PCAOB Proves It Has Teeth
November 29, 2004
While some companies are unfamiliar with the Public Company Accounting Oversight Board (PCAOB), it has recently been making its presence known. PCAOB is a private-sector nonprofit corporation created by the Sarbanes-Oxley Act of 2002 (SOX), whose stated purpose is to "oversee the audit of public companies that are subject to the securities laws, and related matters, in order to protect the interests of investors ... " Section 101(a). Although some questioned whether PCAOB would ultimately have any real-world impact on accounting firms and the public issuers they audit, PCAOB has proven that it has the authority, ability and appetite to shape the heightened environment in which companies now operate following passage of SOX and its focus on restoring investor confidence in companies' financial reporting.
The IRS Office of Professional Responsibility
November 29, 2004
As many criminal practitioners are acutely aware, the Internal Revenue Service has recently ramped up compliance and enforcement efforts with budget increases and enhanced resources. A lesser-known component of this revitalized enforcement is the IRS Office of Professional Responsibility (OPR), which is charged with regulating professionals - mostly lawyers and accountants -- who practice before the IRS. OPR enforces ethical rules that govern practice before the Service, commonly known as "Circular 230," and may sanction practitioners who violate those rules. Because OPR matters can interact with the criminal process in many respects, conscientious white-collar practitioners and corporate tax counsel should familiarize themselves with OPR and its power over tax professionals.
Aggregator Deals With Online Music Services
November 29, 2004
In Part One, the author discussed the emergence of content aggregators and began listing the issues to watch out for when contracting with one. Part Two continues that list of the major points of an aggregator agreement.
Asbestos and Mass Tort Claims
November 29, 2004
Asbestos-related bankruptcies are prevalent for various reasons, including expense of traditional tort litigation, lack of either state or federal procedures to handle mass litigation, disputes between insurer and insured, and need for many companies' creditors and shareholders to achieve certainty with large current and contingent asbestos liabilities. Bankruptcy remains an attractive alternative and sometimes last resort because section 524(g) of the Bankruptcy Code provides a mechanism for companies faced with overwhelming asbestos liability to resolve current and future asbestos claims by channeling them to a trust, thereby allowing the effected company to avoid what could result in an inevitable liquidation. One necessary component of this channeling mechanism is section 524(g)(4)(B)(i) of the Bankruptcy Code which requires the Bankruptcy Court appoint "a legal representative for the purpose of protecting the rights of persons that might subsequently assert [asbestos claims] ..." 11 U.S.C. ' 524(g)(4)(B)(i), commonly referred to as a future claimants' representative (FCR).
The Effects of Terminating a Pension Plan in Bankruptcy
November 29, 2004
Oftentimes, one of the largest commitments of a company is its ongoing funding obligations under its pension plan. Contribution obligations to a company-sponsored pension plan will often influence the timing of a financially troubled company's bankruptcy filing. An example of this is the Chapter 11 case of United Air Lines (United) and its affiliates. United viewed its obligations to make significant contributions to its pension plans as somewhat incompatible with its need to create a fiscally strong enterprise so as to effectively compete with low- cost carriers that do not have the same economic burdens.
Bankruptcy Lease Sales: Four Basic Rules to Play By
November 29, 2004
Bankruptcy presents a unique forum for a cash-strapped debtor to sell otherwise unassignable and unprofitable leases to third parties, for immediate cash, and free of liens, certain contract restrictions, certain transaction costs, and future liability. While the bankruptcy arena offers unique opportunities, it poses special risks. The primary players in a bankruptcy lease sale scenario are the debtor, the prospective buyers, and the landlord. A debtor's goal is getting as much value as fast as possible for its creditors. A prospective buyer wants to pay as little as possible, with sufficient due diligence, and have an unassailable sale with whatever lease modifications are necessary for it to remodel and reopen. A landlord's objective is timely lease compliance and a financially and operationally sound buyer. Each party can benefit from following these four basic rules of bankruptcy lease sales.
PCAOB Proves It Has Teeth
November 29, 2004
While some companies are unfamiliar with the Public Company Accounting Oversight Board (PCAOB), PCAOB has recently been making its presence known. PCAOB is a private-sector nonprofit corporation created by the Sarbanes-Oxley Act of 2002 (SOX), whose stated purpose is to "oversee the audit of public companies that are subject to the securities laws, and related matters, in order to protect the interests of investors ... " Section 101(a). Although some questioned whether PCAOB would ultimately have any real-world impact on accounting firms and the public issuers they audit, PCAOB has proven that it has the authority, ability and appetite to shape the heightened environment in which companies now operate following passage of SOX and its focus on restoring investor confidence in companies' financial reporting.
The IRS Office of Professional Responsibility
November 29, 2004
The Internal Revenue Service has recently ramped up compliance and enforcement efforts with budget increases and enhanced resources. A lesser-known component of this revitalized enforcement is the IRS Office of Professional Responsibility (OPR), which is charged with regulating professionals ' mostly lawyers and accountants ' who practice before the IRS. OPR enforces ethical rules that govern practice before the Service, commonly known as "Circular 230," and may sanction practitioners who violate those rules. Because OPR matters can interact with the criminal process in many respects, conscientious white- collar practitioners and corporate tax counsel should familiarize themselves with OPR and its power over tax professionals.
Tell Me My Options: Drafting an Option to Purchase the Property
November 29, 2004
When considering a new lease for a single use property, generally the tenant of the property will want to consider its "exit" strategies at the time of the initial negotiation of the lease. Potential "exit" strategies may include: assignment of the lease, early termination rights and options to purchase the property. The last on the list of these "exit" strategies, options to purchase the property, often creates substantial business issues for the landlord and tenant, as well as drafting issues for their legal representatives. As a result, certain conceptual issues, set forth and discussed below, should be addressed when drafting an option to purchase the property.
