November 18, 2016
This analysis provides insight into some of the most pertinent business issues President-elect Trump will likely address during his term, and what the election could mean for your industry and your business.
May 17, 2016
Ellen Canan Grady and Richard J. Busis discuss the SEC's Compliance and Disclosure Interpretations (C&DIs), which provide interpretive guidance on Regulation Crowdfunding.
July 22, 2015
In a summary analysis of the Illinois Supreme Court’s ruling invalidating Public Act 98-599, Mark Vacha (Public & Project Finance) summarizes and highlights some of the significant points of the Supreme Court of Illinois' decision filed on May 8, 2015 which struck down pension reform legislation for certain state level plans in Illinois.
July 03, 2015
Ellen Canan Grady discusses how general counsels are beginning to understand the long-term ramifications of cyber attacks, and how in addition to this, they must also grapple with an evolving regulatory and legislative landscape.
July 01, 2015
Mark Vacha discusses how state and local government officials have enjoyed qualified immunity from civil liability and how this may be affected from recent municipal securities litigation in an article titled "Qualified Immunity Defense May Protect Municipal Officials from Securities Litigation by Private Investors But Not The Securities and Exchange Commission."
March 16, 2015
Ellen Canan Grady, a member in the firm's corporate group, recently published an article in Corporate Counsel on the dilemma that public companies face in deciding how to respond to a shareholder's "proxy access" proposal.
February 11, 2015
On February 9, 2015, the Securities and Exchange Commission (SEC) proposed for comment new corporate disclosure rules regarding public company issuer hedging policies applicable to directors, officers and employees. On January 16, 2015, SEC Chair White directed the SEC Division of Corporation Finance to review the proper scope and application of Rule 14a-8(i)(9), a provision that permits a public company issuer to exclude an otherwise qualified shareholder proposal from its proxy materials if the subject matter of the proposal directly “conflicts” with a company’s own proposal.
February 10, 2015
Barry M. Klayman and Mark E. Felger, members in the firm's Wilmington office, published an article in the Delaware Business Court Insider titled "Fiduciary Duty Claims Held Non-core and Subject to Jury Trial." The article discusses whether or not claims for breach of fiduciary duty are aiding and abetting breach of fiduciary duty against an officer and director of a debtor core proceedings, and whether those claims are subject to trial by jury.
November 12, 2014
Barry M. Klayman and Mark E. Felger, members in the firm's Wilmington office, published an article in the Delaware Business Court Insider titled, '''Ministerial Acts' Exception Applies to Corrected Judgment Order.'' This article discusses the Delaware Superior Court's recent decision in Universal Music Investments v. Exigen Ltd., C.A. No. N13C-10-300-FSS (Del. Super. Aug. 25, 2014), which explores the effect of the automatic bankruptcy stay on an order correcting a mistake in a prior order. The decision also discussed whether a guarantor is in privity with the primary obligor for res judicata purposes.
November 01, 2014
Mark Vacha discusses bond requirements that can help your township communicate
more effectively with counsel and enhance compliance after bonds to finance an upcoming project are issued.
October 08, 2014
What constitutes constitutionally adequate notice to a debtor's unknown creditors of the deadline for filing proofs of claim? In White v. Jacobs (In re New Century TRS Holdings), Civ. No. 13-1719-SLR (D. Del. Aug. 19, 2014), the U.S. District Court for the District of Delaware concluded that the adequacy of the notice provided to unknown creditors had not been meaningfully explored by the bankruptcy court and likely was not reasonably calculated to apprise them of the bar date.
September 10, 2014
The Worker Adjustment and Retraining Notification Act (WARN Act) was enacted in 1988 to allow workers to adjust to the prospective loss of employment from a plant closing or mass layoff. It requires employers to give affected employees 60 days' advance notice of such events. Employers that violate the WARN Act's notice requirements are liable to the affected workers for each day that notice is not provided up to 60 days. Often, however, plant closings and mass layoffs presage an employer's demise, so workers look to affiliates of the employer, such as a solvent parent or lender, to show that they acted as a "single employer" in making the termination decision and share liability for the WARN Act violation.
July 15, 2014
In part I of this article, we discussed how in Quantum Technology Partners IV L.P. v. Ploom, C.A. No. 9054-ML (Del. Ch. May 14, 2014) (Master's Final Report), Master in Chancery Abigail M. LeGrow faced the "unwelcome task" of finding an appropriate middle ground between the extreme positions taken by the parties in a Section 220 action concerning what terms should be included in a confidentiality order in connection with the inspection of corporate books and records where inspection was sought in part to assist the stockholder in marketing its shares.
July 09, 2014
A minority stockholder in a privately held corporation makes a demand to inspect the books and records of the corporation under Section 220 of the Delaware General Corporation Law. The stockholder states that the purpose of the inspection is to value his shares and to explore a possible sale of the stock. The corporation offers to provide some, but not all, of the requested documents.
June 17, 2014
Cozen O'Connor's Energy Environmental & Public Utility Group convenes a symposium of national experts in Philadelphia to discuss emerging issues surrounding catastrophic releases of hazardous materials.
June 11, 2014
Harry Pontone, a former officer and director of The York Group and its subsidiary, Milso Industries, was a defendant in an action brought by the two companies and their parent company in federal court in Pennsylvania. The Pennsylvania plaintiffs alleged that Pontone, while still employed by York and Milso, participated in a wrongful scheme to induce several of their employees and many of their customers to switch to their main competitor. They alleged that these actions violated Pontone's employment agreement, which included express noncompete and nonsolicitation covenants, as well as the common law. The Pennsylvania plaintiffs asserted numerous claims against Pontone, including claims for breach of contract, breach of fiduciary duty, tortious interference with contractual relations, unfair competition, and unjust enrichment.
May 21, 2014
In an article published in The Legal Intelligencer, Hayes Hunt and Arthur Fritzinger, members of Cozen O'Connor's Commercial Litigation Department, discuss Allegheny County Court of Common Pleas Senior Judge R. Stanton Wettick Jr.'s recent ruling in Red Vision Systems v. National Real Estate Information Services, No. 14-0411 (Comm. Pls. Feb. 26, 2014), that the attorney-client privilege does not apply to corporations no longer in business has garnered significant attention, including an appeal and the filing of amicus briefing by the Association of Corporate Counsel.
May 14, 2014
Can a party that retains its own counsel be liable to pay a fee to another party's counsel or to class counsel? The answer, according to the recent Court of Chancery opinion in Smith, Katzenstein & Jenkins v. Fidelity Management & Research, C.A. No. 8066-VCL (Del. Ch. April 16, 2014), is a resounding yes. The court rejected the defendants' "own counsel" defense in an action to recover attorney fees and costs for benefits conferred as a result of the plaintiffs' prosecution and settlement of a class action as contrary to longstanding Delaware precedent dealing with shared causation in the award of fees and expenses when an attorney creates a common fund for, or confers a common benefit upon, a readily ascertainable group.
April 28, 2014
In an article titled, “The Freedom Industries’ Chemical Spill – It Didn’t Stay in West Virginia” published in the April issue of The Authority magazine, Michael Klein (Energy, Environmental and Public Utilities, Washington, DC and Harrisburg, PA) discusses the ramifications of the recent Freedom Industries chemical spill and encourages public water suppliers to prepare for such an event by updating their vulnerability assessments, emergency response plans, and employee training programs.
April 23, 2014
The doctrines of champerty and maintenance live on in Delaware, at least for the time being. In Charge Injection Technologies v. E.I. du Pont de Nemours & Co., C.A. No. N07C-12-134-JRJ (Del. Super., Feb. 27, 2014), interlocutory appeal refused, No. 160, 2014 (Del. Apr. 7, 2014), the Superior Court considered whether the doctrines of champerty and maintenance are dead in Delaware and held that, absent a ruling to that effect from the Delaware Supreme Court, it would continue to recognize the doctrines.
April 01, 2014
Hurricane Sandy is continuing to shape utility-focused legislation in the New Jersey Legislature. As the 2014-2015 legislative session began, a number of bills were re-introduced (they were carried over from the previous legislative session) targeting the reliability of New Jersey’s utilities and their ability to respond to service interruptions in the wake of severe weather events and other emergencies.
March 10, 2014
On March 5, 2014, the House of Representatives passed H.R. 2126, the “Energy Efficiency Improvement Act of 2014.” The bill was co-sponsored by Representatives David McKinley (R-W.Va.) and Peter Welch (D-Vt.). The bill received bipartisan support, passing the House by a vote of 375-36.
March 03, 2014
In a case of first impression that interpreted the force majeure provisions of an industry contract form promulgated by the North American Energy Standards Board (NAESB), Cozen O’Connor prevailed on behalf of plaintiff when, on January 9, 2014, the New Jersey Appellate Division affirmed the trial court’s ruling in Hess Corporation v. Eni Petroleum U.S. LLC, et al., No. A-3464-12T4 (A.D., January 9, 2014).
February 18, 2014
Agreements, especially acquisition agreements, typically contain representations and warranties by one party to the other. The agreements also typically prescribe the duration of those representations and warranties in so-called survival clauses. The treatment of these clauses under Delaware law may surprise many practitioners. In GRT v. Marathon GTF Technology Ltd., C.A. No. 5571-CS (Del. Ch. Jul. 11, 2011), Delaware Chancery Court Chancellor Leo E. Strine Jr. held that a clause limiting the period of time in which contractual representations and warranties survive closing acts as a statute of limitations on the buyer's ability to commence litigation f or breach.
January 16, 2014
When does the life of a Delaware corporation end? Not as long as there are third-party claimants with claims to assert and undistributed assets available to satisfy them. In Anderson v. Krafft-Murphy, No. 85, 2013 (Del. Nov. 26, 2013), asbestos tort claimants in lawsuits pending in other jurisdictions against Krafft-Murphy Co., a dissolved Delaware corporation, sought the appointment of a receiver to enable them to lawfully pursue their claims against the corporation in those other courts beyond the statutory three-year winding-up period. The Court of Chancery had granted summary judgment in favor of the corporation, holding that claims filed more than 10 years after the date of dissolution were time-barred and should be dismissed, and claims filed less than 10 years after the date of dissolution could proceed without a court-appointed receiver.
October 09, 2013
The Delaware General Corporation Law, like the business corporation law of most states, provides in Section 223(a) that vacancies on a corporate board can be filled through appointment of new directors by the existing directors unless the certificate of incorporation or bylaws provide otherwise. However, unlike the corporation law in other states, Section 223(c) of the DGCL allows stockholders in certain circumstances to petition the Court of Chancery to direct that a special stockholders' meeting take place in order to fill the vacancies through a stockholder vote. Section 223(c) commits the decision to grant the petition to the discretion of the court.
August 15, 2013
Two recent bankruptcy cases decided on the same day by the same judge dealt with motions to amend the complaints in preference actions. Both cases illustrate the court's application of the relation-back doctrine, with differing results. Along the way, the court addressed the requirements for proper service and equitable tolling of the statute of limitations
July 24, 2013
The New Jersey Legislature is considering a bill that would pose this question to voters in November: Should a small portion of the state sales tax be dedicated to preserve critical open spaces and farmland in New Jersey? For anyone concerned about the quality of life and property values in New Jersey, the answer should be "Yes!"
July 03, 2013
This podcast will focus on two recent SEC public finance enforcement actions that reflect a common theme - issuers are liable under the securities laws for material misstatements or omissions made outside of an official statement or other offering document.
May 14, 2013
In an opinion issued April 30, In re Fitness Holdings International, 2013 U.S. App. LEXIS 8729, the U.S. Court of Appeals for the 9th Circuit joined a number of other circuit courts in recognizing the authority of courts to recharacterize purported debt owed by a corporation as equity.
March 14, 2013
On January 23, 2013, the Pennsylvania Benefit Corporation Act (the Act) became effective. The Act authorizes a new type of for-profit business corporation known as a benefit corporation. Pennsylvania is now one of 12 states that have passed laws creating benefit corporations.
March 04, 2013
On January 24, the Federal Energy Regulatory Commission
(FERC) approved a significant settlement addressing the base rate treatment for planned actions to overhaul the aging Columbia Gas Transmission, LLC (Columbia) pipeline system. While by its own terms the settlement is not considered precedential, FERC’s approval of the settlement is noteworthy for operators of older natural gas transmission and distribution pipelines and hazardous liquids pipelines systems. These pipeline systems may contain bare steel or cast iron, may have inadequate cathodic protection, may be subject to settling or other environmental conditions that have placed significant stress on pipe, may not be “piggable,” or otherwise may be at risk of reduced operating pressure in the face of potentially heightened requirements for establishing maximum allowable operating pressure. As increased focus on pipeline integrity management drives capital expenditures and operating and maintenance priorities, these transmission and distribution pipeline operators (representing a majority of pipeline mileage in the United States) must engage in thoughtful planning for pipeline facility repairs, upgrades and replacements and identify cost recovery mechanisms that work best for their specific circumstances.
February 22, 2013
The Delaware Bankruptcy Court recently issued an opinion in the Indianapolis Downs Chapter 11 case that is worth reading in its entirety for its impact on numerous plan confirmation issues. This article will address the court's endorsement of post-petition lock-up agreements and, secondarily, the court's approval of a plan's third-party release provision that provides for the deemed consent of non-voting creditors.
February 20, 2013
Little more than a week after reports of cyber attacks targeted at the Department of Energy, The New York Times and The Wall Street Journal, President Obama declared in his State of the Union address that these forms of attacks on the nation’s critical infrastructure are rapidly growing and present “real threats to our security and our economy.”
January 23, 2013
On January 2, 2013, President Obama signed into law the National Defense Authorization Act of 2013 (H.R. 4013) (NDAA 2013). The Act contains several new Iran sanctions that target Iran’s energy, shipbuilding and shipping sectors, including its ports. The Act also imposes new obligations on insurers and underwriters providing services to those industries.
October 24, 2012
Seventh Circuit Rules that Medical Necessity Trumps State-Imposed Cap on "Optional" Medicaid Coverage - Health Law Alert - In a class action lawsuit, the U.S. Court of Appeals for the 7th Circuit recently affirmed a lower court decision granting a preliminary injunction that prevented the state of Indiana from enforcing a $1,000 annual cap on Medicaid coverage for medically necessary dental services, and concluded the cap most likely violated rights granted to Medicaid beneficiaries under federal law. Bontrager v. Indiana Family and Social Services Administration, 2012 U.S. App. LEXIS 20157 (September 26, 2012).
October 01, 2012
SEC Recommends Major Changes in Municipal Securities Market - Public & Project Finance Alert - The Securities and Exchange Commission (the SEC) on July 31, 2012 issued a comprehensive report with recommendations to improve the municipal securities market and enhance disclosure provided to investors.
August 15, 2012
Chancery Court Loosens Restrictions of Confidentiality Designation, Trusting Lawyers' Good Faith - Delaware Business Court Insider - It is common practice in Chancery Court cases to enter into a stipulated confidentiality order permitting parties to designate certain documents as confidential and to limit their disclosure and use by parties in the pending litigation.
Frequently, the confidentiality orders contain several classifications that can be utilized by the parties to restrict even further the disclosure of certain documents to counsel for the parties or to designated persons.
July 19, 2012
GAO Publishes Report on Factors That May Affect Trends in Regulation A Offerings - Securities Alert - One of the primary objectives behind the Jumpstart Our Business Startups Act (the JOBS Act) was to increase small business capital formation.
July 02, 2012
The JOBS ACT: SEC Guidance on the Changes to the Registration and Deregistration Requirements under the Exchange Act - Securities Alert - H.R. 3606, also known as the Jumpstart Our Business Startups Act (JOBS Act), was signed into law on April 5, 2012.
June 29, 2012
Third Circuit Extends Grossman's Test for when a 'Claim' Arises but Declines Discharge of Claims on Due Process Grounds - Bankruptcy, Insolvency & Restructuring Alert - Confirmation of a plan of reorganization generally discharges all pre-confirmation “claims.” However, in some instances, a plaintiff’s claim against a debtor does not manifest itself until after a plan has already been confirmed.
June 28, 2012
Supreme Court Rules on Affordable Health Care Act: Upholds Individual Mandate and Limits Scope of Medicaid Expansion - Health Law Alert - In a heavily anticipated landmark ruling, the Supreme Court has upheld the constitutionality of the so-called “individual mandate” of the Affordable Care Act – i.e., the requirement that those not insured privately, through their employer or through a governmental program, must either purchase minimum essential health insurance coverage or pay a “penalty” for failing to do so.
June 26, 2012
Confidentiality Agreements and Standstill Provisions; the Delaware Chancery Court Broadly Construes Confidentiality Agreements and Enjoins a Hostile Bid Despite the Absence of Standstill Provisions Relating to Stock Transactions - Securities Alert - In a significant recent decision, Martin Marietta Materials, Inc. v. Vulcan Materials Company, the Delaware Chancery Court reiterated the preference of Delaware courts to enforce confidentiality agreements and to construe them broadly as a matter of public policy.
June 21, 2012
Federal Court Sends Mixed Message on Hospital's Right to Payment for Out-of-Network Services - Health Law Alert - Hospitals seeking reimbursement from a Medicaid managed care organization (MCO) for non-contracted services, and without the benefit of a single case agreement, need a legal basis to compel payment by the MCO.
June 01, 2012
Public Finance: A Survey of Recent Developments - The Authority: Pennsylvania Municipal Authorities Association - Over the last year and several recent months various regulatory and other developments have occurred with respect to the municipal bond markets and municipal finance. The purpose of this article is to briefly highlight a number of these developments and point out certain related issues. This is not intended to be exhaustive. Pursuant to the Dodd-Frank financial reform legislation ("Dodd-Frank"), the SEC conducted field hearings on the municipal markets in 2010 and 2011. SEC Commissioner
May 23, 2012
Eleventh Circuit Expands Fraudulent Transfer Liability in Tousa Decision - Bankruptcy, Insolvency & Restructuring Alert - In a decision that may greatly expand the level of due diligence required of creditors seeking payment from distressed debtors, on May 15, 2012 the U.S. Court of Appeals for the 11th Circuit (the Circuit Court) issued an opinion in In re TOUSA, Inc. that affirmed the original decision of the U.S. Bankruptcy Court...
May 10, 2012
The JOBS Act: SEC Guidance on the Confidential Submission Process - Securities Alert - H.R. 3606, also known as the Jumpstart Our Business Startups Act (JOBS Act), was signed into law on April 5, 2012. Since its enactment, the Division of Corporate Finance (the Division) of the Securities and Exchange Commission (the Commission) has provided guidance on the implementation and application of the JOBS Act in light of its existing rules, regulations and procedures.
May 09, 2012
Safe Harbor Unavailable for Payments to Collateralize Letter of Credit in Bond Redemption - Delaware Business Court Insider -
May 08, 2012
Recent SEC Enforcement/Investigation Developments in Public Finance - Cozen O'Connor Podcast - Click on the link to listen to the podcast.
May 01, 2012
Clock is Running on Gifting Opportunities - Private Client Services Alert - As you may know, the exemption for both gift tax and estate tax purposes for the balance of this calendar year is $5,120,000 per person.
April 13, 2012
JOBS Act Becomes Law and SEC Issues Guidance: The JOBS Act Reforms the Regulatory Scheme Governing the Offering of Securities - Securities Offerings and Regulation Alert! - The Jumpstart Our Business Startups Act, or JOBS Act, was enacted on April 5, 2012. The JOBS Act was a legislative response to the sharp decline in public offerings during the last decade. It is intended to reform the private and public offering process to ease the regulatory burdens on smaller companies and facilitate capital formation.
April 11, 2012
Bankruptcy Court for the District of Delaware Denies Cramdown of Liquidating Plan Because Approving Classes Were "Artificially Impaired" - Bankruptcy, Insolvency & Restructuring Alert! - When a debtor is unable to obtain acceptance of its chapter 11 plan of reorganization or liquidation by all impaired creditor classes, it may attempt to “cramdown” the plan upon certain rejecting classes.1 One of the requirements in
order to obtain confirmation of a plan through a cramdown is that at least one class of impaired claims must approve the plan, determined without including the votes of insider creditors.
April 01, 2012
It’s the Issuer’s Prerogative MSRB Proposes Rule Amendments for Retail Order Periods for Bond Offerings - Government Finance Officers Association of Pennsylvania Newsletter - For various types of municipal bonds or notes that are publicly offered, the marketing process may often involve a retail order period that is for a day or so prior to pricing the bonds with institutional investors. Retail order periods are meant to gain access to individual investors who typically purchase bonds in smaller lots than institutional investors. A significant percentage of municipal securities is held by individual...
March 28, 2012
Nondebtor Parent's Revocation of S Corporate Election Held To Be Void - Delaware Business Court Insider -
March 18, 2012
The Duty of Chapter 7 Trustees to Perform Obligations of an ERISA Plan Administrator: Jurisdictional and Practical Considerations - Inside the Minds - Bankruptcy trustees are fiduciaries. A Chapter 7 trustee’s primary obligation is to “collect and reduce to money the property of the estate for which such trustee serves, and close such estate as expeditiously as is compatible with the best interests of parties in interest[.]” 11 U.S.C. § 704(a)(1) (2012). As an officer of the court and as a representative of a debtor’s creditors, the trustee has a duty to protect and preserve estate property, and to realize the maximum return for...
February 21, 2012
CMS Issues Proposed Rule on Reporting and Returning Medicare Overpayments - Health Law Alert! - On February 16, 2012, the Centers for Medicare & Medicaid Services (CMS) issued a widely anticipated proposed rule (the proposed rule) implementing the statutory requirement of Section 6402(a) of the Affordable Care Act (the ACA) that providers and
suppliers report and return overpayments from Medicare and Medicaid.
January 26, 2012
The hype surrounding Super Bowl advertisements has triggered government scrutiny. Just in time for the 2012 Super Bowl early next month, the Federal Trade Commission's (FTC) Division of Advertising Practices issued a closing letter involving Super Bowl advertising practices employed during the 2011 Super Bowl. The November 16, 2011 FTC opinion highlights why all companies should have internal antitrust and consumer protection compliance programs in place.
January 24, 2012
Melissa Maxman, co-chair of Cozen O'Connor's Antitrust Practice Group, and Robert Magovern, a member of the Business Law Department, discuss the Federal Trade Commission's Super Bowl Advertising decision, examining practices from 2011's big game, and highlights the importance of antitrust and consumer protection compliance programs.
January 18, 2012
Delaware Bankruptcy Court Expounds on Meaning and Significance of Stern - Delaware Business Court Insider -
January 05, 2012
Sheetz Test Rejected for Sales and Use Tax - Tax Alert -
December 29, 2011
Pallets by Themselves Not Considered Containers - Tax Alert -
December 28, 2011
Tax Compromises Possible at Board of Appeals - Tax Alert -
December 16, 2011
Public Pension Disclosure — Recent Developments and Emerging Ideas About Best Practices - Cozen O'Connor Podcast - Click on a link below to listen to the segment.
December 15, 2011
Philadelphia Amends Business Privilege Tax Bases, Rates & Credits & Provides Relief to New Businesses - Tax Alert! - Philadelphia City Council unanimously passed bills number 110554 and 110548-A, both of which were signed by the mayor on November 14. Bill number 110554 amends the city’s Business Privilege Tax (BPT) to allow for an exclusion to all taxpayers for a flat amount of receipts from the gross receipts portion of the tax, a pro-rata exclusion from the net income portion of the tax to account for the excluded
November 23, 2011
Bankruptcy Court Asserts Jurisdiction to Determine Debtor's State Tax Liability - Delaware Business Court Insider - At a time when practitioners debate the reach of bankruptcy court jurisdiction, the Delaware court continues to assert its jurisdiction in the face
of new challenges. In In re Indianapolis Downs LLC, the U.S. Bankruptcy Court for the District of Delaware held that it had jurisdiction to decide whether a state taxing authority could continue to collect a state tax on part
of the debtor’s revenue from slot-machine wagering. In doing so, the court turned back
November 01, 2011
Unpredictable Treatment: Should trusts be used in jurisdictions unfamiliar with the concept? - Trusts & Estates - As the world appears to shrink, more people acquire property in multiple jurisdictions or have
family members living in different countries. Residents of the United States and other
common law jurisdictions have historically used trusts to achieve their estate-planning
objectives. Employing a trustee, who holds legal title to property for the benefit of one or more
beneficiaries in accordance with the provisions of a trust agreement and applicable law, can provide...
October 26, 2011
Chancery Court Allows LLC Member to Inspect Books and Records of LLC Subsidiary – Delaware Business Court Insider – In the Aug. 31 case DFG Wine Co. LLC v. Eight Estates Wine Holdings LLC, the Delaware Court of Chancery considered the question of the right of a limited liability company member to inspect the books and records of the company's subsidiary. In
this post-trial letter opinion, the court granted an LLC member the right to inspect certain books and records of the company's subsidiary
October 21, 2011
Act Now On Favorable Gift and Estate Tax Planning Rules - Private Client Services Alert! - Estate, gift, and GST exemptions were increased to $5,000,000 for 2011 and are scheduled to increase to $5,120,000 in 2012 due to an inflation adjustment. Also, the transfer tax rate was reduced to 35 percent. However, the 2010 Act contains a “sunset provision” which will reset the exemptions to $1,000,000 and the tax rate to 55 percent effective January 1, 2013 unless Congress takes further action.
October 14, 2011
The Medicare Secondary Payer Act - CMS Provides Initial Guidance on Medicare Set Asides in Liability Settlements - Health Law Alert! - On September 30, 2011, CMS, for the first time, issued guidance on the use of Liability Medicare Set-Aside Arrangements (LMSAs) related to liability insurance settlements and judgments (the Guidance)¹. The absence of any formal direction from CMS on the handling of LMSAs has been a significant hindrance in settlement discussions, and even though this Guidance is relatively limited, it is nonetheless helpful
October 01, 2011
Fall 2011 - Business Law Observer - We welcome your inquiries on these topics and any other questions you may have, and trust that we can provide you with the counsel you need to steer clear of the impediments to successfully running your business.
September 26, 2011
3d Circuit Permits Pennsylvania Minority Shareholder to Sue Majority Shareholders for Breach of Fiduciary Duty After Completion of Cash-Out Merger - Corporate Alert! - In August, 2011, the U.S. 3d Circuit Court of Appeals held that the fact that the Pennsylvania Business Corporation Law gives appraisal rights to minority shareholders “squeezed out” by a merger does not preclude other remedies, including a breach of fiduciary duty claim. In so doing, the 3d Circuit overruled the lower court, which had dismissed the fiduciary duty claim of a minority shareholder (Mitchell) on the basis that appraisal rights are the exclusive remedy
September 21, 2011
Affirming Creditor's Lack of Derivative Standing, Supreme Court Underscores Plain Meaning of LLC Act - Delaware Business Court Insider - Earlier this month, in CML V LLC v. Bax, the Delaware Supreme Court held that a creditor of an insolvent limited liability company lacks standing under the Delaware Limited Liability Company Act to bring a derivative action against the LLC's former managers. In so doing, the court gave effect to the plain meaning of the LLC Act and drew a sharp distinction between the rights of creditors of insolvent LLCs and those of creditors of insolvent corporations.
August 12, 2011
Bank Shares Tax Calculation Modified - Tax Alert! - The Commonwealth Court en banc dismissed exceptions from a panel decision and held that the calculation of Bank Shares Tax must be modified to cure a constitutional defect in the application of the tax to certain post-merger institutions. Lebanon Valley Farmers Bank v. Commonwealth, No. 698 F.R. 2005 (Pa. Commw. Aug. 4, 2011).
August 10, 2011
Declaratory Judgment on Hotel Tax Application May Proceed - Tax Alert! - panel of the Commonwealth Court held that a county could proceed with a declaratory judgment action seeking to establish that online reservation companies are subject to the county’s hotel tax. County of Lawrence v. Hotels.com LP, No. 2541 C.D. 2010 (Pa. Commw., Aug. 3, 2011).
August 02, 2011
STEB Sets 2010 Philadelphia Common Level Ratio at 18.1% - Tax Alert! - The Pennsylvania State Tax Equalization Board (STEB) recently released the 2010 Common Level Ratios (CLR) for counties across Pennsylvania. The 2010 CLR for Philadelphia is 18.1% — not quite half what it has been for the past twenty-five years. The large shift will have an important impact in two areas of Philadelphia taxation.
July 21, 2011
IRS Issues Guidance to Examiners on the Codified Economic Substance Doctrine and Associated Penalties - Tax Alert! - On July 15, the IRS Large Business and International Division (LB&I) issued an Industry Director’s Directive (Directive) providing guidance to examiners and their managers regarding the Codified Economic Substance Doctrine (ES Doctrine) and its penalties. The Directive describes when it is appropriate to raise the ES Doctrine in a case and the series of steps the examiner must take to seek approval for the application of the ES Doctrine in the particular case.
July 13, 2011
Bankruptcy Court Rejects Challenge to Personal Jurisdiction in Preference Case - Delaware Business Court Insider - In a June 22 decision in a case of first impression, the Delaware Bankruptcy Court turned back a due process challenge to the exercise of the court's personal jurisdiction over a preference defendant. In In re DBSI Inc., the trustee sought to avoid and recover pre‐petition transfers made to various insiders and
pre‐petition transfers made on behalf of the insiders to the IRS and other taxing authorities.
July 11, 2011
Don't Ask And Don't Tell: How to Avoid GINA Liability - The Corporate Counselor -
July 08, 2011
Losses and Deductions From a Tax-Exempt Organization's Unrelated Trade or Business - Maximizing Tax Efficiencies in a Distressed Real Estate Market - Tax Group Reprt - In connection with its ongoing compliance audits of colleges and universities, the Internal Revenue Service has been reviewing the extent to which colleges, universities and certain other Code Sec. 501(c)(3) organizations reported tax losses from unrelated businesses. According to news reports, the IRS believes that these losses have been used to offset taxable income realized by the organizations from unrelated trades or businesses
June 29, 2011
Further Updates - FBAR Reporting Requirements for Employee Benefit Plans - Employee Benefits & Executive Compensation Alert! - Since our previous Alert, the Treasury Department has issued final regulations and a new disclosure form for the Report of Foreign Bank and Financial Accounts (FBAR), instituted a new Offshore Voluntary Disclosure Program, and provided certain individuals with extensions of filing deadlines.
June 21, 2011
Bankruptcy Court Rejects Bright- Line Rule for Substantially Contemporaneous Exchange - Delaware Business Court Insider - Bankruptcy Court Judge Kevin Gross, in In re J. Silver Clothing Inc., a 2011 case
out of the District of Delaware, rejected an argument that the 10-day (now 30-
day) period in Bankruptcy Code Section 547(e)(2) provides a bright-line limit as
to whether a transfer is "substantially contemporaneous"
May 31, 2011
Class Action Stayed - Tax Alert! - The Pennsylvania Superior Court held that a trial court correctly ruled that a purported class action for the refund of Sales and Use Tax must be decided in the first instance by the Department of Revenue. It should have stayed the action until the Department of Revenue acted on the refund claim. Stoloff v. Neiman Marcus Group, Inc., No. 2674 EDA 2009 (Pa. Super. May 23, 2011).
May 20, 2011
Bankruptcy filings dip - Philadelphia Business Journal - Local Chapter 11 business bankruptcy filings fell close to pre-recession numbers in the first quarter after spiking dramatically between late 2008 through the middle of last year. But a second wave of filings could come if interest rates rise without being accompanied by significant economic improvement, analysts and bankruptcy lawyers say. Business Chapter 11 filings in New Jersey and the Eastern District of
May 12, 2011
Farmstead Valued at Current Market Value - Tax Alert! -
April 26, 2011
FINRA adopts regulations to address allocation, pricing and trading of new issues - Thomas Reuters - The Securities and Exchange Commission recently approved Financial Industry Regulatory Authority rule 5131, which will go into effect on May 27, 2011. This rule imposes substantial new limitations on the initial public offering process in an effort to engender public confidence. The rule imposes prohibitions on broker-dealers (FINRA members) participating in the allocation, pricing and trading of "new...
April 21, 2011
Air Pump Sales Not Taxable - Tax Alert! - In a divided panel decision, the Commonwealth Court held that sales from coin operated air vending machines located in gas stations and convenience stores were not taxable for Sales and Use Tax purposes. Air-Serv Group, LLC v. Commonwealth, No. 459 F.R. 2008 (Pa. Cmwth. April 14, 2011). The majority held that the sales were not taxable for several reasons.
April 20, 2011
Reassessment to Comparables Denied - Tax Alert! - A panel of the Commonwealth Court concluded that, although a taxpayer demonstrated that his property was assessed at a much greater value than certain comparable properties in a development, he was entitled to no relief beyond application of the common level ratio. Smith v. Carbon County Board of Assessment Appeals, 10 A.3d 393 (Pa. Commw. 2010).
April 19, 2011
Use Value of Forest Reserve Correctly Determined - Tax Alert! - A panel of the Commonwealth Court concluded that, although a taxpayer demonstrated that his property was assessed at a much greater value than certain comparable properties in a development, he was entitled to no relief beyond application of the common level ratio. Smith v. Carbon County Board of Assessment Appeals, 10 A.3d 393 (Pa. Commw. 2010).
April 15, 2011
Community Center Was Not a Charity - Tax Alert! - An en banc decision of the Commonwealth Court held that a community center that provided free services for all its programs was not a purely public charity entitled to an exemption for real estate tax purposes. Church of the Overcomer v. Delaware County Board of Assessment Appeals, No. 269 C.D. 2010 (Pa. Commw. Mar. 17, 2011). The decision appears to be incorrectly decided. Click here for the entire story.
April 08, 2011
FINRA Adopts New Regulations to Address the Allocation, Pricing and Trade of New Issues - Securities Offerings and Regulation Alert! - The Securities and Exchange Commission recently approved Financial Industry Regulatory Authority (FINRA) Rule 5131, which will go into effect on May 27, 2011. This rule imposes substantial new limitations on the initial public offering process in an effort to engender public confidence. The rule imposes prohibitions on broker-dealers (FINRA members) participating in the allocation, pricing, and trading of "new issues."
April 01, 2011
After a two month delay, the Federal Trade Commission (FTC) and Department of Justice (DOJ), acting jointly, and the Center for Medicare & Medicaid Services (CMS) released proposed regulations for Accountable Care Organizations (ACOs) participating in the Medicare Shared Savings Program (the Program). The Program was created pursuant to the Affordable Care Act and was intended to encourage health care providers to better work together to lower costs and improve patient outcomes.
April 01, 2011
Bid Rigging In The Crosshairs - Construction Today -
March 23, 2011
On First Anniversary, a Look at Challenges to Health Care - The Legal Intelligencer - On its one-year anniversary, the sweeping health care reform law — referred to as the "Affordable Care Act" (ACA) if you like it, and "Obamacare" if you don't — is embroiled in litigation. Its fate, like that of the 2000 presidential election, is likely to be determined by the Supreme Court.
March 02, 2011
FINRA Proposes Amendments to the Rule Governing Member Firm Participation in Private Placements - Securities Offerings and Regulation Alert! - The Financial Industry Regulatory Authority (FINRA) has proposed amendments to Rule 5122 (the rule), which governs a member firm’s participation in private placements. The rule initially was developed in response to abuses in the sale of private placements issued by broker-dealers and their control entities.
February 25, 2011
On January 31, 2011, one of the world’s largest reinsurance brokers, Guy Carpenter & Co. LLC, and its former affiliated reinsurer agreed to pay $4.25 million to settle a lawsuit brought by the Connecticut attorney general alleging these companies engaged in a series of conspiracies to create closed reinsurance markets and drive up reinsurance costs. This settlement, which concludes an investigation and landmark litigation that spanned more than three years,
February 18, 2011
Controversial Fraudulent Conveyance Decision in Tousa Reversed - Bankruptcy, Insolvency & Restructuring Alert! - In what has validated lenders’ belief in the propriety of a parent corporation’s borrowing based in part on the parent company’s guarantees and assets of its operating subsidiaries, the United States District Court for the Southern District of Florida, on February 11, 2011, reversed the controversial Southern District of Florida Bankruptcy Court’s decision in In re TOUSA, Inc., which dramatically expanded the powers of a bankruptcy trustee to set aside as a
February 07, 2011
Delaware Supreme Court Affirms Use of Net Operating Loss Poison Pills - Corporate Law Alert! - In the recent case, Versata Enterprises, Inc. and Trilogy, Inc. v. Selectica, Inc., the Delaware Supreme Court upheld the Delaware Chancery Court’s ruling that the use of a net operating loss poison pill was valid. This holding is significant because it is the first time the court has examined the validity of a net operating loss poison pill and, further, the first time the court has ruled on any pill that was actually triggered.
January 31, 2011
HSR Filing Threshold Increases to $66 Million ... and Other Facts that May Impact Whether You Have to File - Corporate Law Alert! - The Federal Trade Commission has released the annual jurisdictional adjustments for premerger notification filings made pursuant to the HSR Act, which take effect for transactions closing on or after February 24, 2011. But while the thresholds should be the first step in determining whether or not you have to file, there are other important considerations as well.
January 18, 2011
Expedia Not Required to Collect Philadelphia Hotel Tax - Tax Alert! - The Philadelphia Court of Common Pleas affirmed a decision by the City’s Tax Review Board that an Internet hotel reservation company was not liable to collect Philadelphia’s Hotel Tax. City of Philadelphia v. City of Philadelphia Tax Review Board, Mar. Term 2010 No. 00764 (Phila. C.P. Jan. 14, 2011)
December 22, 2010
Important Estate, Gift and Generation Skipping Tax Changes - Private Client Services Alert! - Congress has passed the 2010 “Tax Relief Act” which includes enormously important provisions affecting the federal estate tax, gift tax and generation-skipping tax. This legislation impacts the tax laws in effect for 2010, 2011 and 2012, and has a sunset provision of December 31, 2012
December 12, 2010
House Judiciary Hearing Provides Few Answers for ACO Participants - Health Law Alert! - At the recent House Judiciary Committee’s hearing on the effects of antitrust laws in the heath care industry, testimony relating to accountable care organizations (ACOs) was plentiful, but unrevealing. Industry representatives and federal antitrust enforcers agreed that ACOs have the potential to successfully lower costs and improve quality of care, but government witnesses declined to provide a roadmap as to how ACOs may avoid running afoul of the antitrust laws.
November 23, 2010
Fall 2010 - Business Law Observer - Since our Spring 2010 Observer was published, significant new legislation has been enacted
by Congress, affecting tax planning and securities transactions, among other areas. We have summarized two of the new acts, in addition to a review of existing legislation as it affects doing business abroad. Imbedded in the Health Care Act is a new provision in the Internal Revenue Code, codifying the “economic substance doctrine.”
November 17, 2010
CMS Voluntary Self-Referral Disclosure Protocol: The Good, The Bad, and The Ugly - Health Law Alert! - On September 23, the Centers for Medicare & Medicaid Services (CMS) released the much anticipated Medicare self-referral disclosure protocol (SRDP). CMS was required to establish the SRDP by Section 6409 of the Affordable Care Act (ACA), which obligated the Secretary of Health and Human Services to inform providers and suppliers how to self-disclose actual or potential violations of the Stark law.
November 16, 2010
CMS Delays Section 111 Reporting for Liability Insurers - Health Law Alert! - the Centers for Medicare & Medicaid Services (CMS) announced a one-year delay in the implementation of certain reporting obligations under Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 for claims involving liability insurers (including self-insured entities). Claims involving workers’ compensation and no-fault insurance, however, must be reported as scheduled in the first calendar quarter of 2011. The net result is a two-tiered implementation timeline.
November 16, 2010
SEC Proposes Say-On-Pay Rules - Securities Offerings and Regulation Alert! - Pursuant to Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act on October 18, 2010, the U.S. Securities and Exchange Commission (the SEC) proposed amending its rules to enable shareholders to cast advisory votes on executive compensation and golden parachute compensation.
November 16, 2010
SEC Proposes Rule to Define 'Family Office' - Securities Offerings and Regulation Alert! - "Family offices" are entities established by wealthy families to manage their wealth, plan for their families' financial future, and provide other services to family members. It is estimated that there are between 2,500 and 3,000 single family offices in the United States managing more than $1.2 trillion in assets. Generally, family offices meet the definition of "investment adviser" under the Investment Advisers Act of 1940 (the Advisers Act) because,
November 08, 2010
2010 End-of-Year Estate Planning: Planning Ahead to Confront Uncertainty - Private Client Services Alert! - It is now common knowledge that the federal estate tax and the generation-skipping transfer tax (GST) are repealed for 2010. Along with the repeal, the federal gift tax rate for 2010 is decreased to 35%, a significant reduction from the prior top rate of 55%. The provisions of the law creating the repeal and the reduced gift tax rate will “sunset” on December 31, 2010.
October 26, 2010
The Medicare Secondary Payer Act and Its Impact on Litigation - The Legal Intelligencer - The Medicare Secondary Payer Act (MSP Act) was first enacted in 1980; however, it is the recent Section 111 reporting requirements (that become effective Jan. 1, 2011, for settlements entered into on or after Oct. 1, 2010) that have brought that statute to the forefront of personal injury and insurance defense litigation. Because liability settlements that include Medicare beneficiaries now have to be reported to the
October 18, 2010
DOJ Follows Through on Pledge; Sues BCBS of Michigan Over MFN Clauses - Health Law Alert! - The U.S. Department of Justice filed an antitrust lawsuit today against Blue Cross of Michigan alleging that “most favored nation” clauses (“MFNs”) in its hospital contracts violate §1 of the Sherman Act because they serve to raise hospital prices, prevent other insurers from entering the marketplace, and discourage hospitals from providing discounts to other insurers. DOJ seeks to have MFNs between Blue Cross and hospitals declared illegal, to
September 29, 2010
The Second Circuit Issues an Important Decision Regarding the Scope of the Bespeaks-Caution Doctrine - Securities and Financial Services Litigation and Securities Regulation Alert! - In a recent decision, the United States Court of Appeals for the Second Circuit made clear that the bespeaks-caution doctrine applies to forward-looking statements only and not to characterizations that communicate present or historical facts. Any company that makes public statements should take heed. Disclosures about risks will cover forward-looking statements; but where a plaintiff can show that an allegedly false or misleading statement pertains to present or historical facts,
September 27, 2010
The case looked like a slam-dunk for the Federal Trade Commission. A drug company allegedly cornered the market on a medicine - not just any medicine, but one used to treat premature babies with life-threatening heart defects - then raised prices 1,300 percent. The FTC sued the company, Ovation Pharmaceuticals, now Lundbeck Inc., in Minneapolis federal court in December 2008, seeking the strongest civil antitrust penalties possible - divestiture and disgorgement of $105 million in profits. The state of Minnesota joined in as a plaintiff as well.
August 03, 2010
Proposed New Rules Implementing HITECH Amendments to HIPAA Make Significant Changes - Health Law Alert! - On July 14, 2010, the Department of Health and Human Services (“HHS”) issued a Notice of Proposed Rulemaking (the “Proposed Regulations”) to modify certain regulations that implement the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”). Specifically, the Proposed Regulations implement statutory amendments to HIPAA’s Privacy, Security, and Enforcement Rules made by the Health Information Technology for Economic and Clinical Health Act (“HITECH”),
July 27, 2010
License for Canned Software is Taxable - Tax Law Alert! - The Supreme Court of Pennsylvania held that a license to use canned software is a license to use tangible personal property and is therefore taxable for Sales and Use Tax purposes. Dechert LLP v. Commonwealth, No. 12 MAP 2008 (Pa., July 20, 2010). Oral argument on the appeal was held over 1 ½ years ago.
July 26, 2010
Retirees Find that Employer's Bankruptcy May Be a Good Thing - Bankruptcy, Insolvency & Restructuring Alert! - In deciding a question never before addressed by a circuit level court, the U.S. Court of Appeals for the Third Circuit, in In re Visteon, No. 10-1944 (July 13, 2010), held that the plain language of section 1114 of the Bankruptcy Code forbids a debtor from modifying or terminating retiree benefits without first complying with that section’s procedural and substantive safeguards
July 21, 2010
FCC Offers ‘Third Way’ On Authority Over Internet Service - New York Law Journal - The U.S. Court of Appeals for the D.C. Circuit recently ruled that the Federal Communications
Commission (FCC) lacked jurisdiction over Comcast’s
Internet service. Comcast Corp. v. FCC, Docket No. 08-1291 (D.C. Cir. April 6, 2010). Therefore, the FCC lacked authority to impose upon Comcast nondiscriminatory obligations regarding such
July 07, 2010
Supreme Court Addresses the Constitutionality of Public Company Accounting Oversight Board... - Securities Offerings and Regulation Alert! - On June 28, 2010, the U.S. Supreme Court issued a much anticipated decision in Free Enterprise Fund v. Public Company Accounting Oversight Board (No. 08-861). Free Enterprise Fund challenged the constitutionality of the Public Company Accounting Oversight Board (“PCAOB”) on a number of constitutional grounds, sought to have the PCAOB declared unconstitutional, and sought to enjoin the PCAOB from exercising its enforcement powers.
June 22, 2010
Update - FBAR Reporting Requirements for Employee Benefit Plans - Employee Benefits & Executive Compensation Alert! - During the past year, we have reported on expanded obligations of retirement and other employee benefit plans, along with other taxpayers, to file the Report of Foreign Bank and Financial Accounts (“FBAR”). This report must be received by the U.S. Department of Treasury (not merely mailed) by June 30, 2010. There are no extensions of time to file. Recently, further guidance and administrative relief have been provided by the IRS for the 2009 FBAR.
June 03, 2010
Third Circuit Remands Case Involving Use of In Pari Delicto Defense by Outside Auditors, After Receiving Pennsylvania Supreme Court's Guidance - Bankruptcy, Insolvency & Restructuring Alert! - In a February 19, 2010 Alert, we reported on an opinion of the Pennsylvania Supreme Court regarding the use of an imputation-based in pari delicto defense in an auditor-liability context, an issue of first impression under Pennsylvania law. Off. Comm. of Unsecured Creditors of Allegheny Health Educ. & Research Fund v. PricewaterhouseCoopers, LLP (“Allegheny III”), 989 A.2d 313 (Pa. 2010).
June 01, 2010
Increased Scrutiny of Reverse Payment Settlements - The Legal Intelligencer - Two recent opinions suggest a greater willingness on the part of the federal judiciary to scrutinize more closely so-called “reverse payment settlements” that have once again become prevalent in the pharmaceutical industry.
Reverse payment settlements are entered into by a brand-name drug manufacturer and one or more generic drug manufacturers to resolve patent litigation triggered by the generic These
May 27, 2010
Threading the 'American Needle': The Supreme Court Adopts a New Standard of Concerted Action Under the Sherman Act - Litigation Alert! - In a unanimous decision likely to transcend its unique factual background, on Monday, the United States Supreme Court in American Needle, Inc. v. National Football League, et al., established a new test for determining whether related parties are single entities for purposes of establishing an agreement, combination or conspiracy in violation of Section 1 of the Sherman Act.
May 21, 2010
U.S. Supreme Court Addresses the Statute of Limitations for Private Federal Securities Fraud Claims - Securities Offerings and Regulation Alert! - On April 27, 2010, the United States Supreme Court (“Supreme Court”) held in Merck & Co. v. Reynolds that the limitations period in private securities fraud actions accrues when the plaintiff discovers, or a reasonably diligent plaintiff would have discovered, “the facts constituting the violation,” which include facts concerning a defendant’s fraudulent intent, or scienter. In holding so, the Supreme Court acknowledged that “storm warnings” and “inquiry notice”
May 12, 2010
Stark Realities of Health Care Reform - Health Law Alert! - Our Health Law Alert of April 26, 2010 summarized recent amendments to the Anti-Kickback Statute (“AKS”) concerning “reverse” federal false claims act (“FCA”) and the implications of the requirement of Section 6402 of the Patient Protection and Affordable Care Act of 2010, Pub. L. No. 111-148 (the “PPACA”) to report and refund “overpayments” by Medicare and Medicaid within sixty (60) days of “identification.” An “overpayment” is defined to
May 11, 2010
Health Care Reform Includes Reporting Requirements Regarding Drug and Device Manufacturers' Payments to Physicians and Teaching Hospitals - Health Law Alert! - The Patient Protection and Affordable Care Act (the “PPACA”) of 2010 as amended by the Health Care and Education Reconciliation Act of 2010 (the “Reconciliation Act”) (collectively referred to as “the Health Care Reform Act”) includes a number of new reporting requirements designed to enhance the transparency of certain segments of the health care industry including manufacturers of drugs, medical devices, biologicals and medical supplies.
May 03, 2010
Exemption Denied For Lack Of Free Services - Tax Law Alert! - A panel of the Commonwealth Court reversed a trial court
and held that a nonprofit corporation that provided student
housing was not entitled to a charitable exemption
because it did not give free or discounted services to the students.
CHF-Kutztown, LLC v. Berks County Board of Assessment Appeals, No.
1663 C.D. 2009 (Pa. Cmwlth. Apr. 13, 2010) (unreported).
April 26, 2010
Irrevocable Trust Is an Ordinary Trust - Tax Law Alert! - Adivided panel of the Commonwealth Court rejected
the position of the Department of Revenue and held
that a transfer to an irrevocable trust qualified as a transfer to a living trust excluded from realty transfer tax. Miller v. Commonwealth, No. 757 F.R. 2007 (Pa. Commw. Apr. 8, 2010). A living trust is a qualifying trust intended as a will
substitute. 72 P.S. §8101-C. A transfer to a qualifying living trust is excluded from tax. 72 P.S. §8102-C.3(8.1).
April 26, 2010
Providers Beware: Health Care Reforms Make Failing to Promptly Refund Overpayments—Including Those Attributable to Identified Stark Violations—Potential False Claims Act Violations - Health Law Alert! - By linking the retention of program overpayments and potential liability under the False Claims Act (FCA), the Patient Protection and Affordable Care Act of 2010 (PPACA) has dramatically expanded the scope of exposure for health care providers under the FCA. Potential overpayments to providers—including but not limited to such things as garden variety duplicate payments to discoveries of Medicare payments for designated health services (DHS) provided on referrals from
April 20, 2010
FinCEN and Six Other Federal Regulators Issue Joint Guidance on Anti-Money Laundering Compliance - Securities Offerings and Regulations Alert! - In March 5, 2010, the Financial Crimes Enforcement Network (“FinCEN”), along with six other federal regulatory bodies, issued joint guidance (the “Guidance”) to clarify and consolidate those regulators’ expectations regarding financial institutions’ obligations to obtain beneficial ownership information relating to certain customer accounts and relationships in connection with the Bank Secrecy Act (“BSA”) and the Anti-Money Laundering compliance program
April 19, 2010
Medicare Secondary Payer Update - CMS Delays Reporting Deadlines - Health Law Alert! - In December 2007, Congress amended the Medicare Secondary Payer law (MSP) through Section 111 of the Medicare, Medicaid and SCHIP Extension Act (MMSEA). The amendment imposes mandatory reporting obligations on Responsible Reporting Entities (RREs), including liability, self-insured, no-fault and workers’ compensation insurers (collectively referred to as “non-Group Health Plans” or “Non-GHPs”) regarding settlements with Medicare beneficiaries.
April 12, 2010
House Approves 10-Year Minimum for GRATs - Private Client Services Alert! - The Small Business and Infrastructure Jobs Tax Act of 2010, approved by the House, includes a provision which sets a minimum 10-year term for Grantor Retained Annuity Trusts (GRATs).
March 23, 2010
Highmark, Inc. Challenges PA. Insurance Department Investigation - Health Law Alert! - Highmark, Inc. has filed a lawsuit in the Commonwealth Court of Pennsylvania challenging the legality of an ongoing Pennsylvania Insurance Department investigation involving potential anticompetitive conduct and/or unfair trade practices by Pennsylvania’s Blue Cross and Blue Shield companies.
March 18, 2010
First Circuit Dismisses SEC's Theory of Liability Under Rule 10b-5(b) for Underwriters - Securities Offerings and Regulations Alert! - The U.S. Court of Appeals for the First Circuit, sitting en banc, issued a major blow to the U.S. Securities and Exchange Commission (SEC) on March 10, 2010, when it rejected the SEC’s claims that an underwriter makes implied statements when it disseminates prospectuses. In the opinion, SEC v. Tambone, which was authored by Judge Selya, the court held that one cannot “make” a statement within the purview of Rule 10b-5(b) of the Securities Exchange Act of 1934 (“Exchange Act”) by
March 15, 2010
Cozen O’Connor Ranked No. 2 Bond Counsel in PA; No. 1 Underwriter’s Counsel in NJ - JD Journal - Thomson Reuters recently listed Cozen O’Connor as the number two bond counsel firm in Pennsylvania for 2009. To date, this is the firm’s highest bond counsel ranking. For the second year in a row, the firm was also ranked as the number one underwriter’s counsel in New Jersey.
March 02, 2010
SEC Proposes Amendments to Rule 10b-18 Safe Harbor for Issuer Repurchases - Securities Offerings and Regulations Alert! - The Securities and Exchange Commission (“SEC”)
recently proposed amendments to Rule 10b-18 under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”).1 Rule 10b-18 provides issuers2 with a safe harbor from anti-manipulation liability under the Exchange Act when an issuer repurchases its common stock in the
market in accordance with the Rule’s manner, timing, price and volume conditions.
March 01, 2010
SEC Adopts Short Sale Price Restrictions - Securities Offerings and Regulations Alert! - On February 24, 2010, the Securities and Exchange
Commission (“SEC”) adopted, by a vote of 3-2, a new short sale pricing rule. Rule 201 under Regulation SHO of the Securities Exchange Act of 1934, as amended (“Exchange Act”)restricts the short selling of stock when the price of the security has dropped by 10 percent or more in one day. Once the 10 percent circuit breaker is triggered, only short sells above the current national best bid (“NBB”)
February 19, 2010
Pennsylvania Supreme Court Restricts Use of In Pari Delicto Defense by Outside Auditors - Bankruptcy, Insolvency & Restructuring Alert! - On February 16, 2010, the Pennsylvania Supreme Court issued an opinion of first impression under Pennsylvania law as to whether an imputation-based in pari delicto defense in an auditor-liability context may be asserted.
February 09, 2010
Under New Rules, Plans Offering Mental Health and Substance Use Disorder Benefits Must Ensure Parity in Member Costs and Access to Care - Health Law Alert! - On February 2, 2010, the Centers for Medicare &
Medicaid Services, the Internal Revenue Service,
and the Department of Labor’s Employee Benefits
Security Administration published long-awaited regulations implementing the Mental Health Parity and Addiction Equity Act of 2008 (the “MHPAEA”).1 The MHPAEA followed the Mental Health Parity Act of 1996, which had previously mandated parity in aggregate lifetime and annual dollar limits between mental health benefits and medical/surgical benefits.
February 01, 2010
Flat Tax on Businesses Upheld - Tax Alert! - A panel of the Commonwealth Court concluded that a flat tax of $2,600 on all businesses in a township with gross receipts of over $1 million was lawful. Shelly Funeral Home, Inc. v. Warrington Township, No. 769 C.D. 2009 (Pa. Cmwlth. Dec. 31, 2009) (unreported). The appeal is probably correctly decided, but it highlights several serious policy mistakes by the General Assembly.
January 27, 2010
YMCA Empty Charity - Tax Alert! - In the third appellate decision in ten years of litigation, a commercial fitness center failed in a claim that the operation of a fitness center by a YMCA violated the prohibition against subsidizing a commercial business unrelated to the
YMCA’s charitable purpose. Selfspot, Inc. v. Butler County Family YMCA, No. 1308 D.C. 2008 (Pa. Cmwlth. Jan. 5, 2010) (en banc). The appellate court agreed with the conclusion of the trial court after five days of hearings that the YMCA’s fitness center
January 21, 2010
PEO Did Not Sell Help Supply Services - Tax Alert! - Apanel of the Commonwealth Court concluded that
a flat tax of $2,600 on all businesses in a township
with gross receipts of over $1 million was lawful.
Shelly Funeral Home, Inc. v. Warrington Township, No. 769 C.D.
2009 (Pa. Cmwlth. Dec. 31, 2009) (unreported). The appeal is
probably correctly decided, but it highlights several serious
policy mistakes by the General Assembly.
January 20, 2010
Transfer of Residence to Trust is Taxable - Tax Alert! - A divided panel of the Commonwealth Court held that the transfer of a vacation residential property by husband and wife to themselves as trustees to benefit themselves and their children was taxable because the trust was a business trust, not an ordinary trust for realty transfer tax purposes. Kosco v. Commonwealth, No. 766 F.R. 2007 (Pa. Cmwlth. Dec. 16, 2009). The practical effect of the decision probably will be that virtually no transfer of real estate to a trust can ever qualify
January 18, 2010
A New Era in HIPAA Enforcement: Connecticut Attorney General Files First HITECH Act Suit - Health Law Alert! - Connecticut Attorney General Richard Blumenthal has filed a lawsuit against Health Net of Connecticut, Inc. for violations of the Health Insurance Portability and Accountability Act (“HIPAA”) following Health Net’s loss of protected health information (“PHI”) and other personally identifiable information.
January 18, 2010
MOBILE HOMES ARE REAL ESTATE - Tax Alert! - In two cases, a panel of the Commonwealth Court held
that mobile homes were taxable as real estate for real estate tax purposes. Lazor v. Board of Assessment Appeals, No. 2372 D.C. 2008 (Pa. Cmwlth., Dec. 15, 2009); Gelormino v.
Board of Assessment Appeals, No. 2371 C.D. 2008 (Pa. Cmwlth., Dec. 15, 2009). The pertinent assessment statute imposed real
estate taxes on mobile homes permanently attached to the land or connected to utility facilities.
January 15, 2010
Religious Summer Camp is Not a Charity - Tax Alert! - A panel of the Commonwealth Court held that a Jewish religious camp located in Pike County was not entitled to exemption as a purely public charity because it did not meet one of the case law requirements that an institution relieve the government of some of its burden. Mesivtah Eitz Chaim of Bobov, Inc. v. Pike County Board of Assessment Appeals, No. 2343 C.D. 2008 (Pa. Cmwlth. Dec. 29, 2009) (unreported).
January 13, 2010
Pennsylvania Tax Amnesty Program - Tax Alert! - Act 48 of 2009 established a new tax amnesty program in Pennsylvania (the “Program”). This Program will run 54 days commencing on April 26, 2010 and ending on June 18, 2010 (the “Amnesty Period”). Eligible periods for the Program include all those known and unknown periods that exist as of June 30, 2009. Periods subsequent to June 30, 2009 are not eligible for the program.
January 08, 2010
Estate Tax Repeal (or Not) - Private Client Services Alert! - s many of you will recall, the federal estate and gift tax system was significantly modified in 2001. Many of the modifications of the 2001 Tax Act were to be phased in over a number of years.
January 07, 2010
Local Head Tax Prohibited by Federal Act - Tax Alert! - The federal Third Circuit Court of Appeals held that the U.S. Department of Transportation correctly determined that a head tax imposed by Tinicum Township was prohibited by the Anti-Head Tax Act, 48 U.S.C. §40116. Township of Tinicum v. United States, No. 08-1830 (3rd Cir. Sept. 14, 2009).
December 18, 2009
Pennsylvania Tax Changes - 2009/2010 Budget Bill - Tax Alert! - More than 100 days after the due date mandated by law, the Pennsylvania budget for fiscal year 2009/2010 budget was finally passed and signed into law by Governor Rendell.
December 16, 2009
Self-Storage Facilities Correctly Valued - Tax Alert! - In an unreported decision, a panel of the Commonwealth Court concluded that certain self-storage facilities were correctly valued for real estate tax purposes based on the actual financial results from the property, since the trial court had found that the properties were optimally managed and a buyer could not reasonably expect to improve the financial performance. Guardian Self Storage WD v. Board of Property Assessment Appeals & Review, No. 119 C.D. 2009 (Pa. Cmwth., Nov. 16, 2009).
December 15, 2009
Investment Loss Disallowed - Tax Alert! - A panel of the Commonwealth Court disallowed a claimed business loss of over $21 million on the grounds that a settlement with the Internal Revenue Service regarding the same loss amounted to an admission that the investment was not made with the intention of making a profit. Hvizdak v. Commonwealth, No. 739 F.R. 2006 (Pa. Cmwlth., Nov. 19, 2009).
December 07, 2009
End-of-Year Estate Planning - Private Client Services Alert! - As we move quickly toward year end, consider the following for this year and for 2010"End-of-Year Estate Planning".
November 17, 2009
Electricity Delivery and Stranded Cost Charges are Taxable - Tax Alert! - The Pennsylvania Supreme Court held that after deregulation of the electricity industry, charges by a distribution company for the transmission of electricity and for stranded costs are taxable for Sales and Use Tax purposes. Spectrum Arena Limited Partnership v. Commonwealth, No. 42 MAP 2008 (Pa. Nov. 5, 2009). This was a hard case, and it made bad law.
October 06, 2009
SEC Approves Amendments to NYSE Rule 452 - Securities Offerings and Regulations Alert! - On July 1, 2009 the U.S. Securities and Exchange Commission (the “SEC”) approved amendments to New York Stock Exchange (the “NYSE”) Rule 452, which governs discretionary voting by brokers in the absence of instructions from the street name shareholder. The amendments eliminate broker discretionary voting for all elections of directors at shareholder meetings, whether contested or not, except for companies registered under the Investment Company Act of 1940.
September 24, 2009
SEC Proposes Amendments to the Investment Advisers Act Custody Rule - Securities Offerings and Regulations Alert! - The U.S. Securities and Exchange Commission (the
“SEC”) is currently reviewing public comments on
proposed amendments to Rule 206(4)-2 (the
“Custody Rule”) under the Investment Advisers Act of 1940 (the “Advisers Act”)1. The amendments are designed to provide additional safeguards under the Advisers Act when an adviser has custody of client funds or securities. The amendments were proposed by the SEC in response to several recent enforcement actions against investment advisers
August 26, 2009
Saved by the Bell: The Financial Viability Exception under Nasdaq and NYSE Amex Rules - Dow Jones Corporate Governance -
August 17, 2009
SEC Director of Enforcement Discusses Changes Within the Division - Securities Offerings and Regulations Alert! - In a speech before the New York City Bar Association on August 5, 2009, Robert Khuzami, the director of the U.S. Securities and Exchange Commission’s (the “SEC”) Division of Enforcement (the “Division”), discussed the restructuring of and changes in operations within the Division, as well as recent enforcement actions that the
Division has initiated. The changes within the Division come in the wake of harsh criticism of the SEC for failing to detect and prevent the Bernard Madoff scandal.
August 07, 2009
FINRA's Trade Reporting Rule Amendments Become Effective - Securities Offerings and Regulations Alert! - On August 3, 2009, amendments to the Financial Industry Regulatory Authority's ("FINRA") trade reporting obligations for over-the-counter ("OTC") equity transactions became effective. The amendments, which the U.S. Securities and Exchange Commission (the "SEC") approved in November 2008, (i) replace the current market maker-based trade reporting structure with an "executing party" structure and (ii) require firms with the trade reporting obligations that are acting in a riskless
August 07, 2009
FTC Again Delays Enforcement of Red Flags Rule - Health Law Alert! - On July 29, 2009, just three days before the effective date of the "Red Flags Rule" (the "Rule"), the Federal Trade Commission ("FTC") announced that it would again delay enforcement of Rule from August 1, 2009 until November 1, 2009. The FTC delayed enforcement to allow it to further educate small business and health care providers about the Rule and what they need to do to comply with its requirements
August 06, 2009
Borrowers and Lenders Coming to Grips with the Pitfalls and Opportunities when Modifying the Terms of Distressed Debt - Tax Alert - According to First American CoreLogic, almost $165
billion of commercial real estate loans will mature in 2009. Trepp LLC, a commercial bond and real estate loan statistician based in New York City and London, reported that another $3.8 billion of commercial mortgage loans were transferred to special servicers in June, increasing the total balance of securitized commercial mortgages under the control of special servicers by 10%, to almost $40 billion. As the per square foot office rents in
August 05, 2009
SEC Makes Short Sale Close-Out Rule Permanent - Securities Offerings and Regulations Alert! - In October 2008, in response to the unusual U.S. market conditions at that time, the U.S. Securities and Exchange Commission (the “SEC”) enacted temporary Rule 204T, which imposed and enhanced delivery requirements on sales of all equity securities, and temporary Rule 10a-3T, which required the reporting of short-sales by certain institutional investment managers.¹ The SEC intended the temporary rules to provide powerful disincentives to persons who might exacerbate
July 24, 2009
Federal Appeals Court Orders SEC to Reconsider Rule 151A Addressing Fixed Indexed Annuities - Securities Offerings and Regulations Alert! - On July 21, 2009 the United States Court of Appeals for the District of Columbia ordered the Securities and Exchange Commission (“SEC”) to reconsider Rule 151A, a rule classifying indexed annuities as securities and subjecting their offer and sale to the federal securities laws. The Court held in American Equity Investment Life Insurance Company, et al. v. Securities and Exchange Commission1, that while indexed annuities can reasonably
July 23, 2009
SEC's Claims Against Mavericks' Cuban Dismissed; Misappropriation Theory of Insider Trading Questioned - Securities Offerings and Regulations Alert! - On July 17, 2009, a U.S. District Judge for the Northern District of Texas dismissed the U.S. Securities and Exchange Commission’s (the “SEC”) insider trading case against Mark Cuban, owner of the Dallas Mavericks; a decision which will affect the way confidentiality agreements between issuers and investors are drafted and may affect the SEC’s application of its misappropriation theory of insider trading liability.
July 09, 2009
New Jersey Enforces Limits on Overpayment Recoveries - Health Law Alert! - The New Jersey Commissioner of Banking and Insurance
issues Enforcement Notice requiring Insurer to cease and
desist from attempting to recoup overpayments based on
improper extrapolations and to reimburse providers for
amounts improperly obtained.
July 07, 2009
Recent Pennsylvania Decision Requires Disclosure of Medicaid Managed Care Rates - Health Law Alert! - Commonwealth Court holds that provider agreements with
Medicaid managed care plans, including the negotiated
payment rates contained in those agreements, are subject to
disclosure under the Pennsylvania Right to Know Law.
June 26, 2009
Denial of Tax Credit is Appealable - Tax Alert! -A panel of the Commonwealth Court held that the denial by the Department of Community and Economic Development of a tax credit claimed under the Neighborhood Assistance Act is appealable. Dijas v. Department of Community and Economic Development, No.1388 C.D. 2008 (Pa. Commw. Apr. 28, 2009). The Act authorizes the Department to grant a tax credit to a taxpayer that contributes to certain approved improvements or programs in needy communities.
June 15, 2009
IRS Answers Questions on Employer-Owned Life Insurance Contracts but Tax Traps Remain - Tax Alert! - The IRS recently issued guidance in connection with employer-owned life insurance contracts (“EOLI”). Notice 2009-48 clarifies a number of administrative questions. It does not eliminate the loss of tax benefits applicable to EOLI or the need to satisfy notice and consent formality in order to quality for exception from these rules. An inadvertent
failure to satisfy the notice and consent requirements could result in the loss of a significant tax exclusion.
June 11, 2009
Recent Pennsylvania Tax Decisions - Tax Alert! -
May 15, 2009
‘Where was the board?’ Where was I? - Directors & Boards - Former directors of Bear Stearns Companies Inc. won a rare early litigation victory in December,
a summary judgment motion exonerating them from liability for their hasty decision to sell Bear
Stearns to JP Morgan Chase in March 2008. Before they got to trial, class action plaintiffs were defeated in their claims that the directors violated their fiduciary duty, despite expert testimony that there were better options than a fire sale price of $10 per share
May 12, 2009
IRS Life Insurance Guidance - Tax Alert! - On May 1, 2009, the IRS issued two revenue rulings to clarify the income tax treatment relating to the surrender, sale and purchase of certain life insurance policies. They are in response to a congressional request for guidance for life settlement transactions in which such life insurance policies are sold to unrelated third parties. However, the principles in the revenue rulings may extend beyond such transactions.
May 08, 2009
Red Flags Rule Enforcement Delayed...Again - Health Law Alert! - On April 30, 2009, the eve of the effective date of the “Red Flags Rule,” the Federal Trade Commission (FTC) announced that it would again delay enforcement of the Rule until August 1, 2009 in order to allow organizations more time to develop and implement written identity theft
prevention programs. The FTC also announced plans to release a template to help entities that have a low risk of identity theft, such as businesses that know their customers personally, comply with the law
April 28, 2009
New Medicare Secondary Payer Requirement: Mandatory Reporting for Liability, No-Fault and Workers Compensation Insurers - Health Law Alert! - The Medicare Secondary Payer law (“MSP”) is again “in the news” for liability (including self-insured), no-fault, and workers compensation insurers. In December 2007, Congress amended the MSP law through Section 111 of the Medicare, Medicaid, and SCHIP Extension Act to impose mandatory reporting requirements on liability, no-fault, and workers’ compensation insurers (collectively referred to as “non-Group
Health Plans” or “Non-GHPs”)
March 26, 2009
New Cancellation of Indebtedness Rule - Tax Alert -
March 20, 2009
The American Recovery and Reinvestment Act of 2009: New Markets Tax Credits Increased by $3 Billion - Health Law Alert! - The American Recovery and Reinvestment Act of 2009
increased the tax credits available under the New
Market Tax Credit program (the “Program”) by $3
billion. The Program provides tax credits to investors or lenders who provide funding to businesses that are primarily located in, derive their income from, and perform services within a low-income community.1 The tax credits allow an
investor or lender to get a 39% tax credit over the first 7 years of the investment,
March 03, 2009
The American Recovery and Reinvestment Act of 2009: Sweeping Changes to HIPAA Put Business Associates in the Spotlight - Health Law Alert! - On February 17, 2009, President Obama signed into law the Health Information Technology for Economic and Clinical Health Act (“HITECH” or the “Act”), as part of the American Recovery and Reinvestment Act of 2009. The Act made
sweeping changes to the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and the Privacy and Security Rules promulgated under HIPAA. This Alert focuses
primarily on Subtitle D of HITECH, which includes important
February 27, 2009
New Codey Legislation to Provide Certainty After a Year of Limbo - Health Law Alert! - On February 5, 2009, the New Jersey legislature
adopted Assembly Bill No. A1933 (the “Bill”), which
amends the New Jersey Health Care Practitioner
Self-Referral Law (commonly referred to as the “Codey Law”).
The Senate adopted an identical bill (S. 787) on December 15,
2008. The Bill currently awaits Governor Corzine’s signature.
February 11, 2009
Tax Planning Opportunity - Tax Alert - The dramatic reduction in short-term interest rates and
the dislocation in the bond market have combined
to create the following investment/income tax
savings/estate planning opportunity.
January 21, 2009
The Plight of the First SOX Whistleblower - Law 360 -
January 01, 2009
Patent-Tailored Medicine, Part Two: Personalized Medicine and the Legal Landscape - Journal of Health & Life Sciences Law - In Part One, the authors addressed the relevance of genetic information, and how race and genetics have affected and may impact the development of medicines, pharmacogenomics, and personalized medicine in the United States. Part Two examines current and proposed federal and state laws and regulations intended to protect individuals from the misuse of genetic information, including uses that discriminate based on genetic...
December 03, 2008
The State Of Unregistered Intermediary Regulation - Law 360 - Law360, New York (December 03, 2008) -- For years, unregistered intermediaries (finders)
in securities transactions have adeptly and, at times, daringly navigated through the maze
of federal, state and self-regulatory rules and regulations. However, recent U.S. Securities and Exchange Commission (SEC) actions and court rulings have reinvigorated long-standing concerns that these finders may be violating securities
laws by failing to register under federal and state
November 19, 2008
End-of-Year Estate Planning - Trusts & Estates Alert! - As we march quickly through the last quarter of 2008, consider
the following for this year and for 2009.
2008 ANNUAL EXCLUSION GIFTS - $12,000
2008 AND 2009 CHARITABLE DONATIONS FROM IRAS
2009 ANNUAL EXCLUSION GIFTS - $13,000
2009 INCREASE IN COMBINED ESTATE AND GIFT TAX
EXCLUSION TO $3.5 MILLION PER PERSON
October 27, 2008
FTC Delays Enforcement of Red Flags Rule - Health Law Alert! -
October 13, 2008
SEC Emergency Orders Related to Short Sales Clarified - Securities Offerings and Regulations Alert! - In unprecedented action, the U.S. Securities and
Exchange Commission (the “SEC”) recently issued
two Emergency Orders (collectively, the “Orders”)
related to short sales. Both Emergency Orders were issued after news broke of the financial crises involving Lehman Brothers, AIG and Merrill Lynch and were prompted by growing concern about the possible unnecessary or
artificial price movements based on unfounded rumors regarding the stability of financial
October 03, 2008
New Pennsylvania Trust Law, New Notice Obligations for Trustees - Trusts & Estates Alert! - On July 7, 2006 the Pennsylvania legislature changed the landscape of Pennsylvania trust law by enacting the Pennsylvania Uniform Trust Act (“Act”). The Act includes many provisions that update, clarify and codify the Pennsylvania law of trusts, taking much of the uncertainty out of
the creation and administration of trusts. The Act also introduces a new requirement for Pennsylvania trustees. The Act requires
trustees to advise the trust beneficiaries of
October 01, 2008
HHS' First Resolution Agreement for Alleged HIPAA Violations and What it Means for You - Health Law Alert! - The Department of Health and Human Services
(“HHS”) has entered into its first resolution
agreement with a covered entity to settle alleged
violations of the Health Insurance Portability and Accountability Act’s (“HIPAA”) privacy and security rules.1 According to HHS, the resolution agreement with Providence Health & Services (“Providence”), a Seattle-based not-for-profit health system, addresses a series
September 05, 2008
SEC Proposes Amendments to the Foreign Broker-Dealer Registration Exemptions in Rule 15A-6 - Securities Offerings and Regulations Alert! - The U.S. Securities and Exchange Commission (“SEC”) recently proposed significant amendments to Rule 15a-6 under the Securities Exchange Act of 1934 (the “Exchange Act”), the rule which provides conditional exemptions from broker-dealer registration to non-U.S. broker-dealers engaged in certain activities involving certain U.S. investors.1 The amendments are intended to update and expand the scope of certain exemptions for foreign broker-dealers .
August 28, 2008
SEC to Replace Edgar with "IDEA" - Securities Offerings and Regulations Alert! - On August 19, 2008 the U.S. Securities and Exchange Commission (“SEC”) unveiled a successor database to the current EDGAR database. The new database, Interactive Data Electronic Applications or “IDEA,” is intended to give investors faster and easier access to key financial information about public companies and mutual funds. Once implemented, IDEA will at first supplement and eventually replace the EDGAR database. The EDGAR database will remain
July 14, 2008
SEC Further Extends Deadline For Non-Accelerated Filers' Compliance With Auditor Attestation Report Requirements of Section 404(b) of Sox - Securities Offerings and Regulations Alert! - On June 26, 2008, the U.S. Securities and Exchange Commission (“SEC”) adopted amendments to the temporary rules that it published on December 21, 20061, requiring non-accelerated filers2 to include in their annual reports pursuant to rules implementing Section 404(b) of the Sarbanes-Oxley Act of 2002 (“SOX”), an
attestation report of their independent auditors on internal control over financial reporting for fiscal years ending on or after December 15,
July 08, 2008
Recent Court and SEC Actions Suggest Heightened Scrutiny for Finders - Securities Offerings and Regulations Alert! - A recent U.S. Securities and Exchange Commission (“SEC”) enforcement action and a recent New York state court decision confirm that individuals that act as “finders” in securities offerings will be the subject of increased scrutiny. A “finder” is a person who acts as an intermediary in a private or public offering of securities for consideration and who does so without compliance with the federal broker-dealer regulatory regime. The SEC action and the
July 07, 2008
FINRA Proposes New Rule to Govern Private Placements - Securities Offerings and Regulations Alert! - On June 5, 2008, the Financial Industry Regulatory Authority, Inc. (“FINRA”) filed with
the U.S. Securities Exchange Commission (“SEC”) a proposed rule change to adopt new Rule 5122, which would impose certain requirements on private offerings made by FINRA members. The proposed rule submitted to the SEC is substantially similar to the one found in Notice to Members (“NTM”) 07-27, which FINRA issued in June 2007;however, in the final rule proposal
June 23, 2008
Supreme Court Weighs in on Scope of False Claims Act - Health Law Alert! - A recent, unanimous decision of the U.S. Supreme Court appears significantly to reduce the
potential liability under the False Claims Act for claims health care providers file with private Medicare and Medicaid managed care organizations, as opposed to with the Medicare and Medicaid fee-for-service programs. Allison Engine Co. v. United States ex rel. Sanders, 553 U.S.___ (No. 07-214, June 9, 2008).
March 18, 2008
SEC Proposes Anti-Fraud Rule For Naked Short Sales - Securities Offerings and Regulations Alert! -
February 04, 2008
Update: Pennsylvania Hospitals to Pay For Medical Mistakes – Quality of Care At The Forefront - Health Law Alert! - Prevention of medical mistakes is a cause celebre, and states are beginning to jump
on the so-called “never event” bandwagon. Taking a highly proactive stance,
Governor Edward G. Rendell recently announced that Pennsylvania acute-care
general hospitals will not be reimbursed by the state Medicaid program for services
resulting from medical errors. On January 14, 2008, Pennsylvania became just the
December 20, 2007
SEC Adopts Amendments to Rules 144 and 145 - Securities Offerings and Regulations Alert - On November 15, 2007 the U.S. Securities and Exchange Commission (the “SEC”)
adopted significant amendments to Rules 144 and 1451, rules that had not been substantively
revised since 1997. The amendments (“Amendments”), which the SEC adopted
substantially in the form proposed, are designed to increase the liquidity of privately sold
securities and decrease the cost of capital for all issuers without compromising investor
November 01, 2007
SEC Proposes Reform of Regulation D Private Offering Exemptions and Provides Guidance on the Integration Safe Harbor - Securities Offerings and Regulations Alert - On August 3, 2007 the U.S. Securities and Exchange Commission (the “SEC”)
issued a release (the “Release”) in which it proposed amendments to Regulation D to provide additional flexibility to issuers and to clarify and improve the application of existing provisions of Regulation D.1
September 25, 2007
Pending Changes to the Stark Law Phase III - Health Law Alert - On September 5, 2007, the Centers for Medicare & Medicaid Services (CMS)
published its long-awaited Phase III regulations regarding the federal ban on
physician self-referrals, more commonly known as “Stark.” CMS claims that the
Phase III Stark regulations, effective on December 4, 2007, will reduce the
regulatory burden on the health care industry, “simplify” the rules and provide
July 10, 2007
Summer 2007 - Business Law Observer -
June 11, 2007
The Wired City Building - New York Law Journal -
June 04, 2007
SEC Proposes Amendments to Capital Raising & Reporting Rules for Smaller Companies & Approves Guidance on Compliance with Section 404 of SOX - Securities Offerings and Regulations Alert - 06/04/07 - On May 23, 2007, the U.S. Securities and Exchange Commission (SEC) proposed a series of measures aimed at modernizing and improving certain requirements with respect to the capital raising and reporting requirements for smaller companies.
May 07, 2007
SEC Adopts Amendments to the Proxy Rules for Electronic Delivery of Proxy Materials - Securities Offerings and Regulations Alert - 05/07/07 - The Securities and Exchange Commission (SEC) has adopted amendments to the proxy rules under the Securities Exchange Act of 1934, as amended
April 25, 2007
SEC Broadens Definition of "Covered Securities" - Securities Offerings and Regulations Alert - 04/25/07 - On April 18, 2007, the U.S. Securities and Exchange Commission (the "SEC") adopted an amendment to Rule 146 of the Securities Act of 1993, as amended (the "Securities Act", to designate securities listed or authorized for listing on the Nasdaq Capital Market
March 20, 2007
Compliance Issues – Fraud and Fraud and Abuse - Leadership Health Care Spring 2007 Conference -
March 20, 2007
SURVEY AND ENFORCEMENT IN LONG TERM CARE - Leadership Health Care Spring 2007 Conference -
March 20, 2007
HIPAA – Current Issues & Implications for Nursing Homes - Leadership Health Care Spring 2007 Conference -
March 20, 2007
Medicare & Medicaid Issues - Leadership Health Care Spring 2007 Conference -
March 20, 2007
Litigation - Leadership Health Care Spring 2007 Conference -
March 10, 2007
Section 28(E)of the Securities Exchange Act of 1934 (the Exchange Act) establishes a safe harbor that allows money managers to use client funds to purchase brokerage and research services for their managed accounts under certain circumstances.
January 22, 2007
SEC Amends Voluntary E-Proxy Rules and Proposes Mandating Distribution by E-Proxy - Securities Offerings and Regulations Alert - 01/22/07 - At a public meeting held on December 13, 2006 the U.S. Securities and Exchange Commission (the
"SEC") adopted amendments to the proxy rules governing the voluntary electronic delivery of proxy
materials and proposed further changes to the rules that would require electronic delivery of proxy materials
January 01, 2007
Internet Prescribing: It’s Fast and Easy, But Is It Legal? - ANDREWS LITIGATION REPORTER - The Internet pharmacy industry is booming and apparently will only get bigger, unless, that is, the federal government decides that prescriptions written without a face-to-face meeting between the physician and patient are invalid. Given its recent enforcement efforts, the government may well be headed in that direction.
December 26, 2006
SEC's New Interpretation of Rule 415 Severely Limits Use of Pipes - Securities Offerings and Regulations Alert - 12/26/06 - Private Investment in Public Equity (“PIPE”) transactions are private placements of equity securities
or convertible debt securities by public companies generally made to accredited investors, followed by the
prompt filing with the U.S. Securities and Exchange Commission (the “SEC”) of a registration statement to
cover the resale of those securities.
December 21, 2006
SEC Provides Smaller Companies and Newly Public Companies Further Relief from Section 404 Requirements - Securities Offerings and Regulations Alert - 12/21/06 - On December 15, 2006 the U.S. Securities and Exchange Commission (the “SEC”) issued a release
in which it adopted an extension proposed in August to further postpone the date by which smaller public
companies and newly public companies must comply with Section 404 of the Sarbanes-Oxley Act of 2002
December 08, 2006
SEC's No-Action Relief Provides Guidance on the Finder Exception to Broker-Dealer Registration - Securities Offerings and Regulations Alert - The U.S. Securities and Exchange Commission (“SEC”) staff issued its first guidance on the finder
exception to the broker-dealer registration requirement under Section 15 of the Securities and Exchange Act
of 1934 (the “Exchange Act”) since March 2000 when it revoked a previously issued no-action letter.
November 20, 2006
NASDAQ Proposes Change to Independent Director Definition - Securities Offerings and Regulations Alert - 11/20/2006 - On October 6, 2006 The NASDAQ Stock Market LLC “Nasdaq”) filed with the U.S. Securities
and Exchange Commission (“SEC”) a proposed rule change to Rule 4200(a)(15)(B) and IM-4200 to
modify Nasdaq’s definition of “independent director.”1 The proposed change would increase the direct payment test under the “independent director” definition from $60,000 to $120,000.
November 06, 2006
Fall 2006 - Business Law Observer -
October 24, 2006
AMEX, NYSE, and NASDAQ Mandate Direct Registration System Eligibility - Securities Offerings and Regulations Alert - The Direct Registration System ("DRS") which is operated by The Depository Trust Company ("DTC") allows an investor to have securities registered in his name without having a securities certificate issued to him.
October 16, 2006
NYSE and NASD Propose Rule Changes to Amend Certain Research Analyst Rules - Securities Offerings and Regulations Alert! - On September 27, 2006 the New York Stock Exchange (“NYSE”) and the National Association of
Securities Dealers, Inc. (“NASD”) each filed with the U.S. Securities and Exchange Commission (“SEC”)
two proposed rule changes relating to their respective research analyst rules; NYSE Rules 472 and 344
and NASD Rules 1050 and 2711. The amendments proposed by the NYSE differ only slightly from those
proposed by the NASD. A summary of the proposed amendments follows.
September 01, 2006
Using Mental Health Records for Research - Compliance Today - The Health Insurance Portability and Accountability Act’s Privacy Rule (the “Privacy Rule”) strikes a balance between restricting the unauthorized disclosure of medical records and permitting health care providers to operate effectively, including participation in research studies. Specifically, the Privacy Rule takes into account that getting patient authorization for a disclosure can be problematic for researchers who do not interact directly with
August 16, 2006
SEC Proposal Grants Relief from SOX 404 Compliance to Smaller Public Companies and Foreign Private Issuers - Securities Offerings and Regulations Alert! -
August 11, 2006
SEC Adopts Changes to Disclosure Requirements for Executive Compensation and Related Matters - Securities Offerings and Regulations Alert! -
August 08, 2006
The Deficit Reduction Act of 2005 Imposes New Obligations On Medicaid Providers By January 1, 2007 - Health Law E-lert! -
July 05, 2006
Hedge Fund Rule is Arbitrary According to U.S. Court of Appeals - Securities Offerings and Regulations Alert! -
June 21, 2006
Issues in Mergers and Acquisitions - Preparing Your Business for Sale -
February 23, 2006
SEC Proposes Amendments to Significantly Alter Executive Compensation and Related Disclosure Requirements - Securities Offerings and Regulations Alert! -
February 23, 2006
HIGHLIGHTS OF THE DEFICIT REDUCTION ACT OF 2005 - Health Law E-lert! -
January 04, 2006
An Overview of Key Amendments to the Bankruptcy Code - The Bankruptcy Abuse and Consumer Protection Act of 2005 -