It's Back To Playing By The Rules: Sec. 412(i) Retirement Plans
June 01, 2004
A common expression in the tax arena is the "red flag" ' the concern that a tax deduction is so large, or the tax benefits of a transaction are so favorable to the taxpayer, that it is comparable to waving a red flag at the IRS, inviting scrutiny and possible adverse consequences. Over the past few years, certain retirement plans created under the provisions of Section 412(i) of the Internal Revenue Code have been designed using methods that are questionable, at best, in terms of compliance with the tax code and regulations. This problem became so pervasive that it was widely anticipated the IRS would respond to the red flags, and put an end to the abuses. Last month, it happened. IRS guidance and proposed regulations were enacted to try to get everyone to play by the rules. Not that the rules are bad; a 412(i) plan could still be right for you.
NJ Upholds Non-Competition Agreement
June 01, 2004
As previously reported in <i>LFPBR</i>, several states have upheld the forfeiture of non-qualified retirement benefits otherwise payable to a partner choosing to compete with the firm. In <i>Borteck v. Riker, Danzig, Scherer, Hyland, and Perretti, LLP</i> (A-31-03) (April 5, 2004), the New Jersey Supreme Court unanimously concluded that the retirement provisions of a law firm's partnership agreement did not violate N.J. Rules of Professional Conduct (RPC) 5.6, and held the competing partner to lose his retirement benefits. The case provides further guidance for firms in designing, drafting and defending enforceable forfeiture-for-competition agreements.
Know Your Franchise Agreement: The Third-Party Beneficiary Clause
June 01, 2004
<i>This article begins a feature that periodically will examine a specific section or clause in the Uniform Franchise Offering Circular (UFOC).</i> In a UFOC, a typical third-party beneficiary clause reads like this: "No third-party beneficiaries. Nothing in this Agreement is intended, nor will be deemed, to confer rights or remedies upon any person or legal entity not a party to this Agreement."
In The Marketplace
June 01, 2004
Highlights of the latest equipment leasing news from around the country.
Best Practices and the Leasing Industry
June 01, 2004
Best practices" seem to be on the tips of everyone's tongues these days. At the recent ELA Executive Roundtable Conference, the concept of applying best practices to leasing companies was a key focus of discussion. This trend is a clear endorsement of continually benchmarking performance and learning from others what works and what doesn't.
Is It a True Lease or a Loan?
June 01, 2004
The first part of this article, published in last month's issue, addressed the importance of the distinction between true leases and loans and began a detailed analysis of the rules that courts use for state law and bankruptcy purposes to determine the category in which a given transaction belongs. <br>As outlined in part one of this article, courts utilize the Two-Part Test provided in §1-201(37) of the Uniform Commercial Code, and any transaction that satisfies that Two-Part Test creates a security interest as a matter of law. The first prong of the test is satisfied if the lessee does not have the option of terminating the lease early or if any such early termination option requires the lessee to pay the lessor a significant sum. The second prong, which addresses the issues that are most often litigated, is discussed below.
On-Site Sales: What Lessor's Counsel Should Know
June 01, 2004
When equipment lessors evaluate the risks of underwriting lease transactions for manufacturing equipment, one of the primary considerations in the credit decision is the resale value of the equipment in the event of default. In preparing for this risk, a key component of an underwriter's evaluation must be how to access and market the equipment in the event of a default. Therefore, it is critical to look at every transaction from the perspective of how much money a piece of equipment will bring in a sale, if there is an established market for the particular equipment, and also, how and where the equipment can best be marketed and sold if a liquidation is necessary. An often-overlooked and significant factor in this analysis is whether the lessor will have unfettered access to remove the equipment to sell, refurbish, and/or prepare for liquidation at the location where it has been used.
FTC Addresses Earnings Claims in Internet Advertising
June 01, 2004
As franchisors find new ways to reach out to prospective franchisees, there are inevitably questions about how franchise laws ' written long before electronic media such as the Internet and e-mail were contemplated ' might apply. Recently, the Federal Trade Commission's (FTC) staff provided some guidance to help franchisors understand how the FTC Franchise Rule applies with respect to earnings claims made in the context of Internet advertising.
Heard it in the Halls: Highlights of IFA's Legal Symposium
June 01, 2004
Last month's International Franchise Association (IFA) Legal Symposium brought together many of the world's leading franchise attorneys and in-house counsel for large franchisors. The items below are brief accounts of some of the presentations and discussions.
