USERRA Explained
June 29, 2005
What Is the Uniformed Services Employment and Reemployment Rights Act of 1994? The Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA)…
IRS Modifies 'Use-It-Or-Lose-It' Rule For Section 125 Cafeteria Plans
June 29, 2005
The Internal Revenue Service has modified the rule prohibiting deferred compensation under a Section 125 cafeteria plan to allow a grace period of up to 2.5 months after the end of the plan year to use the benefits or contributions before those amounts are forfeited under the "use-it-or-lose-it" rule. Notice 2005-42, 2005-23 I.R.B. 1 (May 18, 2005) (the Notice) permits a 2.5- month grace period during which additional expenses can be incurred and which will be reimbursed from contributions made in the plan year preceding the grace period. An employer may adopt a grace period for the current cafeteria plan year by amending the plan before the end of the current plan year.
A Primer on Protecting Investments In Motion-Picture Productions
June 29, 2005
If not for the infusion of private capital, many independent films ' generally films produced outside the traditional studio system ' would probably never have been made. That's because banks are unlikely to loan money for such an uncertain and risky venture ' the success of which is greatly dependent on the fickle nature of audiences. But most independent film investors are either unaware of, or pay little attention to, the realities of the theatrical film market. Given the limited potential for widespread independent film success and other inherent investment risks, an entertainment attorney must be diligent and proactive to fully protect a client's film investment.
Perils Of Unfunded Obligations: 4 Key Questions
June 28, 2005
As summarized by <i>A&FP</i> Board member Bill Brennan of Altman Weil, Inc. an "unfunded retirement program" is essentially a promise to pay partners a retirement benefit in the future from the firm's future profits. About 24% of law firms have an unfunded retirement plan (down from 57% in 1990), according to the <i>2005 Retirement and Withdrawal Survey for Private Law Firms</i>, prepared by Altman Weil, Inc. In about 15 years over 30,000 lawyers will be retiring each year. To the extent these partners must be paid retirement benefits from the then-current profits of their respective law firms, those firms unprepared for this potentially huge financial liability will be at risk, and some may not survive.
Unfunded Plans: A More Upbeat View
June 28, 2005
Readers of the accompanying roundtable discussion may find themselves wondering if there's currently anything good to say about unfunded retirement plan obligations. About the only glimmer of hope was the allusion by one discussant (Bill Brennan) to "rare situations" where such plans might be required. <br>Here to speak up for such exceptional situations is Jeff Stevenson, Managing Director of Chicago Consulting Actuaries
Business Valuation in Divorce
June 27, 2005
The question of how to value private companies in marital dissolution proceedings has been wrestled with for many years. Several valuation methods have been used, although some that are commonly used, and perhaps favored, for other valuation purposes are effectively banned from use in divorce cases due to interpretations of existing case law. Two significant valuation methods, the Guideline Public Company Method (GPC method) and the Discounted Cash Flow Method (DCF method), have been largely excluded from use in divorce cases in some states. This article addresses the GPC method, and when it would be appropriate to use. At a later date, Part Two of this article will address the DCF method.
Executive Compensation
June 27, 2005
It's no secret that for some time now, the Securities and Exchange Commission (SEC), institutional investors and shareholder services have all been dissatisfied with the opaqueness of required executive compensation disclosure in Proxy Statements under Item 402 of Regulation S-K. In fact, the SEC may soon consider revising the executive compensation disclosure rules, at least in respect of certain types of compensation disclosure that are viewed by critics of current disclosure compliance as particularly lacking in transparency and detail.
A Word from the Defense: Is Defending Vioxx a Recipe for Disaster? Take a Careful Look at Who Is Sounding the Alarm
June 14, 2005
The message from our plaintiffs' lawyer colleagues has been steady and direct: "Don't bother defending these cases — you're going to lose and you're going to lose big. Just pay us all lots of money now and save yourself a lot of pain and agony." And what other message would they send? Their goal is to reap the highest reward from the least amount of effort. Litigating every case on every level; financing and staffing hundreds of complex trials, and waiting for final appellate review of every verdict is no way to run a mass tort practice — at least not from the plaintiffs' perspective. Given this author's perspective, it makes sense to examine the options more carefully before deciding that the only way to avoid ruin is to wire massive sums into the trial bar's trust accounts.
New HSR Rules for Transactions Involving Partnerships and LLCs
June 01, 2005
Forget what you know about the Hart-Scott-Rodino Antitrust Improvements Act (HSR) and partnerships. Forget what you know about HSR and LLCs. The rules have changed ' again. The good news is that the rules make more sense, and certain exemptions to the filing requirements have been codified or expanded. The bad news is that a small number of deals that used to slide under the HSR radar may now be caught. More strategically speaking, the rules now provide more opportunities to "choose" whether your next joint venture will be subjected to substantive agency review under the HSR scheme, heightening the value of HSR counselors' advice on structure issues at early planning stages.
Baby-Boomers in Transition
May 31, 2005
Much has been written about the popular culture of the "baby-boom" generation (those born in the post WWII era and now in their 50s-60s), but not much about that age group in law firms and how to take them into account in long-term firm strategy. Part One of this article looked at a model (Model 1) with Partner A ' a full-share equity "baby-boomer" partner (BBP) and rainmaker with a substantial client base. Part Two looks at a BBP who is well-respected, and while not a great business generator, has technical skill.
