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BLT: January 2013

Using Limited Liability Company Interests and Limited Partnership Interests as Collateral

Feature Articles

Using Limited Liability Company Interests and Limited Partnership Interests as Collateral

This article will describe (1) the methods of perfecting a security interest in equity interests in alternative entities, (2) mistakes practitioners often make when using equity interests in alternative entities as collateral, and (3) a few helpful tips for practitioners to keep in mind when using equity interests in alternative entities as collateral.

The SEC announced charges against eight former members of the board of directors of several closed-end and open-end registered investment companies. The case is noteworthy for the specificity of the allegations against the board members, and provides insight into how the SEC's enforcement division will pursue cases against fund directors in the future. Also, the form and substance of the allegations may broadly affect how fund directors carry out their fair valuation responsibilities.

Many due diligence reviews in mergers, acquisitions, and investments have ignored the issue of independent contractor misclassification liability. In view of the crackdown by federal and state governments on the misclassification of employees as ICs, due diligence efforts should not overlook this often hidden exposure.

Companies preparing their 2013 proxy statements and other periodic reports should keep in mind some recent changes and other developments that may affect their disclosures in these documents.

The Delaware Court of Chancery has recently had a variety of rulings on the validity of “Don’t Ask, Don’t Waive” provisions.

An interview with Donald Parsons.

This month’s Inside Business Law focuses on the Private Equity and Venture Capital Committee, Cyberspace Law Committee and a new edition of Blue Sky Bugle.

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