Costs of Being Public Rise 90% under Sarbanes-Oxley
September 01, 2003
<b><i>A New Study Confirms What Has Been Thought All Along</i></b> Costs directly associated with being public have almost doubled as a result of Sarbanes-Oxley (the Act), with more increases on the way, according to a study by our national law firm, Foley & Lardner. The rise in costs, which affects all public companies regardless of market capitalization or revenue, largely is driven by increases in accounting fees, director and officer insurance premiums, and legal fees.
When Should an Audit Committee Consider Independent Counsel?
September 01, 2003
As widely reported and discussed since July 2002, the Sarbanes-Oxley Act of 2002 (the Act) imposes a substantial number of new responsibilities on the audit committee of a public company required to file periodic reports under the Securities Exchange Act. This article discusses those responsibilities.
Consequences for FCPA Compliance
September 01, 2003
<b><i>What Sarbanes-Oxley Has WroughtPart One of a Two-Part Article</i></b>We all know by now that the Sarbanes-Oxley legislation was designed to strengthen corporate governance of publicly traded companies in the wake of Enron and other corporate accounting and fraud scandals of recent years. Its focus was principally on domestic corporate conduct. However, in just the short time since its enactment in 2002, the Act has begun to have a profound impact on other areas of corporate compliance and risk management as well.
Releasing the Albatross
September 01, 2003
In the context of large Chapter 11 cases, the resolution of disputed claims can often be the proverbial albatross around the neck of the debtor, delaying the closing of the debtor's case to the detriment of the debtor's estate.
The Effect of Bankruptcy on a Subchapter S Election
September 01, 2003
A new tax case from the U.S. Tax Court addresses the question of whether the filing of a Chapter 11 case by a Subchapter S corporation terminates the company's Subchapter S election. This case is important to the shareholders of a Subchapter S corporation that might have post-petition taxable income.
'Personal' Alter Ego Claims in Bankruptcy
September 01, 2003
Last month's article discussed the unfortunate fact that bankruptcy courts have made it virtually impossible for creditors to maintain individual alter ego claims against the debtor's shareholders and affiliates - and that as a result, crafting an alter ego claim that will survive an attack requires finesse. This month's article continues with a discussion of "personal" claims.
Protecting Executive Severance Claims
September 01, 2003
Amid the furor surrounding headline-grabbing scandals at corporate giants, the conduct of corporate executives is being scrutinized more closely than ever. Ushered in by the enactment of the Sarbanes-Oxley Act of 2002 (the Act), the era of "corporate accountability" has left many officers and directors worried about their potential exposure if a company struggling to remain profitable goes south during their tenure at the helm, regardless of the cause of the meltdown.
Getting the Most from Survey Participation
September 01, 2003
In an insightful Dilbert" cartoon, the boss is reviewing the results from a recent survey with two employees. The survey results being less than desirable, the boss states, "Managers' bonuses are linked to these results. You can be sure we'll make big changes ... to the survey. " Surveys can be a strategic asset and viable financial tool when assessing certain aspects of your firm. Surveys can also be useful in evaluating merger opportunities. Perhaps the best use for survey information is to identify needed improvements and illustrate the benefits of change. Improperly utilized, however, survey data can cause more harm than good. Survey results taken out of context can create unrealistic expectations among partners, foster unhealthy and divisive comparisons between practices or offices, promote unachievable strategic objectives, and generate broad-based anxiety and apprehension.
