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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.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
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.
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.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.
Protecting Innovation in the Cyber World from Patent Trolls
With trillions of dollars to keep watch over, the last thing we need is the distraction of costly litigation brought on by patent assertion entities (PAEs or "patent trolls"), companies that don't make any products but instead seek royalties by asserting their patents against those who do make products.