LJN Newsletters

Recent rulings of interest to you and your practice.

Life insurance is a common issue addressed in a substantial proportion of divorces. For many clients, especially those of greater economic means, existing insurance coverage is owned by irrevocable life insurance trusts ('ILIT'). Existing ILIT arrangements too often receive inadequate attention during the course of a divorce as a result of the focus on other more significant issues, or the presumption that since the ILIT is 'irrevocable,' it cannot be tailored to address the post-divorce insurance needs. This can be a considerable mistake. In many cases, because it is assumed that an existing ILIT cannot be changed, the insurance requirements resulting from the divorce are separately addressed in a property settlement agreement ('PSA').

In a recent decision, the Ninth Circuit revisited the thorny issues involving the doctrine of unconscionability and its application to arbitration agreements. In Davis v. O'Melveny & Myers, 485 F.3d 1066 (9th. Cir. 2007), the court relied on a number of relatively recent, and by now well-known, cases in finding that a mandatory arbitration provision in O'Melveny's employee dispute resolution materials was unconscionable and, therefore, unenforceable.

In a three-part series in The Matrimonial Strategist (appearing in March, 2006, June, 2006, and March, 2007), Curtis Romanowski, a member of this newsletter's Board of Editors, described and promoted parenting coordination 'as a means for dealing with high conflict families involved in domestic relations proceedings before courts.' I applaud the efforts of those who have devoted significant time, energy, and, in some cases, funds, to trying to find ways in which to assist families in the difficult process of post-divorce adjustment, but parenting coordination has drawbacks that must be constructively addressed.

Every divorce lawyer has been in this situation: You are taking a deposition or examining a witness on the stand. You begin to get into sensitive subject matter, such as adultery, failure to report income, wiretapping or other miscellaneous criminal activities. The other lawyer objects. We all know that the privilege against self-incrimination applies even in civil cases such as divorce. So, you are not going to get an admission into evidence. Many practitioners do not realize, however, that they have some recourse.

On June 26, 2007, the long-awaited New Brunswick Franchises Act (Bill 32) received Royal Assent in the legislature. This law is now on the books, but it is not yet in force. That will happen when the Act is 'proclaimed.' Proclamation is expected following the promulgation and finalization of disclosure regulations, and is commonly done in stages: An example is Ontario's law, proclaimed in force on July 1, 2000, with the exception of the disclosure provisions, which came into force on Jan. 1, 2001.

The wealth-building strategy for the executive team and investors in a franchisor traditionally focused on setting the stage for one of three scenarios: a private sale to a strategic buyer; going public through an initial public offering, with a secondary offering to partially liquidate the group's investment; or establishing an enterprise with significant cash flow available for salaries, bonuses, dividends, and other emoluments of financial success. An attractive option now available is the private equity option, which involves a sale of all or the controlling share of the equity of the business to a financial buyer. This approach reorients financial exit strategy to harvest simultaneously the gain in enterprise value while positioning existing management and possibly investors to participate in future value accretion. This approach usually allows, or even compels, existing management to participate in the equity of the business going forward.

In the early days of attorney advertising, law firms created ads to demonstrate their unparalleled integrity and resourcefulness. Some three decades later, law firms are creating ads to demonstrate their unparalleled integrity and resourcefulness. Although firms themselves have undergone profound changes since the U.S. Supreme Court decided 30 years ago this month that even lawyers were entitled to free speech, the profession's advertising manner and message ' especially among the larger firms ' have evolved very little in those 30 years, according to many industry observers.