Practice Tip: Evaluating Products Liability Risks at the Corporate Level
January 26, 2005
Conducting a due diligence review has long been standard practice for anyone considering the purchase of a company's stock or assets or a piece of real estate. In some disciplines, such as environmental law, the potential imposition of strict liability for contamination or the threat of third-party lawsuits has resulted in comprehensive environmental due diligence becoming an essential part of any pre-acquisition review. The same is the case with respect to product liability. Given the proliferation of product liability lawsuits, due diligence should no longer be thought of as a tool used exclusively in mergers and acquisitions ("M&A"). Rather, it should become an integral part of the corporate culture.
Significant Changes in Delaware Business Laws
January 26, 2005
Effective July 1, 2004, the Delaware General Assembly adopted significant amendments to the Delaware General Corporation Law, the Delaware Limited Liability Company Act, and the Delaware Revised Uniform Limited Partnership Act as part of its periodic amendments to these Acts for the purpose of keeping them current and maintaining their preeminence among U.S. business laws. <br>This article summarizes the most pertinent of those changes.
A New World for Nonqualified Deferred Compensation Plans
January 26, 2005
Employment lawyers have been inundated in the last few weeks with calls from clients asking how and whether the new American Jobs Creation Act affects various severance pay plans and other deferred compensation plans. If you are still recovering from the recent presidential election, or are preoccupied by the pending elections in Iraq, this one may have slipped by you. The smart thing to do would be to consult your benefits partner, as I did. In this article, I explain this new law in layman's terms and help you respond to those callers clamoring for information about this creatively titled statute.
Second Opinion: New Tax Requirements for Nonqualified Deferred Compensation
January 26, 2005
The American Jobs Creation Act (the "Act") was passed by the House of Representatives on Oct. 7, 2004, and received final approval from the Senate on Oct. 11, 2004. President Bush was expected to sign the Act into law before the end of 2004. The Act enumerates an array of requirements intended to curb perceived abuses in the realm of executive compensation. In many ways, the thrust of the new requirements is to conform a number of aspects of the operation of nonqualified deferred compensation arrangements to those applicable to tax-qualified "401(k)" plans. Consequently, to be tax-effective under the new requirements of the Act, deferred compensation arrangements will need to operate in a fashion more akin to true retirement arrangements.
Dealing with the SEC's 'Up-the-Ladder' Reporting Requirements
January 26, 2005
The provision of Sarbanes-Oxley (SOX) that sets out the gatekeeper role for lawyers, Section 307, requires that lawyers report "up the ladder" (that is, to senior management and, ultimately, to the audit committee or the full board of directors) evidence of certain violations of the securities laws and breaches of fiduciary duties. While the SEC's rules implementing Section 307 became effective in August 2003, there remains much ambiguity in how the SEC plans to enforce them.
State Enforcement: An Interview with Eliot Spitzer
January 26, 2005
The corporate scandals of the past several years have shaken the investing public. In response, state attorneys general like New York's Eliot Spitzer have shown what state regulators can accomplish with an ambitious agenda, talented personnel, and the right statutory tools. With Attorney General Spitzer leading the charge, state attorneys general have played an increasingly active role in matters traditionally handled without state intrusion by the SEC and other federal regulators. This increased state activism has not been free of controversy. In a recent interview, we asked Spitzer about the causes and consequences of that activism and what the future holds. His answers, and the recent activities of his counterparts in other states, confirm that state attorneys general are in no hurry to return to the status quo ante. Like it or not, the states are here to stay.
Practice Tip: Want To Blog?
January 26, 2005
Google describes a Blog as: "a journal that is made available on the Web. The activity of updating this blog is known as blogging and, likewise someone who keeps a blog is known as a blogger!" Typically, blogs are updated daily by the use of software that allows people with little or no technical background to maintain the blog; however, while attorneys are the best at what they do ' <i>ie</i>, the practice of law ' they have no clue when it comes to marketing skills for their firm, or technology and how to effectively design a blog! <br>Well, recently all this has changed ' and for the better, I might add.
Restructuring AMERCO
January 25, 2005
When AMERCO, the parent company of U-Haul International, emerged from bankruptcy protection in March 2004, it secured an unusual place in history -- exiting Chapter 11 with a global capital restructuring that resulted in zero dilution in shareholder value. Alvarez & Marsal, which was retained as the company's financial advisors, executed one of the most successful restructurings on record by developing and implementing a complex and consensual plan that required significant negotiations with a diverse group of debt and equity holders. By the end of the swift process, AMERCO's common equity value had increased by over 350% and nearly $300 million in value was restored to the investments of preferred stock and unsecured debt holders.
An Analysis of the World Trade Center 'Two Occurrences' Decision
January 24, 2005
On Dec. 6, 2004, a New York federal jury determined that the 9/11 attacks on the World Trade Center involved two "occurrences" under policies issued to leaseholder Larry Silverstein. As a result, Silverstein could get up to $1.1 billion more than if the attacks had constituted a single occurrence.
Equipment Leasing as a Current Financing Strategy for Middle Market Companies
January 03, 2005
Equipment leasing remains a viable tool for middle market companies in today's environment. The Equipment Leasing Association of America (the "ELA") estimates that of the $668 billion spent by U.S. business on productive assets in 2003, $208 billion, or 31.1%, was acquired through leasing, and for 2004 the ELA projects that leasing activity will grow to $218 billion, or 30.7 cents of every dollar American businesses will invest in equipment.
