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Nonprofit Governance Reform
Over the past 3 years, nonprofit organizations have wrestled with the degree to which they should undertake the types of governance reforms that are mandated for SEC registered companies under the terms of the Sarbanes-Oxley Act (SOX). Common reasons for proceeding slowly, or not at all, were that SOX does not apply to nonprofits, and except in a handful of states, such as California, there have been no state law mandates for change. There are also practical considerations that militate against strict application of SOX in the non-profit context, including significant differences in the development and expectations for board members, focus on mission rather that profitability and the overlay of federal exempt organization rules.
As a consequence, management of some nonprofit institutions has resisted efforts to reform and have continued practices that arguably are inconsistent with trends prevalent in the for profit world. Recently, pressure to reevaluate and consider changes in corporate governance has come from a source that will directly affect the pocketbook of many large nonprofit organizations — the agencies that rate tax exempt debt. All three of the major rating agencies, Standard & Poor's, Moody's and Fitch-Ratings, have issued statements and/or revised their ratings criteria this year with respect to nonprofit corporate governance issues for health care institutions with rated debt. In their comments, they have specifically referenced reforms mandated by SOX for public companies as models, and indicated varying levels of expectation that issuers adopt these or similar governance measures.
It is difficult to know exactly how the evaluation of corporate governance will play into ratings for issuers of debt, as none of the rating agencies has explicitly assigned a value to governance factors, but the mere fact that the rating agencies are stating that responses to specific governance inquiries will be considered in assigning a rating creates a strong incentive for nonprofit organizations to examine and implement reforms. This article reviews the pronouncements of the rating agencies, and assesses the potential impact on issuer organizations.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
The Stranger to the Deed Rule
In 1987, a unanimous Court of Appeals reaffirmed the vitality of the "stranger to the deed" rule, which holds that if a grantor executes a deed to a grantee purporting to create an easement in a third party, the easement is invalid. Daniello v. Wagner, decided by the Second Department on November 29th, makes it clear that not all grantors (or their lawyers) have received the Court of Appeals' message, suggesting that the rule needs re-examination.