FCPA Compliance Training: Clarity Needed
August 30, 2007
Just as corruption saps the entire GDP of many countries, it can destroy the profitability of a firm's overseas (or, for that matter, overall) business. My 'Confronting Corrupt Practices' article in <i>A&FP</i>'s June 2007 edition surveyed some aspects of anticorruption training that law firms should consider.
The High Cost of FCPA Violations
August 30, 2007
Earlier this year, Baker Hughes Inc. ascended to the top of an exclusive and prominent list, but it is one on which few companies would want to be mentioned. On April 26, 2007, the Texas-based oil field products and services company announced that it was settling a federal probe alleging that it violated the Foreign Corrupt Practices Act ('FCPA'), and that it would pay fines and penalties in excess of $44 million ' the largest combined punishment under that law. It was truly one for the record books ' at least for the time being.
Does Giving Tax Advice Make You a 'Preparer'?
August 30, 2007
Signed by President Bush on May 25, The Small Business and Work Opportunity Tax Act of 2007 ('Small Business Act') includes new preparer penalty provisions that range up to 50% of the fee for preparing the tax return. Lawyers who give tax advice need to know that this legislation had a 'surprise' in it regarding whom the IRS considers a tax return preparer.
Evolution of a Law Firm CFO
August 30, 2007
Twenty-two years ago, I received a call from a headhunter looking to hire a Controller for Kirkpatrick, Lockhart, Johnson & Hutchison, a midsize and growing law firm with about 150 lawyers.
Equipment Finance in Canada: Changes to the Income Tax Act May Have an Impact
August 30, 2007
Canada's conservative minority government recently passed its 2007 Financial Budget (the 'Budget'), which will likely impact the equipment finance industry and particularly cross-border (U.S./Canada) transactions. Central to the Budget was the proposal to eliminate withholding tax on interest payments on loan transactions. As will be discussed below, the likely impact will be that traditional cross-border transactions will be restructured to: 1) provide for quicker repayment of the principal portion of the loan, and 2) provide a means for a greater number of less internationally focused commercial banks and finance companies to undertake cross-border transactions which, prior to the enactment of the new legislation, would have be seen as too complex. This second impact may cause a more competitive environment and further add liquidity to any already liquid market. It is not clear, however, that the proposed legislation will have a significant impact on larger transactions or the activities of internationally focused lenders. While there will likely be enhanced competition for smaller straightforward transactions than currently exists, the market for complex large transactions, while restructured, will have the same level of competition as currently exists.
An Overview of FIN 48: Accounting for Uncertain Income Tax Positions
August 29, 2007
In an effort to increase comparability and consistency in how companies report income tax positions on financial statements, the Financial Accounting Standards Board ('FASB') issued on July 13, 2006 FASB Interpretation Number 48 ('FIN 48'), <i>Accounting for Uncertainty in Income Taxes.</i> FIN 48 changes the way companies must account for uncertain tax positions taken on federal, state and local, and international income tax returns for financial reporting purposes. Despite the requests for delay by numerous companies and trade and lobbying groups, the provisions of FIN 48 became effective for fiscal years beginning on or after Dec. 15, 2006. The provisions of FIN 48 apply broadly to all companies that issue financial statements in accordance with generally accepted accounting principles ('GAAP') and that are potentially subject to federal, state and local, or foreign income taxes.
Today's Approach to Distressed Situations: A Lessor's Guide
August 29, 2007
Back in 1985, one of us contributed to an industry publication an article titled <i>Strategies for Recovery in Lessee Bankruptcy</i>. Twenty-two years later, the landscape of bankruptcy law and the leasing industry have changed dramatically, and issues and problems faced by the equipment lessor today have much different priorities. As the equipment leasing community contemplates the landscape today, some new approaches and decision drivers face the leasing executive when his lessee files Chapter 11, or threatens to do so.
Why Your Financial Specialist Should Be Independent
August 29, 2007
Over the years, matrimonial lawyers everywhere have increasingly embraced the concept of working with experienced, credentialed professionals who specialize in the financial aspects of divorce. Originally, most of these specialists were Certified Public Accountants and the work was mainly of a forensic nature. Recently, however, we have seen an increase in the involvement of professionals whose background is in the financial planning arena. Today, among other tasks, the planner is often retained to examine the longer-term impact of settlements and answer the client's question: 'Will I be okay financially?'
Business Development Will Dominate Marketing
August 29, 2007
In the real business world, marketing and business development functions co-exist ' albeit uncomfortably at times ' in a more or less equitable partnership that sees them working toward common objectives but living on separate islands. In the somewhat more surreal world of BigLaw business, the functions tend to live together but, all too often work at cross-purposes. And therein lies a budding tale. Who is best suited to lead the firm, at least until the next, next thing comes along? The answer seems clear. There's a new sheriff in town. Its name is business development.
Pensions and Restitution
August 29, 2007
Being a white-collar defendant is very expensive. Just the cost of putting up a serious defense is more than most business executives can bear, and whether companies must pay their ex-employees' legal fees has been hotly litigated in the much discussed KPMG tax shelter case in the Southern District of New York. Meanwhile, an important <i>en banc</i> decision of the Ninth Circuit addresses the financial impact on individuals at the other end of the criminal process: whether pension trust funds may be reached to satisfy a criminal judgment of restitution.
