seventh Circuit's decision in Paloian v. LaSalle Bank, N.A. (In re Doctors Hospital of Hyde Park Inc.) (“Paloian“), 619 F.3d 688 (7th Cir. 2010) sheds some new and perhaps disturbing light on the use of special purpose entity (“SPE”) structures in corporate finance and also has implications for attorneys who deliver opinions to support transactions involving SPEs.
SPE structures have long been useful to companies seeking to alter the composition of their balance sheet. When properly used, SPE structures are a valuable tool of modern corporate finance, permitting companies to obtain needed liquidity by monetizing otherwise illiquid assets on their balance sheet, particularly receivables. Unfortunately, SPE structures can also facilitate “aggressive” accounting by companies that use them to conceal debts by shifting them to off-balance-sheet SPEs. SPE structures played a key role in the financial maneuvering by Enron and others that ultimately unraveled in their highly publicized collapses.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Compliance Officers: Recent Regulatory Guidance and Enforcement Actions and Mitigating the Risk of Personal Liability
This article explores legal developments over the past year that may impact compliance officer personal liability.