BLT: July 2016

     

    Articles

    Business & Corporate

    The Next Stage of Social Entrepreneurship: Benefit Corporations and the Companies Using This Innovative Corporate Form

    Michael Vargas

    Benefit corporations are a new corporate entity, built on top of the existing corporate law. Before you can delve into the important and difficult questions that have emerged in the wake of this revolutionary development, you first need to understand what they are and which clients might find them appealing. This article is a primer on benefit corporations and the entrepreneurs who use the benefit corporation entity to build their companies.

    Business & Corporate

    Mastering the Benefit Corporation

    John Montgomery

    If you’d like to become expert in the newest evolutionary corporate form—the benefit corporation—and master the delicate board and stockholder politics that arise when your clients adopt this new entity, then this article is for you. Montgomery provides the historical context for the benefit corporation so that you can position your practice to profit from clients shifting to a more responsible and sustainable approach to business.

    Taxation

    The Use of Benefit Corporations by Charitable Organizations

    Kimberly A. Lowe

    Charitable organizations are not prohibited from undertaking profit generating activities and the benefit corporation entity form is a good option to consider when charitable organizations are structuring these activities. This article will discuss the business and tax issues an experienced business law practitioner should consider when structuring earned revenue options for charitable organizations and consider how the benefit corporation entity form fits into these structuring activities.

    Business & Corporate

    Understanding and Improving Benefit Corporation Reporting

    J. Haskell Murray

    A majority of states have passed benefit corporation statutes, and proponents have touted the social reporting requirements as one of the statutes’ distinguishing improvements on traditional corporate law. This article shares early data showing benefit corporation reporting compliance rates below 10 percent, highlights deficiencies in the substantive reporting requirements, and offers suggestions for improving the current benefit corporation reporting framework.

    Business & Corporate

    The Capital Markets and Benefit Corporations

    Frederick H. Alexander

    Many states have adopted a new corporate statute that authorizes benefit corporations. This article explains how new forms broaden the nature of fiduciary duties to include stakeholders and shareholders, and how those broadened duties can fit into the capital markets. Alexander also explains how new forms are getting into public markets, and how lawyers can be prepared to guide clients interested in using the new structure.

    Business & Corporate

    FinCEN’s Lack of Policies and Procedures for Assessing Civil Money Penalties In Need of Reform

    Robert B. Serino

    For many years, the federal banking agencies have used publicly available processes, procedures, and matrices to determine both whether a Civil Money Penalty is justified and, if so, the size of the penalty. However, the Financial Crimes Enforcement Network has no publicly disclosed CMP matrix or procedures to determine either a penalty is warranted or, if so, the appropriate amount. Serino demonstrates the urgent need for FinCEN to bring its CMP assessment process into alignment with other regulators.

    Business & Corporate

    Practical Tips for Regulatory Compliance with a Company Jet

    Michelle Wade

    If your client owns or operates or plans to purchase a business aircraft, it is important to understand that aviation is a highly regulated industry where the requirements of various government agencies are often at odds with each other and with certain of the client’s goals. This article outlines basic ownership and operating options available to aircraft owners, and common pitfalls to avoid when selecting and implementing these options, to help your client achieve regulatory compliance.

    Departments

    Business & Corporate

    KEEPING CURRENT: SEC Enforcement Heightens Concern over Broker-Dealer Registration for Private Equity Firms

    The Securities and Exchange Commission recently announced it had settled charges for alleged unregistered brokerage activity and other alleged securities law violations with private equity fund advisory firm Blackstreet Capital Management. The enforcement action, in which a general partner was found to have improperly acted as an unregistered broker-dealer after earning a success fee on portfolio transactions that BCM brokered in-house, signals the SEC’s increasing scrutiny of sponsors and managers engaging in similar activities.

    Business & Corporate

    DELAWARE INSIDER: In re Appraisal of Dell Inc.: The Continuing Relevance of Deal Price in Delaware Appraisal Proceedings

    The Delaware Court of Chancery has often found that the consideration received in a merger to be the best evidence of fair value in appraisal proceedings, but in a recent appraisal decision, the Court of Chancery rejected the deal price in the management-led buyout of Dell Inc. and held that the fair value for Dell Inc. was 28 percent higher than the deal price received by the public stockholders.

    Business & Corporate

    MEMBER SPOTLIGHT: An Interview with Kenneth J. Bialkin

    Kenneth Bialkin is synonymous with leadership in American business, law, and the Jewish community. Of counsel at Skadden Arps, Slate, Meagher & Flom, Bialkin has spent a lifetime building a thriving corporate and securities law practice, and, at the same time, serving as chairman to some of the top Jewish organizations. He’s served on numerous committees at the ABA and advisory committees of the Securities and Exchange Commission, the New York Stock Exchange, and the American Stock Exchange. In his legal career, he has been involved in some of the largest insurance company mergers and acquisitions in the United States.