Friday, September 21, 2018

The Assassination of Flavias Aetius


The Assassination of Flavias Aetius


      Flavias Aetius was the Roman commander at the Battle of Chalons (451), where along with forces of the Visigothic Empire, it under the command of its King, Theodoric , the Huns under Attila were defeated.  Flavias  had been appointed magister militum (essentially “supreme commander” of all Roman military forces) by Valentinian III, a particularly weak (and in this era that is saying something) emperor.  While Boethius is oft identified as the last gasp of the Roman Empire’s (or at least its western components’) intellectual life, Flavius Aetius can equally be described as the last of the great western Roman generals.  Gibbons called him the Last of the Romans.

 
      Only three years after Chalons on September 21, 454, Aetius was assassinated by Valentinian.  Within the year, Valentinian would in turn be assassinated by friends of Aetius while Valentinian’s guard watched; the members of the guard had been followers of Aetius.

Tuesday, September 11, 2018

Is an LLC a “Person”?


Is an LLC a “Person”?

 
 
      Whether a LLC will be treated as a “person” is context dependent. For example, in United States v. Human Services Associates, LLC, 216 F. Supp. 3d 841 (W.D. Mich. 2016), it was held that an LLC is not a “person” within the meaning of the Criminal Justice Act entitling the LLC to appointed counsel. In contrast, it was found, in In Re M-I L.L.C., 505 F. Supp. 3d (Tx. 2616), that an LLC is a “person” for purposes of the 14th Amendment due process clause. In contrast, American Rebel Arms, L.L.C. v. New Orleans Hamburger and Seafood Company, 186 So. 3d 1220 (La. Ct. App. 5th Cir. 2016),  it was held that a LLC is not a “person” to whom a merchant owes a duty to keep a facility reasonably safe.

Saturday, September 8, 2018

Agenda for the 2018 LLC Institute


 

LLCs, Partnerships and Unincorporated Entities Committee
2018 LLC Institute
October 11 – 12, 2018
Agenda

Thursday, October 11, 2018
 
7:20 a.m. - 8:00 a.m.
Breakfast (included in registration)
8:00 a.m. - 8:15 a.m.
Welcome; Housekeeping
8:15 a.m. - 10:15 a.m.
Program (2 hrs.) Case Law Update (Non-Delaware)

Prof. Elizabeth “Beth” Miller (Baylor Law School, Waco, Texas); Kelley Bender (Chapman & Cutler, Chicago, Illinois); Sean Ducharme (Hunton & Williams LLP, Richmond, Virginia); and Dan Sheridan (Stark & Stark, Lawrenceville, New Jersey)
This panel will discuss recent LLC and partnership cases other than from Delaware on various topics of significance, including cases dealing with fiduciary duties and veil piercing and cases illustrating pitfalls in drafting operating agreements.
 
10:15 a.m. - 10:30 a.m.
Break
10:30 a.m. - 12:00 p.m.
Program (1.5 hrs.) Tax & Choice of Entity

Moderator: Robert R. Keatinge (Holland & Hart, Denver, Colorado) Panelists: Bahar A. Schippel (Snell & Wilmer LLP, Phoenix, Arizona); Sam Kamyans (Baker & McKenzie, LLP, Washington, D.C.)
This panel will discuss the impact of recent tax developments on the choice of form and structure of business organization for a new or existing firm. Among the topics considered will be the comparative tax efficiencies of partnerships, S corporations, C corporations, and sole proprietorships considering changes in rates, the new deduction for qualified business income, and other tax changes; the rules applicable to employment and self-employment income and the net investment income tax; the impact of the change in the taxation of profits interests; and the effect of the new rules on firms engaged in different types of activities such as investment, personal services, and  capital intensive trades and businesses.

12:15 p.m. - 1:30 p.m.
Luncheon (included in registration)
 
Keynote address by Dana L. Trier (Davis Polk & Wardwell; Former Deputy Assistant Secretary for Tax Policy in the U.S. Treasury Department (2017-18))
1:30 p.m. - 3:30 p.m.
Program (2 hrs.)   Recent Tax Law Changes
Johnny Lyle (Adams and Reese LLP, Mobile, Alabama); Cristin Conley Keane (Carlton Fields P.A., Tampa, Florida); Sarah E. Ralph (Skadden, Arps, Slate, Meagher & Flom LLP,  Chicago, Illinois)
This panel will discuss issues affecting LLC practitioners due to recent tax law changes. Among the topics addressed will be direct and indirect impacts of provisions found in the Tax Cuts and Jobs Act and other recent tax legislation and guidance including (1) changes to 1031 like/kind exchange rules, partnership technical terminations, partnership basis rules, and nonshareholder contributions to capital, and (2) new provisions such as Qualified Opportunity Zones. The panel will also discuss drafting considerations created by the partnership income tax audit rules that went into effect January 1, 2018.
 
3:30 p.m. – 3:45p.m.
Break
3:45 p.m. - 5:30 p.m.
Program (1.75 hrs.) Beneficial Ownership Reporting

Garth Jacobson (CT, a Wolters Kluwer business, Seattle, Washington); Cari Stinebower (Crowell & Moring LLP, Washington, DC); Kevin L. Shepherd (Venable LLP); US Senator Sheldon Whitehouse (invited); Sarah Runge, Credit Suisse, (recently retired Director, Office of Strategic Policy, Terrorist Financing and Financial Crimes US Dept. of Treasury)  Howard Mendelsolm, Chief Client Officer Kharon  (Formerly with US Dept of Treasury 2001 - 2011)

 

This program will address the issues and latest legislative developments related to business entity beneficial ownership disclosure. This is a chance to learn the latest on this hot topic about anti-money laundering efforts and stopping terrorist financing while balancing the interests of entrepreneurs and business entities.
 
6:00 p.m. - 7:00 p.m.
Cocktail Hour – Cash Bar
7:00 p.m. - 9:00 p.m.
Lubaroff Award Dinner - (this event is a separately ticketed event - obtain through the registration process)
 
Friday, October 12, 2018
 
7:30 a.m. - 8:00 a.m.
Breakfast (included in registration)
 
8:05 a.m. - 10:05 a.m.
Program (2 hrs.) Delaware and Bankruptcy Case Law Update
Lou Hering (Morris, Nichols, Arsht & Tunnell LLP, Wilmington, Delaware); Tammy Mercer (Young Conaway Stargatt & Taylor, LLP, Wilmington, Delaware); James J. Wheaton (Boston University School of Law, Boston, Massachusetts)
This panel will discuss recent LLC and partnership cases from Delaware on various topics of significance, including cases dealing with fiduciary duties, the implied covenant, dissolution and cases illustrating pitfalls in drafting operating agreements. Jim Wheaton will provide an update on recent bankruptcy decisions of interest.

10:05 a.m. - 10:15 a.m.
 
Break
10:15 a.m. – 12:15 p.m.
Program (2 hrs.) Derivative Actions
Moderator: Warren Kean (Shumaker, Loop & Kendrick, LLP, Charlotte, North Carolina)
Panelist: Professor Deborah DeMott (Duke); Brock Czeschin (Richards Layton & Finger, Wilmington, Delaware)
This panel will discuss the history of derivative actions and their pre-emptive application in the context of limited liability companies and partnerships, particularly with respect to the legal standing of members to bring legal and equitable claims for the alleged breach of an LLC’s operating agreement (or the partnership agreement of a partnership).  Another case of unmindful “corporification” of LLCs and partnerships?  The panel will explore the fundamental differences between corporations and LLCs/partnerships particularly under Delaware law (and similar, contractarian law of LLCs of other states), how those fundamental differences may be being overlooked by lawyers and judges when determining the standing of members to seek redress for other members and those who manage LLCs, and how matters concerning direct and derivative claims should be addressed in operating and partnership agreements.
 
12:15 p.m. - 12:45 p.m.
Luncheon: Working Committee Meeting (included in registration)
12:45 p.m. - 2:45 p.m.
Program (2.0 hrs.) Ethics: The Top 15 Things Your Ethics Counsel-Risk Manager Hope You Know (and Hopefully Remember)
A.J. Singleton (Stoll Keenon Ogden PLLC, Lexington, Kentucky); Professor Nancy J. Moore (Boston University School of Law, Boston, Massachusetts)
This panel will discuss “The Top 15 Things Your Ethics Counsel-Risk Manager Hope You Know (and Hopefully Remember)”  No matter how long we’ve practiced, we all need reminders.  This program will identify some of the recurring legal ethics issues that practicing attorneys face, and will provide some practical solutions along the way.  It will also show how compliance with the Rules of Professional Conduct is also good risk management. 
 
2:45 p.m. – 3:00 p.m.
Break
3:00 p.m. - 4:30 p.m.
Program (1.5 hrs.) Charging Orders
Jay Adkisson (Las Vegas, Nevada)  
Panelists: Lou Conti (Holland & Knight LLP, Tampa, Florida); Diana Espanola (Espanola Law, LLC, Cambridge, Massachusetts); John L. Williams (Williams Law Firm, Wilmington, Delaware); Thomas E. Rutledge (Stoll Keenon Ogden PLLC, Louisville, Kentucky); Lisa Jacobs (DLA Piper, Philadelphia, Pennsylvania)
This panel will discuss hot-topics in LLC charging order law, including procedural issues, representing the LLC in charging order situations, the LLC member in bankruptcy, and tax issues arising from the charging order and foreclosure from the viewpoints of the debtor, the creditor, and the LLC.
4:30 p.m. - 5:00 p.m.
Wrap-Up

Thursday, September 6, 2018

Yet Another Court Holds That An LLC Must Be Represented By An Attorney

Yet Another Court Holds That An LLC Must Be Represented By An Attorney

      Continuing a long string of decisions, in a recent decision, the Louisiana Court of Appeals held that an LLC must be represented by legal counsel and may not be represented by its sole member. In Re The Rouge House, LLC, 246 So.3d 580 (La. Ct. App. 4th Cir. 2018).
      In this instance, the member of an LLC sought to appeal the denial of a liquor license to her wholly owned LLC. Rejecting her ability to do so, the court wrote:
Rouge House, as a limited liability company, is a separate and distinct entity from Riley. Riley cannot represent Rouge House on appeal, as she is not an attorney. Instead, Rouge House must be represented by counsel.

Wednesday, September 5, 2018

Are You At Risk of Administrative Dissolution?


Are You At Risk of Administrative Dissolution?

      If your corporation, LLC or other business entity has not filed its 2018 annual report with the Kentucky Secretary of State, it is subject to being administratively dissolved. That dissolution will take place on September 10 unless the annual report is filed.
      Completing the annual report will take just a few minutes; it is literally the size of a postcard. The filing fee is $15.00.
      Alternatively, if your company is dissolved, and would need to be reinstated, the filing fee is $115.00, and you can expect to run up at least several hundred dollars in legal fees getting the company reinstated.
      Only one of those is a cost-effective option.
      You can check to see if your annual report has been filed on the Secretary of State’s website. If the annual report has not been filed you may file it electronically. HERE IS A LINK to that website.

Friday, August 31, 2018

The Passing of Henry V


The Passing of Henry V

      Today marks the anniversary of the passing, in 1422, of King Henry V of England. Things would go essentially downhill from there.
      The victor of Agincourt would be succeeded by his 9 month old son, henceforth named Henry VI. His was not a pleasant succession. England fell into dissension with factionalism among various nobles as to who, during Henry VI’s minority, would rule the country. Meanwhile, from the heights of success in the Hundred Years War at Agincourt, leading to the marriage of Henry V to Catherine of Valois, daughter of Charles IV, King of France. Charles would also name Henry V as his heir. While Henry VI would be formally crowned King of France, in reality he was not. Rather, over his reign, and notwithstanding his marriage to Margaret of Anjou, an effort to further solidify the claim on the French throne, the French would push England out of the country save for the remaining toehold in Calais.
     The weakness of Henry VI, combined with significant acrimony between the English nobility generally and Margaret of Anjou, would precipitate what is today referred to as the War of the Roses (at the time typically referred to as the “Cousins War”). Ultimately, Henry VI would be deposed by Edward IV assisted by Richard Neville, Earl of Warwick and a/k/a “the Kingmaker.”
      Today is as well the anniversary of the birthday of the Roman Emperors Caligula and Commodus.
      All in all, it’s just not a good day in the terms of historical events.

California to Impose Gender Requirements on Boards of Publicly Held Companies


California to Impose Gender Requirements
on Boards of Publicly Held Companies

      The California legislature has passed, and there has been sent to the governor for either approval or a veto, a new law governing gender composition of certain boards of directors. The new law (assuming it is enacted) is applicable to publicly traded securities that are either (a) incorporated or organized in California or (b) are a foreign entity with its principal place of business in California. For those companies, by not later than December 31, 2019, the company must have at minimum one female director. Then, for that same class of companies, not later than December 31, 2021, the company must have a number of female directors set by sliding scale: (i) if the company has four or fewer directors, one female director; (ii) if the company has five directors, it must have a minimum of two female directors; and, (iii) if the company has six or more directors, it must have a minimum of three female directors.
       Companies are required to submit a report to the California Secretary of State with respect to their compliance with these new requirements. The law imposes significant penalties for any “failure to timely file board member information.” Those fines are $100,000 for the first violation and $300,000 for each subsequent violation.
       The penalty provision here is somewhat curious. The fines are imposed for failure to file the report, rather than the failure to comply with the board composition requirements. As written, it would appear that a company could be out of compliance with the board composition requirements, file an accurate report indicating it is out of compliance, and not be subject to the fine. Put another way, it is not clear that the statute includes an enforcement mechanism as to the minimum female board member composition obligation.
      It bears noting that this obligation is applicable to publicly traded companies with her principal place of business in California. At least some of those companies are going to be organized outside of California, often in Delaware. California holds the view that it may impose substantive corporate law requirements on companies doing business in California irrespective of where organized. I would not be surprised if litigation ensues over California’s efforts to impose its substantive corporate law on companies organized in other jurisdictions.

      HERE IS A LINK to the statute.