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When Assets Are 'Sold' to Special Purpose Entities
The Seventh Circuit's decision in Paloian v. LaSalle Bank, N.A. (In re Doctors Hospital of Hyde Park Inc.) (“Paloian“), 619 F.3d 688 (7th Cir. 2010) sheds some new and perhaps disturbing light on the use of special purpose entity (“SPE”) structures in corporate finance and also has implications for attorneys who deliver opinions to support transactions involving SPEs.
SPE structures have long been useful to companies seeking to alter the composition of their balance sheet. When properly used, SPE structures are a valuable tool of modern corporate finance, permitting companies to obtain needed liquidity by monetizing otherwise illiquid assets on their balance sheet, particularly receivables. Unfortunately, SPE structures can also facilitate “aggressive” accounting by companies that use them to conceal debts by shifting them to off-balance-sheet SPEs. SPE structures played a key role in the financial maneuvering by Enron and others that ultimately unraveled in their highly publicized collapses.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs
A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.
Coverage Issues Stemming from Dry Cleaner Contamination Suits
In recent years, there has been a growing number of dry cleaners claiming to be "organic," "green," or "eco-friendly." While that may be true with respect to some, many dry cleaners continue to use a cleaning method involving the use of a solvent called perchloroethylene, commonly known as perc. And, there seems to be an increasing number of lawsuits stemming from environmental problems associated with historic dry cleaning operations utilizing this chemical.