Practitioner Contributions

Many finance lawyers believe that a creditor is entitled to assert the full face amount of its claim against a guarantor in bankruptcy, without having to reduce such claim to reflect any partial payments by the primary obligor on the underlying debt. Thus, there is a traditional notion in bankruptcy practice that a creditor is entitled to receive a distribution from the guarantor based on the full face amount of its debt, potentially obtaining a recovery in excess of those received by other holders of claims with the same priority of payment that have received partial payments from the debtor.

Congress and the administration can still achieve the first major overhaul of our nation’s tax laws in nearly 30 years; such reform could occur with or without an agreement to enact fundamental entitlement spending reform.

While challenges remain, none are intractable—most are matters of degree. Let us look at the fundamentals and draw some conclusions as to how Congress and the administration might be able to get to “yes.”

In a recent decision from the Delaware Court of Chancery, Vice Chancellor J. Travis Laster provided what seems to be an important step towards reconciling two strands of Delaware law, addressing the distinction between direct and derivative claims, that have been in subtle conflict for years. That decision, Carsanaro v. Bloodhound Technologies, Inc., has already been recognized as an important development in the law governing the relationship between company founders and venture capitalists.

Beginning in 2013, long-term capital gains tax rates increased from 15 percent to 20 percent. Additionally, certain provisions of the new health care reform have imposed a new 3.8 percent tax on capital gains for certain high-income individuals in 2013, bringing the capital gains tax rate to 23.8 percent, which amounts to a 60 percent increase.

The right of shareholders to inspect corporate books and records occupies an important—though sometimes overlooked—place in corporate democracy and in shareholder litigation.

The basic premise underlying inspection rights is that shareholders—as owners of the corporate enterprise—have a legally cognizable interest in accessing certain information relevant to their financial investment in the corporation. Nonetheless, the separation of share ownership from management control is one of the foundational principles of corporate law and, thus, a shareholder’s inspection rights necessarily must be limited in deference to the basic principle that a corporation’s board of directors, not its shareholders, is charged with managing the affairs of the corporation.

After a flurry of legislative and administrative initiatives over the past six months to strengthen privacy protections in the telecommunications, internet, and credit-related sectors, China’s legislature now appears to be setting its sights on crafting broader consumer privacy protections. On April 28, the National People’s Congress (NPC) released for public consultation draft amendments to the Law on the Protection of the Rights and Interests of Consumers (“Consumer Protection Law”). If approved, these amendments would be the biggest amendments made to the Consumer Protection Law since its adoption in 1994.

In April 2012, Maryland became the first state in the nation to enact legislation restricting employers from asking prospective and current employees for access to password-protected material on their personal social media accounts. Since then, nine additional states have enacted such laws: Arkansas, California, Colorado, Illinois, Michigan, New Mexico, Oregon, Utah, and Washington. More than two dozen other states are considering similar legislation.

By Peter M. Shane, Ohio State University’s Moritz College of Law The Supreme Court’s May 20, 2013, decision in City of Arlington v. FCC1 resolved an issue that few non-lawyers (and probably not that many lawyers) followed. The Court held that federal judges should be deferential to agencies in interpreting the ambiguous statutes they administer even when the [...]

The Home Affordable Modification Program (“HAMP”) has had a rocky history in the three short years since its inception. Although participation in the Treasury Department’s HAMP program is voluntary, loan investors, including Fannie Mae and Freddie Mac, require their mortgage servicers to participate in their respective HAMP programs. As a result, nearly every servicer has been affected by HAMP. Initially, servicers struggled to implement a new, far-reaching program, and the government struggled to define the program’s contours and requirements.

The United States Supreme Court recently decided Amgen v. Connecticut Retirement Plans and Trust Funds,1 a major opinion relating to securities litigation. At issue in Amgen was whether proof of materiality is a prerequisite to certification of a class action under Section 10(b) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5. In a 6–3 opinion, the Court ruled that it is not.

Crowdfunding is rapidly being adapted as a tool to raise capital from a large number of small investors. A number of crowdfunded projects have already crossed the million-dollar threshold, and this trend will likely accelerate after the U.S. Securities and Exchange Commission implements the Jumpstart Our Business Startups Act, which clears the way for equity-based crowdfunding.

The outcome of civil litigation often hinges upon the ability of litigants to rely upon or exclude public records and reports and, in particular, opinions contained in them. Federal Rule of Evidence 803(8) (“Rule 803(8)” or “Rule”) excludes from the hearsay rule certain investigative reports that set out “a matter observed while under a legal duty to report,” including “factual findings from a legally authorized investigation.” Fed. R. Evid. 803(8)(A)(i), (iii) (emphasis added).

In all types of different business transactions, the parties to the transaction rely heavily on their own counsel to negotiate business and legal points, and to draft the transaction documentation to reflect the terms which have been agreed. Each party will typically also be involved in undertaking due diligence with respect to the other parties to the transaction, and the benefits and risks being assumed by that party, and may rely on representations and warranties provided by the other parties. In addition, often one party will require a written legal opinion from counsel to another party to the transaction which is directed to the requiring party as a condition to the closing of the transaction.

By Jeffrey C. Johnson, Pryor Cashman LLP Until very recently, standard essential patents (SEPs) have been a topic of discussion for a relatively small number of industries, such as telecommunications and consumer electronics. SEPs are patents that cover technologies that are considered an established standard in a particular industry. Some standards are de facto, meaning a particular [...]

One point can be an anomaly. Two points is a line and if those two points are In re Coventry Healthcare, Inc. ERISA Litig., 2013 BL 76546 (D. Md., March 21, 2013) and Adair v. EQT Prod. Co., 2012 BL 135030 (W.D. Va., May 31, 2012), that line may be foreshadowing a dangerous trend.

The recent economic downturn has resulted in a greater number of real estate loans going into default. Many of these loans were packaged and sold as commercial and residential mortgage-backed securities (“MBS”) issued in the heyday of the real estate bubble. Borrower defaults have spawned a myriad of lawsuits by investors in mortgage-backed securities against lenders that sold the loans to securitization trusts.

The proliferation of mobile devices and health care-related mobile applications is radically changing the way health care services are delivered. The promise of such devices and applications is that enhanced mobility and access to information will improve the way in which physicians and their teams interact with patient health information. However, app developers and health care providers must be aware of the implications of designing and utilizing mobile devices and health apps.

American businesses have a new weapon to exclude foreign competitors from the U.S. market using the International Trade Commission (ITC). In TianRui Group Co. v. ITC, a divided Federal Circuit panel gave the ITC authority over a business’s oversees conduct that violates federal trade secret law, which has no statutory or common-law basis. A “single federal standard” governs trade secret misappropriation analysis in Section 337 cases.

On March 11, 2013, Mexico’s new president announced a fundamental and sweeping set of reforms in the telecommunications and broadcasting sectors. The reforms are aimed at transforming the dynamics of and introducing effective competition into these key sectors of the economy. Until now, in Mexico these markets have been dominated by a combination of a quasi-monopoly in telecommunications and a duopoly in broadcasting, although the sector ostensibly has been liberalized.

What happens to the rights of a trademark licensee when its licensor is in bankruptcy? The hoped-for answer is “nothing”—but, so far, only the Seventh Circuit Court of Appeals, covering Illinois, Indiana and Wisconsin, has agreed definitively in the recent Sunbeam decision. Unfortunately, the Supreme Court declined to decide this important question.