BLT: December 2016

     

    Articles

    Business & Corporate

    A New Look At Fraudulent Transfer Liability In High Risk Transactions

    Recent cases (most importantly, a 2016 circuit-splitting decision by the Seventh Circuit) may signal that the pendulum is swinging away from the historical difficulty in recovering constructive fraudulent transfers in connection with failed LBOs and leveraged recaps; as well as raising ethical, discovery, and dischargeability issues in connection with “actual intent” fraudulent transfers. This article explores these cases and the history and policy considerations that led to them.

    Business & Corporate

    Sustainability Meets Integrity

    John H. Stout

    “Business sustainability” has become an important addition to board/management discussions in recent years. “Business sustainability” focuses on a company’s ability to conduct its activities and build shareholder value over the long term, balancing the need for short-term results while adapting business strategies and operations to assure long-term value creation consistent with sustainable business practices. Inherent in meeting these challenges, companies are required by law to maintain a culture that embraces ethical values and legal compliance.

    Business & Corporate

    Buying Assets in Bankruptcy: Has the Second Circuit Taken the Wind Out of Sales Free and Clear?

    Jeanne P. Darcey

    This article reviews the Second Circuit’s decision in the General Motors case and the propriety of a “free and clear” sale order with respect to claims held by parties who did not receive actual notice of the bankruptcy sale. In the underlying decision of the Bankruptcy Court, Judge Gerber determined that although certain claimants did not receive actual notice of the sale, their arguments were similar to parties who had filed objections to the sale, which were overruled. He found, therefore, that those claimants were not prejudiced by the lack of notice. The Second Circuit determined otherwise, and held that such claimants, having been denied any seat at the table, were prejudiced by the lack of notice and consequently, the sale to “New GM” could not be free and clear of such claims.

    Business & Corporate

    Top 10 Things Every Business Lawyer Should Know about Bankruptcy

    Every business lawyer needs a basic understanding of bankruptcy law. Your client can be affected by a bankruptcy in many ways: it may be a creditor in a bankruptcy case; it may need or want to do business with a trustee or debtor in a bankruptcy case; or it may be a defendant in a preference action or other bankruptcy litigation, among other possible scenarios. Your client also may face financial distress and need to explore restructuring or wind-down options, including filing for bankruptcy. A business lawyer needs to understand the basics to address common bankruptcy issues that arise in business matters.

    Business & Corporate

    The Interplay between Corporate Governance Issues and Litigation: What Is Corporate Governance and How Does It Affect Litigation?

    This article explains what is encompassed by the term “corporate governance” and discusses how plaintiff and defendant positions in litigation can be affected by an organization’s governance structures, processes and business conduct. Three cases are presented illustrating the determination of liability, causation, and damages in complex commercial litigation and in a Securities Fraud Action and the impact that corporate governance issues and knowledge had on the outcome.

    Business & Corporate

    Entity Lifecycles: An Overview of the Statutory Requirements Relating to the Formation, Maintenance, and Termination of Delaware Corporations, Limited Liability Companies, and Statutory Trusts

    Shannon S. Frazier

    Selection of a business entity is one of the most fundamental and important decisions a business lawyer and her client can make. Delaware is generally recognized as the premier jurisdiction for business formation, and offers a variety of entities, each with different characteristics, which may be formed to meet the needs of the enterprise and to organize the relationship among owners, creditors, and management. Therefore, it is imperative to the selection process that all parties involved possess a basic understanding regarding the lifecycles of the most common Delaware business entities. This article provides a brief overview of the fundamental requirements relating to the formation, maintenance, and termination of Delaware corporations, limited liability companies, and statutory trusts.

    Business & Corporate

    Website Accessibility for Persons with Disabilities: The Why & How

    Meredith Mays Espino

    Despite one in five Americans having a disability, website owners and developers neglect to make their websites accessible to persons with disabilities. The courts are split as to whether websites are places of public accommodation and if they need to be accessible. The preferred standard for accessibility is WCAG 2.0, a standard developed by the World Wide Web Consortium, which provides that websites must be perceivable, operable, understandable, and robust. This article discusses current legal posture of website accessibility requirements and an overview of the WCAG 2.0 guidelines to make your clients’ websites accessible.

    Taxation

    What Non-Californians Need to Know about California Taxes

    Robert W. Wood

    Taxes can be a major factor in business and personal decisions. And it is only natural to think primarily about federal taxes. But state taxes can be big too, and few are bigger than California’s. Surprisingly, even if you are not a resident of California, you may have reason to deal with California’s tax agencies. California’s tax rules are complex, and California’s taxing agencies are notoriously strict when it comes to enforcement. The exposure can be surprisingly big and surprisingly long, as this dive into California taxes for non-Californians makes clear.

    Departments

    Business & Corporate

    KEEPING CURRENT: HR Professionals Beware: Antitrust Violations in the Employment Arena May Subject Employers and their HR Personnel to Criminal Prosecution

    The Antitrust Division of the Department of Justice and the Federal Trade Commission recently announced a policy shift in their enforcement priorities related to agreements among competing employers. Specifically, the agencies expressed the DOJ’s intent to criminally prosecute employers and individuals who enter into naked wage-fixing or no-poaching agreements with other employers. As a result of this announcement, all companies that compete for employees should review their compliance programs.

    Business & Corporate

    DELAWARE INSIDER: Don’t Let the Name Fool You: Delaware Statutory Trusts are Controlled by Contract

    Michael S. Swoyer

    In Grand Acquisition, LLC v. Passco Indian Springs DST, the Delaware Court of Chancery was presented with a rare opportunity to address the contractual freedom granted to parties under the DSTA. This article discusses the policy of maximum freedom of contract shared by the DSTA, the Delaware Limited Liability Company Act, and the Delaware Revised Uniform Limited Partnership Act. It also examines the Court of Chancery’s decision in Grand Acquisition and provides several key takeaways.

    Business & Corporate

    MEMBER SPOTLIGHT: An Interview with Justice Henry duPont Ridgely

    After more than 30 years of service as a jurist in the Delaware Judiciary, Justice Henry duPont Ridgely is a walking library of Delaware business law decisions. During his tenure on the Supreme Court of Delaware, he participated in more than 700 published opinions. During his leadership of the Delaware Superior Court, Delaware was first recognized by the U.S. Chamber of Commerce as first among the 50 states for the fairness and reasonableness of its litigation environment. Delaware is still number one today. Now he is Senior Counsel at DLA Piper in Wilmington, Delaware, and a Business Law Advisor to the Business Law Section.