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Featured Article
Are Loans Securities? The United States Court of Appeals for the Second Circuit Responds in Kirschner v. JP Morgan Chase Bank, N.A.
In Kirschner v. JPMorgan Chase Bank, N.A., the Second Circuit upheld that certain notes from a refinancing involving Millennium Health LLC are not "securities" under federal and state securities laws. The decision relied on the "family resemblance" test from Reves v. Ernst & Young, emphasizing parties' motivations, distribution plans, investor expectations, and risk factors. The case underscores the importance of careful drafting and legal counsel in structuring debt transactions to avoid classification as securities and potential regulatory liability.
Related Articles
FTC Set to Reshape HSR Premerger Notification Process
The FTC and DOJ are set to finalize a rule reshaping premerger notifications under the Hart-Scott-Rodino Act. The new rule, which could take effect in late 2023 or early 2024, would significantly increase reporting requirements, making the process more time-consuming and expensive for merging parties. Proposed changes include detailed narratives about overlaps and supply relationships, disclosure of prior acquisitions, customer information, labor law violations, and more. Parties should prepare early and engage HSR counsel to avoid delays. Additionally, a Louisiana federal judge recently ruled in favor of Louisiana Children's Medical Center and HCA Healthcare, citing the state action doctrine in shielding their merger from HSR Act requirements.
Tuna Price-Fixing Summary Judgment Decision Is a Warning to Private Equity
A private equity firm and its advisor are facing trial over alleged participation in a canned tuna price-fixing conspiracy at their portfolio company, highlighting the importance of antitrust compliance, due diligence, and competitor meetings for private equity firms. The court's decision did not rely on direct evidence, emphasizing the need for vigilance in antitrust matters.
FTC Challenges Anesthesiology Acquisitions in Lawsuit Against a Private Equity Firm
The FTC sued private equity firm Welsh, Carson, Anderson & Stowe and anesthesia service provider US Anesthesia Partners, alleging they engaged in an anticompetitive scheme to monopolize the Texas anesthesiology market through serial acquisitions. The FTC's stance signals increased scrutiny of roll-up strategies by private equity firms, emphasizing the importance of consulting antitrust counsel in acquisition strategies.
Changes to Maryland General Corporation Law and Maryland REIT Law Effective October 1, 2023
The article discusses recent amendments to Maryland's General Corporation Law, covering topics such as director indemnification, shareholder proposals, record-keeping, and corporate governance, impacting businesses incorporated in Maryland. It provides insights into these changes.
Supreme Court of Maryland Overrules Prior Distinction Between Director’s Managerial and Non-Managerial Duties and Reaffirms That the MGCL Is the “Sole Source” of Director Duties to the Corporation and Its Stockholders
The Supreme Court of Maryland issued a significant ruling in the case of Eastland Food Corp. v. Mekhaya, clarifying the duties of directors of Maryland corporations and addressing stockholder "oppression" claims. The court rejected the distinction between "managerial" and "non-managerial" duties of directors and emphasized that Section 2-405.1 of the Maryland General Corporation Law is the "sole source" of director duties. The court also held that actions by directors, such as terminating an employee while paying excessive compensation to other family members and withholding dividends, could be considered "illegal, fraudulent, or oppressive." Additionally, the court noted that the business judgment rule applies to both derivative and direct stockholder claims.
Finders and Unregistered Broker-Dealers
The article explores the complexities of distinguishing between "finders" and unregistered broker-dealers in private securities transactions. It delves into regulatory requirements, potential exemptions, and practical considerations for businesses and intermediaries.
2023 Amendments to the Delaware General Corporation Law
Delaware has approved amendments to the Delaware General Corporation Law (DGCL), facilitating stock splits, ratification of defective corporate acts, sales of mortgaged assets without shareholder approval, and more, effective August 1, 2023.
Right to Reef? The Growing Number of State and Local Laws Addressing Off-Duty Marijuana Use by Employees
State and local laws surrounding employee off-duty marijuana use are evolving, creating complex challenges for employers, as more jurisdictions enact legislation to protect such use. Employers must navigate these varying laws carefully.
Should I Register My Entity to Do Business in a State? Supreme Court Case Reminds Us of the Scope of Considerations
This article discusses the considerations for registering an entity to conduct business in a foreign jurisdiction, including legal requirements, potential benefits, and the decision-making process.
CMS Proposes Behavioral Health Program Changes
The article examines proposed changes by the Centers for Medicare & Medicaid Services (CMS) to behavioral health programs. It outlines the key modifications and their potential impact on healthcare providers and beneficiaries.