Since their first appearance in 1993, “trust preferred” securities have become a popular way for regulated companies, such as bank holding companies and insurance companies, to raise required regulatory capital. In 1996, the Board of Governors of the Federal Reserve System, in a one-page press release, clarified for the banking world that the proceeds from the sale of these hybrid securities, which share characteristics of both debt and equity, could be treated as coveted “Tier 1” capital by bank holding companies. What has resulted has been an avalanche of trust preferred securities offerings, both public and private. Initially, because of… Read more

Our country was forever changed on September 11, 2001. Because the terrorist acts were committed by people who were in the United States temporarily with valid visas, immigration suddenly emerged as a hot topic of discussion. In 2001 alone, a total of 32.8 million people came to the U.S. from other countries. Immigration is now clearly a security issue rather than just a social or economic issue. On November 25, 2002, President Bush signed into law The Homeland Security Act of 2002 (PL 107-296), thereby creating the new Department of Homeland Security (DHS). The Senate confirmed former Representative and Pennsylvania… Read more

The Internet quickly distributes information to a wide audience, facilitating a virtually instantaneous interaction and exchange of ideas between far-flung people. As the United States Supreme Court has observed, with the Internet “. . . any person with a phone line can become a town crier with a voice that resonates farther than it could from any soapbox.”1 The Internet, which touches every aspect of our personal and business lives, is having a profound effect on the American securities markets. It creates a cheap, convenient and effective means of communication with investors and promotes the sale of securities with little… Read more

Intellectual Property law developed to reward an innovator with some type of limited property right in the fruits of his or her innovative endeavors. The need to provide an incentive for innovation and creativity was recognized in the U.S. Constitution, which provides: The Congress shall have power…to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries. Art. 1, Sec. 8, Cl. 8. The two primary purposes of Intellectual Property law are: (1) to encourage creativity and/or investment for research and development by rewarding… Read more

During the last four decades, a popular way to purchase permanent life insurance has been through so-called “split-dollar” life insurance arrangements, where two or more parties share the costs and benefits of the life insurance policy. Favorable tax treatment has been a major reason for the popularity of these arrangements. The IRS recently has announced changes in the taxation of split-dollar plans, and these changes cast doubt on the future utility of some of these arrangements and create a risk of potentially disastrous tax consequences for participants in certain existing split-dollar arrangements. Many split-dollar strategies developed prior to the IRS’s… Read more

You are the person in management at your company who is responsible for hiring the head of a new company division. You finally located the individual that you believe to be “the right one” for the job. However, you want to make certain that your new employee understands what the company expects from her and what the company will provide in return. Maybe there should be something in writing between the new employee and the company. You could always confirm the terms of the position in a letter to the employee, but what exactly does that accomplish? Does it give… Read more

The Supreme Court of Georgia recently decided the case of Mathis v. Cannon by a 4 to 3 margin.1 The case involved freedom of expression on the Internet and posed important Internet defamation law questions. DUMP DISPUTE LEADS TO INTERNET INSULTS In the case, a Crisp County, Georgia, man anonymously posted three libelous messages on a Yahoo! Internet message board late one night about Thomas Cannon, an executive of a waste management company. The author of the Internet insults was part of a vocal citizens group that opposed a controversial county waste disposal plant and Cannon’s corporate employer, which hauled… Read more

You have convinced the trial court to dismiss the case against you. Or you have endured the agony of a jury trial, and the jury awarded damages against your company. Is this the end of your case? Not necessarily. In almost all civil cases, the losing party has the right to appeal. If you won the case at trial, your instinct may be to soldier on and resist further settlement overtures. If you lost, your instinct may be to seek exoneration at any cost. However, deciding on a proper course of action requires that a party understand the appellate process… Read more

Most Americans are probably aware that they may not engage in business dealings with nations with which the United States has an antagonistic relationship, such as Cuba, Iraq and North Korea. But many people may not be aware that the United States aggressively enforces a broad range of economic sanctions against 12 countries or geographic areas and more than 3,500 organizations and individuals. These sanctions prohibit individuals and companies from conducting any type of business with the targeted entities and subject violators to heavy civil and criminal penalties. Because of the sheer number of targeted entities, and the fact that… Read more

Since the recent high-profile bankruptcies of Enron, WorldCom and other companies, the public has been bombarded by stories of corporate executives reaping millions of dollars in profits before delivering their companies to the bankruptcy courts and leaving the shareholders and employees holding the proverbial bag. Other stories have detailed the opulent compensation and retirement packages granted to corporate CEOs. These sensational stories have tarnished the image of corporate America (and corporate executives in particular) and have focused the attention of the public, the investment community and the regulators on the usually low-profile subject of executive compensation. Although the headlines have… Read more