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LILOs and SILOs: The Final Chapter?
In what may be the final chapter in the years of litigation over tax-exempt entity leasing transactions, the Circuit Court of Appeals affirmed the Federal Claims Court's decision disallowing Wells Fargo's deductions from SILO transactions. Wells Fargo & Company v. United States, Fed. Cir. 2010-5108 (April 15, 2011). For your recollection, in a sale-in, lease-out (“SILO”) transaction the tax-exempt entity sells an asset it owns to the taxpayer. The taxpayer leases the asset back to the tax-exempt entity for a term less than the asset's remaining useful life. The lease is a net lease, meaning that the tax-exempt entity is responsible for all expenses normally associated with ownership of the asset. (In lieu of a sale, the tax-exempt entity may retain legal title to the asset and sell the property (for tax purposes) via a head lease for a term extending beyond the remaining useful life of the asset.)
The taxpayer funds the asset purchase price in part with its own funds and in part with a nonrecourse loan. The lessee places 95% of the proceeds in two cash collateral accounts, one for the taxpayer's equity portion and one for the debt portion. Each account generates investment income and sufficient cash to fund the lessee's rent payment obligations, which fund the lessor's debt service on the debt. The payment obligations are economically “defeased” ' dedicated funds are set aside for the purpose of paying the obligations.
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.
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.
How AI Has Affected PR
When we consider how the use of AI affects legal PR and communications, we have to look at it as an industrywide global phenomenon. A recent online conference provided an overview of the latest AI trends in public relations, and specifically, the impact of AI on communications. Here are some of the key points and takeaways from several of the speakers, who provided current best practices, tips, concerns and case studies.
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.