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SEC Proposes to Ease Restrictions on Resales of Restricted Securities and Private Placements
As part of a series of measures aimed at improving capital-raising by smaller companies, the Securities and Exchange Commission has recently proposed rule changes that will make it easier for investors to resell restricted securities into the public market and for public companies to sell their securities in private placements. 
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New Worrisome Development in Lease Payment Guarantee
Many Landlords rely on lease payment guarantees from the individual principals of a tenant entity that is leasing space. A recent case decided by the New York Appellate Division, First Department in Manhattan raises problems for landlords who rely on such guarantees. Madison Avenue Leasehold, LLC vs. Madison Bentley Associates LLC, ___ A.D.2d ___, 811 N.Y.S. 2d 47 (1st Dep’t March 14, 2006) (“Madison/Bentley”).
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U.S. Supreme Court Makes Avoiding Arbitration More Difficult
Earlier this year, the United States Supreme Court issued an important decision that will affect arbitrations in New York and throughout the United States. In Buckeye Check Cashing, Inc. v Cardegna, __ U.S.__, 126 S. Ct. 1204 (February 21, 2006), the Supreme Court held that, under the Federal Arbitration Act, 9 U.S.C §1 et seq., the question of whether a contract that contains an arbitration provision is void is to be determined by the arbitrator, and not by a court, unless the challenge is to the validity of the arbitration provision itself. That means that a party will not be able to avoid arbitration by asserting that an arbitration clause is contained in an agreement that is void, unless the party can establish that the arbitration clause itself is unenforceable. Under the Supreme Court’s decision, the court should enforce the agreement to arbitrate and refer the question of the legality of the overall contract to the arbitrator.
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Second Circuit Clarifies Short-Swing Profit Rules as Applied To Options
Under § 16(b) of the Securities Exchange Act of 1934, directors, officers and 10% shareholders of public companies who, within six months, purchase and sell (or sell and purchase) securities of their company can be compelled to disgorge their profits on the transaction. In the words of § 16(b), this provision has “the purpose of preventing the unfair use of information which may have been obtained by such beneficial owner, director, or officer by reason of his relationship to the issuer.”
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Recovery Of Attorneys’ Fees in Landlord-Tenant Disputes
As a general rule in New York, a party to a litigation is not entitled to recover its attorneys’ fees unless the dispute involves a contract that provides for such recovery or an award of attorneys’ fees is authorized by statute. In the commercial landlord-tenant context, disputes concerning the right to recover attorneys’ fees are not uncommon, because many such leases contain an attorney fee provision. This article sets forth the circumstances in which such fees can be recovered as well as the procedures for doing so.
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Basic Tax Considerations in Choosing An Entity for a New Business
Every time an individual or entity establishes a new business or expands a business into a new location, one of the first decisions to be made is choosing the type of legal entity for the new business or location. The types of entities most often used are corporations, limited liability companies, corporations and limited partnerships. This article will briefly describe them and their basic advantages and disadvantages. The main considerations are minimizing taxes and minimizing the owners’ liability.
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Recent Developments in Estate Planning
"Transfer On Death" Securities Accounts; Attorney-Fiduciary Disclosure; Termination of an Uneconomically Small Trust.
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Selling Your Closely Held Business: What You Need to Do Before the Purchase Agreement Arrives
If you’ve ever thought of selling your closely held business, you’ve probably focused your attention on the terms that would be included in the purchase agreement, particularly the purchase price. In addition to how much you would receive, you may have thought about how it would be paid -- whether the purchase price would be paid in cash at the closing, or partially in cash with the remainder paid over time, or partially in cash and partially in stock of another company. You may have thought about whether you would sell for a specified, fixed amount, or whether there might be some additional “earnout” or “upside” based on the Company’s future performance. If you’ve been involved in a prior sale of a business or know people who have, you may even have given some thought to the other provisions of the purchase agreement, such as representations and warranties, and indemnification. But if you are seriously considering selling your closely held business and you’ve been thinking only about the purchase agreement, then you are getting way ahead of yourself.
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Protecting a Security Deposit Against the Risk of a Commercial Tenant's Bankruptcy
For quite some time we have been recommending to real estate owners, landlords or sublandlords that when they take a security deposit, it should be in the form of a letter of credit rather than cash. We gave this advice because, in our judgment, a letter of credit protects the landlord better than cash if the tenant files for bankruptcy. A recent decision by the Ninth Circuit Bankruptcy Appellate Panel, Redbank Networks, Inc vs. Mayan Networks Corporation (In Re Mayan Networks Corporation) 42 BCD 196 (9th Civ. BAP 2004) (hereinafter the “Mayan Case”) has confirmed that our advice was correct, but also highlights some additional precautions the landlord should take in the letter of credit transaction.
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APPELLATE COURT REAFFIRMS APPLICATION OF SPECIAL RULE GOVERNING THE MEASURE OF DAMAGES IN CONTRACT CASES
A case our firm recently won in the New York Appellate Division, First Department, established that despite apparently contrary language in the Uniform Commercial Code (“UCC”), a plaintiff who sues for breach of contract for sale of goods cannot recover more than his actual damage from the breach.
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