SEC Proposes to Expand Qualification for Smaller Reporting Companies

July 7, 2016 | Comments Off on SEC Proposes to Expand Qualification for Smaller Reporting Companies
Posted by John L. Sikora

The Securities and Exchange Commission has proposed to amend the definition of a smaller reporting company to a registrant with either a public float (i.e. the market value of the registrant’s common equity held by non-affiliates) of less than $250 million, or a public float of zero (meaning that all of the registrant’s common equity is held by affiliates) and revenues of less than $100 million in the prior year. However, if a registrant does not initially qualify as a smaller reporting company, the registrant will not be eligible to qualify as a smaller reporting company unless or until the registrant either has a public float of less than $200 million, or a public float of zero and revenues of less than $80 million in the prior year. Under the current rules, a smaller reporting company is defined as a registrant with either a public float of less than $75 million, or a public float of zero and revenues of less than $50 million in the prior year.

Registrants that qualify as smaller reporting companies are eligible to avail themselves of scaled disclosure obligations for their periodic reports and financial statements filed with the SEC. Smaller reporting companies are also not required to provide an independent registered public accounting firm’s attestation report on their internal controls over financial reporting in their annual reports.
The SEC will be accepting comments on the proposed amendments through August 30, 2016.


IRS Clarifies that Partners are not Employees, even in Holding Company Structure

June 14, 2016 | Comments Off on IRS Clarifies that Partners are not Employees, even in Holding Company Structure
Posted by John A. Aiello

Co-authored by John L. Sikora

The Internal Revenue Service recently adopted temporary regulations to clarify that a disregarded entity that is owned by a partnership is not treated as a corporation for purposes of employing the individual partners in the partnership, even if the disregarded entity is otherwise treated as a corporation for employment tax purposes. Rather, the disregarded entity is disregarded as an entity separate from the partnership for purposes of employing the individual partners in the partnership. This means that a partner in a partnership that owns a disregarded entity (such as a limited liability company) that employs the partner, is deemed to be self-employed and is subject to self-employment taxes on the net earnings from the disregarded entity’s activities. Consequently, the partner will not be entitled to participate in certain tax-advantaged employee benefit plans that would otherwise be available to the disregarded entity’s other employees. Read more


Three’s A Crowd: Dissociation Under New Jersey’s RULLCA

February 8, 2016 | Comments Off on Three’s A Crowd: Dissociation Under New Jersey’s RULLCA
Posted by Matthew N. Fiorovanti

Friends get together to discuss a business idea.  The concept sounds great, and everyone anticipates a smooth ride to a successful business and lasting partnership.  The friends decide to form an LLC, but do not engage counsel or enter into a specific, detailed operating agreement, instead choosing a “template” after a Google search.    The partners do not consider what happens if things do not go as planned, since they are convinced that this will not be the case.  Unfortunately, while the business may become successful, the relationship among the partners may change for a host of unanticipated reasons.  When things go bad and disputes arise among members of an LLC, the members – quite often friends or even family members – are faced with how to resolve the dispute without destroying the business. Read more


SEC Clarifies Effect of Whistleblower Definitions as New Bill Pushes Extension of Time to Enforce Securities Law Violations

August 24, 2015 | Comments Off on SEC Clarifies Effect of Whistleblower Definitions as New Bill Pushes Extension of Time to Enforce Securities Law Violations
Posted by Patrick Convery

On August 4, 2015, the Securities and Exchange Commission (the SEC) clarified a discrepancy in the interpretation of the securities laws regarding whether an individual who reports securities law violations must report misconduct to the SEC in order to constitute a “whistleblower,” who is entitled to protection under the anti-retaliation provisions in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act).  Lawmakers are also now considering an extension of the time period within which the SEC must enforce violations of securities laws from the occurrence of such violations. Read more


Executive Compensation SEC Proposed Rules

July 22, 2015 | Comments Off on Executive Compensation SEC Proposed Rules
Posted by John A. Aiello

On Tuesday, July 21, 2015, an article appeared in the Wall Street Journal entitled “CFOs Prep for SEC PayRatio Rules.”  Among other things, the article focuses on the potential complexities confronted by a public company seeking to comply with the proposed rule which would require the disclosure in the proxy statement and 10-K of the CEO’s annual total compensation in relationship to the median annual compensation of all other employees of the company.  Significant resources may be required to comply with these proposed CEO pay ratio rules.  Although the Wall Street Journal article focused on CEO pay ratio rules, it is worth noting other rules proposed by the SEC which would require disclosure of how executive compensation actually paid relates to the company’s financial performance.  Compensation committees will be inclined to spend greater time and effort in structuring compensation programs centered around performance goals and performance metrics to best assure a reasonable relationship between executive compensation paid and the company’s financial performance.


John A. Aiello Inducted as Honorary Member of The Monmouth University Chapter of Beta Gamma Sigma and Serves As Induction Ceremony Keynote Speaker

May 20, 2015 | Comments Off on John A. Aiello Inducted as Honorary Member of The Monmouth University Chapter of Beta Gamma Sigma and Serves As Induction Ceremony Keynote Speaker
Posted by John A. Aiello

On May 19, 2015, John A. Aiello, Shareholder and Chair of the Corporate & Securities Department at Giordano, Halleran, & Ciesla, was inducted as an honorary member of the Monmouth University Chapter of the Beta Gamma Sigma honor society.

Read More.


Giordano Attorneys Serve As Counsel To Colonial American Bank in Merger into OceanFirst Bank

February 25, 2015 | Comments Off on Giordano Attorneys Serve As Counsel To Colonial American Bank in Merger into OceanFirst Bank
Posted by Paul T. Colella

Giordano, Halleran & Ciesla is serving as counsel to Colonial American Bank in merger into OceanFirst Bank.  Paul T. Colella is lead attorney on the merger and is being assisted by John L. Sikora.  The merger is expected to close before the year-end 2015.  To read the full press release, please click here or to view the full OceanFirst press release, please click here.


M&A And The ACA

January 21, 2015 | Comments Off on M&A And The ACA
Posted by Frank Ciesla

Co-Authored By Ari Burd and Patrick Convery

As most employers already know, the Affordable Care Act (a/k/a ObamaCare or the ACA) now imposes health care insurance coverage requirements upon certain employers which have a certain number of full time and full time equivalent employees (“FTEs”).  Therefore, it is imperative that consideration be given to whether parties involved in any merger or other acquisition transaction are currently subject to the requirements of the ACA (and if so, whether they are in compliance with such requirements), or will otherwise be subject to the requirements of the ACA following the consummation of the transaction.  Read more


Seminar: The Limited Liability Company: The Preferred Entity For Real Estate Acquisitions & Development – October 9, 2014

September 2, 2014 | Comments Off on Seminar: The Limited Liability Company: The Preferred Entity For Real Estate Acquisitions & Development – October 9, 2014
Posted by John A. Aiello

Giordano, Halleran & Ciesla, will be hosting the seminar, “The Limited Liability Company: The Preferred Entity For Real Estate Acquisitions & Development” on Thursday, October 9, 2014 from 5:30-7:30 PM. Presented by the firm’s Corporate and Securities Department, this timely seminar will help you navigate and understand the use of the limited liability company vehicle by developers and funding sources in NJ.

For more information, click here.

 


Recent Development Regarding Fee Shifting By-Laws Under ATP Tour

July 16, 2014 | Comments Off on Recent Development Regarding Fee Shifting By-Laws Under ATP Tour
Posted by Patrick Convery

In ATP Tour, Inc. v. Deutscher Tennis Bund, the Delaware Supreme Court ruled that the board of a Delaware non-stock corporation may adopt a fee-shifting by-law that requires a plaintiff-stockholder to pay the corporation’s legal expenses if (i) the fee-shifting by-law is not adopted or used for an inequitable purpose and (ii) the plaintiff-stockholder that brought a claim against the corporation in an intra-corporate dispute does not prevail on that claim.[1]  The underlying case involved a lawsuit brought by Deutscher Tennis Bund and Qatar Tennis Federation (collectively, the “Federations”) against ATP Tour, Inc. (“ATP”), which is an operator of a global men’s professional tennis tour.  ATP was a Delaware non-stock membership corporation.  Upon joining ATP in the early 1990s, the Federations agreed to be bound by ATP’s by-laws, as amended from time to time.  In 2006, the board of ATP unanimously amended ATP’s by-laws to add a new article which included a fee-shifting provision that shifts the fees, costs and expenses (including reasonable attorneys’ fees and other litigation expenses) of an intra-corporate lawsuit to the claiming party (defined in ATP’s by-laws as a current or prior member or owner or anyone acting on their behalf) if the claiming party does not obtain a judgment on the merits that “substantially achieves, in substance and amount, the full remedy sought.”

In 2007, ATP’s board voted to change the tour schedule and format.  Under the proposed new tour schedule and format, a tournament which the Federations owned and operated was downgraded from the highest tier of tournaments to the second highest tier, and was moved from the Spring season to the Summer season.  As a result of these changes, the Federations sued ATP and six of its seven board members in the United States District Court in the District of Delaware, alleging both federal antitrust claims and Delaware fiduciary duty claims. Read more