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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.
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.