BLT: January 2021

     

    Featured Articles

    Business & Corporate

    Analysis of the IP Representations in the NVCA Form—Considering Necessary Revisions

    Stephen T. Kong

    The National Venture Capital Association (NVCA) model stock purchase agreement form (Model Form) was recently updated in August 2020. After reviewing the updates to the intellectual property related sections of the Model Form, certain language and concepts regarding allocation of intellectual property risk could be revised to better reflect the NVCA goals of providing fair terms between the investor and the company and promoting consistency among financing terms.

    Business & Corporate

    Treatment of Deductibles and Self-Insured Retentions in Bankruptcy

    Margaret M. Anderson

    Restaurants and retail stores often face a large number of tort claims seeking relatively small amounts in damages, e.g., the twisted ankle allegedly caused by the wet spot on the floor, or the burned hand caused by the waiter missing the cup when pouring the coffee. Retail establishments and restaurants frequently choose to have some form of self-insurance rather than pay the high premiums that would be charged by an insurance company for insuring a large number of small claims. They buy insurance to cover only larger claims. How tort claims are treated in a retail bankruptcy case depends on the type of coverage the debtor has purchased. This article will discuss the various forms of coverage available and how the form of coverage impacts the treatment of the claims.

    Business & Corporate

    Embedding Equality, Diversity, and Inclusion

    Alan S. Gutterman

    We have been discussing the need for businesses to make public commitments to support equality, diversity, and inclusion (EDI).[1] These three related concepts are essential to a productive and happy workforce and a fair and just society for everyone. Equality comes from equal access to opportunities, free of discrimination. However, the full range of opportunities will only be available when there is respect for diversity and a willingness to include everyone in decisions regarding their lives. A related concept is social justice, which has been described as fair and just relations between an individual and society at large, as measured by the distribution of wealth opportunities for personal activity and social privileges.

    Business & Corporate

    Recent Tax Shelter Disclosure Requirements in Mexico and Argentina

    Thomas F. Morante, Yani R. Contreras

    Emboldened by new laws, tax authorities worldwide are ramping up efforts to require tax advisors and taxpayers to provide enhanced information regarding tax schemes. Armed with additional disclosures, authorities are becoming more knowledgeable about the risk of abuse in tax shelters and transactions designed to minimize or possibly avoid taxes. This global trend has been embraced in Latin America.

    Business & Corporate

    Six Things Creditors Should Know About the New Federal Debt Collection Rule

    Susan Manship Seaman

    Nearly five years after starting rulemaking efforts, the Consumer Financial Protection Bureau (“CFPB”) has finalized part one and part two of its debt collection rule under the federal Fair Debt Collection Practices Act (“FDCPA”).[1] The federal rule (known as Regulation F) becomes effective on November 30, 2021.[2] Regulation F is the first regulation to implement substantive provisions of the FDCPA since the law was enacted in 1977. In addition to regulating third-party debt collectors subject to the FDCPA, Regulation F has a number of implications for creditors. This article highlights six points that creditors should know about Regulation F. This list is not exhaustive.

    Business & Corporate

    Nasdaq Proposes New Diversity Rule Requiring Nasdaq-Listed Companies to Diversify Their Boards or Risk Delisting

    John Mark Zeberkiewicz, Ryan A. Salem

    Recent events have spurred a social justice movement that has called for companies to commit to inclusion and diversity, specifically in the composition of their boards of directors.* In light of the foregoing, on December 1, 2020, Nasdaq filed a proposal with the U.S. Securities and Exchange Commission (“SEC”) that, if approved by the SEC, would condition a company’s continued listing on Nasdaq’s U.S. exchange on the satisfaction of certain board diversity and disclosure requirements. In proposing this rule, Nasdaq conducted its own internal study on the diversity of Nasdaq-listed companies, including a review of more than two dozen third-party studies on the effects of board diversity. Nasdaq concluded that a positive correlation exists between diverse boards and improved corporate governance and financial performance.

    Business & Corporate

    Special Purpose Acquisition Company (SPAC) Transactions in the Fintech Sector

    Jonathan Cardenas

    Public listings through reverse mergers with special purpose acquisition companies (SPACs), commonly referred to as “backdoor listings,” have returned to the capital markets spotlight and are being utilized at record-breaking levels as an expedited alternative to traditional initial public offerings (IPOs).[1] Often referred to as “blank check companies,” SPACs are publicly traded shell corporations that raise capital through an IPO of the SPAC (a SPAC IPO) in order to subsequently acquire and take public a separate privately held target company in what is commonly referred to as either a SPAC merger, a “De-SPAC” transaction or an initial business combination transaction (a SPAC IBC).

    Business & Corporate

    The Presumption of Suitability Under the Uniform Limited Offering Exemption

    Robert J. Usinger, Jr., Barry R. Temkin

    Alternative investments are back in the news. The Massachusetts Securities Division has announced an investigation of broker-dealers selling oil and gas and car dealership limited partnerships, and has issued subpoenas to sixty-three firms selling the private placements.[1],[2] The Financial Industry Regulatory Authority (FINRA) and Securities and Exchange Commission (SEC) have announced similar inquiries, which are still underway.[3] In May 2020, the Massachusetts Securities Division filed formal charges against GPB Capital Holdings, LLC. GPB, a complex network of car dealerships, waste carting, and oil and gas limited partnerships, is alleged to have raised $1.5 billion based on false and misleading offering statements.

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