The Deal Before The Deal
Only the strongest survive in the jungle, and whether that jungle is on an island or in the business world ' Darwin's laws apply as much to the marketplace as to nature. This is particularly true in the tech sector. In the tumultuous online economy, firms fail or get bought out round-the-clock. <br>However, a good entrepreneur knows when to sell ' sometimes to catch a rising market, other times to cut losses. But deals don't usually get done immediately ' nor should they. Signing the first acquisition proposal doesn't let you fine-tune the deal. Even worse, you'll never learn what your opponent hasn't yet put on the table if you're too quick to scrawl your name on the dotted line.
U.S. e-Commerce Keeps Rising
With the federal government's 2004 fourth-quarter e-spending figures in, the expression "Nowhere to go but up" could have been coined as the motto for U.S. e-commerce activity.
Bankruptcy Fraud in the Spotlight?
As we all know, the feds continue to investigate and prosecute fraud in the financing, accounting and operation of businesses. The Second Year Report of the President's Corporate Fraud Task Force declares that over 500 corporate fraud convictions have been obtained to date and that charges have been brought against over 60 corporate CEOs or presidents. However, executives and their counselors would do well to note that the government's will and ability to prosecute high-level management may not lessen just because a business is in extremis.
Money Laundering Compliance Examinations
The biggest change that financial institutions face is the new, expanded-scope anti-money laundering (AML) regulatory examination and the proliferation of Written Agreements, Memoranda of Understanding, or Cease and Desist Orders issued by bank regulatory agencies should the financial institution be found to be deficient. An analysis of recent regulatory orders including, among others, AmSouth, ABN AMRO, Standard Chartered, Hudson United Bank, and City National Bank, demonstrates that the regulators are focused on multiple issues.
Written vs. Oral Joint-Defense Agreements
The Joint-Defense Agreement (JDA) has become a fixture in complex white-collar cases and even many purely civil actions. When the government begins an investigation of a company and its employees, it is often advisable and sometimes necessary to secure separate representation for the company, its employees and perhaps other entities or individuals. Independent attorneys owe a duty of loyalty to their individual clients and can provide them with personalized, confidential legal advice that an attorney for the company cannot provide. The company, however, needs to communicate with these represented parties. Employees will speak frankly with company counsel only if they know they are not exposing themselves to prosecution. A company cannot produce documents and engage in frank conversation with the government without such employee cooperation.
Must New Value Remain Unpaid to Serve As a Defense to a Preference Action?
Does subsequent new value need to be unpaid to constitute a defense to a preferential transfer under section 547(c)(4)? The issue arises when a creditor asserts the subsequent new value defense to a preference action, on the basis that additional credit (goods or services) was extended after the preferential transfer occurred, even if the subsequent new value was paid for by the debtor. With every decade comes a new wrinkle in the discussion on whether the subsequent new value provided must remain unpaid. The issue has been resurrected recently due to the frequency of critical vendor orders authorizing the post-petition payment of pre-petition debt and debtors-in-possession agreeing to pay reclamation claims in exchange for keeping the goods.
