February 2010
Sandra Stern (Nordquist & Stern PLLC) summarizes the decision in Highland Capital vs. Schneider, 8 NYS3d 406, 866 NE 2d 1020 (Ct. App., N.Y., April 2007), holding that promissory notes may be securities for purposes of the Uniform Commercial Code
PLI: In Highland Capital vs. Schneider, what did the Court of Appeals of the State of New York decide regarding the status of promissory notes under the UCC?
SANDRA STERN: On April 3, 2007 the Court of Appeals of the State of New York decided the case of Highland Capital vs. Schneider,
8 NYS3d 406, 866 NE 2d 1020 (Ct. App., N.Y., April 2007), holding that
promissory notes may be securities for purposes of the Uniform
Commercial Code.
Bonus Banking
System of recognizing variable (i.e. bonus) executive compensation by depositing it into an account and distributing it to (or withdrawing it from) the account holder depending on the performance of the company over a certain period of time.
Continue reading "Bonus Banking"
How To Handle Shy Companies: Going Private Timelines
Like hemlines, the number of "going private" transactions goes up
and down with trends. Before the meltdown, private equity seemed to
rule the world and notable going private transactions seemed to occur
on a daily basis. Then, like the dinosaurs, the deals just disappeared.
Unlike the dinosaurs, "going private" may be ready for a comeback
(unless the current deal environment is just the equivalent of Jurassic Park
— lots of bluster for a not too good flick.) Anyway, for Toolbox, the
term "going private" seems mysteriously simple, and yet the
transactions are anything but. By media accounts, it's like a public
company gets bashful all of a sudden, begins to blush, de-lists its
public shares and goes to hide in a closet somewhere. But there's
actually a method to the process that allows the privatized entity to
continue post-public as if nothing ever happened (save the obligatory
cost-cutting measures and fealty to new ownres). So what's the process
that finds a public company going private?
Continue reading "How To Handle Shy Companies: Going Private Timelines "
There's An App For That? Introduction to Employment Practices Liability Insurance
With unemployment hovering somewhere between 9.7 and 18 percent
depending on to whom you talk, Toolbox figures a lot of discouraged
former employees are feeling screwed — some enough so to file a lawsuit
alleging some form of wrongdoing by their employer in letting them go
or in dealing with them while they were working. And applying the old
adage (ok, Toolbox made it up), "Where there's a risk, there's an
insurance policy for it," you figure there ought to be some way for an
employer to insure against alleged misdeeds in its hiring, firing and
maintaining practices. And by gosh, there is. It's called employment
practices liability insurance. Most have probably never heard of it
because it's a fairly select group that would have use for it.
It Pays To Do Executive Compensation Right — Compensation Best Practices For A Tough Crowd
Richard C. Ferlauto (AFSCME) begins Compensation Best Practices Overview with the missive "Compensation is an annual concern." Of course, with pay czar Kenneth Feinberg overseeing the compensation of companies that received TARP funds, with Congress making noises about excessive compensation, and with the citizenry (not to mention shareholders) seemingly on the verge of revolt, one could say that compensation has become a constant and systemic concern. And that makes it a concern for you, as you deal with boards and executives whose decisions and livelihoods are impacted by the latest challenge to how they are paid. The time for some ideas just comes, and with 75 percent of directors and investors agreeing that the "U.S. executive pay model has hurt corporate America's image," that time may be now. So how do companies compensate fairly without paying the piper of public derision and regulatory impingement?
Howard W. Ashcraft, Jr.: IPD represents a fundamental break from traditional construction contracting
PLI: Integrated Project Delivery represents a new approach to design
and construction. How does IPD work?
HOWARD W. ASHCRAFT, JR.: Integrated Project Delivery ("IPD") approaches
design and construction from a perspective that is fundamentally
different from traditional processes. (I use[] the term Integrated
Project Delivery for projects where the key participants are involved
from an early stage of design, the project is jointly managed by the
project team, and risk and reward are shared based on project outcome.
IPD is sometimes loosely used to describe projects that do not have
these attributes, but use Building Information Modeling ("BIM") or
pre-construction services. These are useful practices, but by themselves
they are not IPD.) Negotiating an IPD agreement also requires a fresh
perspective, unfettered by traditional contracting concepts. In many
instances, the contract negotiator must "unlearn" rules that have served
him or her well, but are not functional or relevant in an integrated
project. Moreover, negotiating an IPD agreement is not a separate act
from the project itself. The negotiation process is the IPD team's
first collaborative effort and will deeply influence its ability to
smoothly collaborate as the project unfolds.
Tax Gross-Up
Reimbursement paid by a company to cover the tax liability on variable compensation.
Continue reading "Tax Gross-Up"
I Most Certainly Do Not: Estate Planning for Unmarried Couples
According to the Census Bureau, there were recently 6,214,000 households consisting of unmarried partners as of 2008 (2.581 million with children under 18). Here's betting that, like Toolbox, these folks didn't do Valentine's Day. C'mon, if you can't even muster a $10.00 heart-shaped box of chocolates once a year, getting down on one knee to ask for marriage (or however it's done these days...Twitter?) or other domestic arrangement would seem to be beyond all bounds of reasonable behavior. But especially considering that so many of these households sport kids, they must also sport immensely complex financial arrangements. At least when you're married, for better or worse, for richer or poorer (in the context of this week's article, let's assume richer; in the context of the current economy, poorer), until death do us part, your finances are legally entwined with your other. But when you're just shacking up, with kids to boot? Imagine the estate planning. Wow. Toolbox might have to reconsider this whole anti-Valentine's Day thing.
Continue reading "I Most Certainly Do Not: Estate Planning for Unmarried Couples "
Breaking Up Is Hard To Do...Or At Least Harder Than Most People Think: Section 2 Of The Sherman Act
Toolbox does chocolate and even the occasional rose, but it doesn't do
Valentine's Day, which is why this week's lead article is about the
breaking up that occurs after too much getting together, even if it's
just two days after V-Day. It seems to Toolbox that the principles
behind the Sherman Act's antimonopoly provisions aren't all that
different from those in any good relationship. There is a natural
monopolistic tendency in all relationships. But is there any bigger
relationship killer than trying to monopolize the object of
one's affection? In personal relationships, as in business, the
opposite of trust is antitrust. If one partner conspires to or connives
to restrict their beloved from other life-markets, that partner will
kill the latter's competitive spirit — that which makes them vibrant —
and, eventually, that will kill the violating partner, as monopolistic
bloat devours what was formerly the lightness of romance. Just like in
business. At least that's what Toolbox has learned from a cursory study
of antitrust law. So this V-Day just past, Toolbox committed to
stamping out antitrust in personal relationships. That doesn't mean
this is a clarion call for open relationships, but rather for
relationships that foster competitive spirit.
Taylor Rule
Per "Dr. Econ" at the Federal Reserve Bank of San Francisco, formula "designed to provide 'recommendations' for how a central bank like the Federal Reserve should set short-term interest rates as economic conditions change to achieve both its short-run goal for stabilizing the economy and its long-run goal for inflation."
Continue reading "Taylor Rule "
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