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Too Many Fail To Properly Manage Licensing Agreements, Leaving Royalties Hiding Beneath The Surface

October 2013 A patent and license portfolio can provide a consistent and reliable revenue stream. However, many companies have technology, trademarks, and merchandising opportunities that are not fully exploited. Even if fully licensed, there is often considerable upside available via vigilant enforcement of audit provisions to ensure all amounts due are paid. Unlike almost any [...]

Straight From The IMF The U.S. Is Broke

August 2010 Economists are known for their dry writing style. Consequently, International Monetary Fund (IMF) reports are difficult to read, and are largely ignored by most news agencies. For example, the evening news certainly did not report the understated IMF comment that “a larger than budgeted adjustment would be required to stabilize debt-to-GDP”. Nevertheless, if [...]

Government Deficits, Other|

First-Ever SEC Deferred Prosecution Agreement Is Hardly A “Game Changer”

August, 2011 On May 17, 2011, the Securities and Exchange Commission (SEC) announced its first-ever deferred prosecution agreement with a company who voluntarily reported a violation of the Foreign Corrupt Practices Act.  Such agreements are intended to facilitate and reward cooperation in SEC investigations.  The SEC announcement praised the settling company (Tenaris S.A.) for its [...]

Getting More Money From Licenses

  Intellectual Property licensing is big business, and is getting bigger.  But most licensors do not earn as much as they should because they fail to perform royalty audits allowed under their license agreements.  The remedy is obvious, but is often not done for fear of the audit's cost or concern over disrupting the licensee [...]

Steps In Valuing Intellectual Property

Intellectual property (including patents, trademarks, copyrights, trade secrets, software, entertainment assets, customer lists, in-process research, etc.) is a large portion of the value of most business enterprises. When entering into any transaction involving intellectual property, you need to properly value these assets. This is easier said than done. This article cannot provide a complete "how-to" [...]

Valuation and Appraisal|

Goodwill Valuations – The Good, The Bad and The Ugly

Because of the current recession and related bear market, practically every company will need to pay greater attention to its annual goodwill impairment test required under Financial Accounting Standard 142 ("SFAS 142"). Many companies performing an updated goodwill impairment analysis will find that impairment has occurred. In addition, earlier goodwill assessments probably need to be [...]

Valuation and Appraisal|

Buyer Beware – The Alphabet Soup Of Appraisal Credentials

Appraisal disciplines have a confusing array of credentials. This occurs because: There are numerous asset types (e.g. real estate, businesses, machinery, fine arts, jewelry), with each asset type having its own sponsoring organizations, and There are numerous appraisal and other organizations that sponsor appraisal certifications, with wide variance in the standards employed. This is important [...]

Valuation and Appraisal|

Additional Disclosure Regarding Fairness Opinions Now Required In Proxy Statements

On October 17, 2007, the Securities and Exchange Commission (SEC) published its approval of amended Rule 2290 in the Federal Register. The new rule 2290 involves disclosures and procedures related to the issuance of “independent” fairness opinions included in proxy statements. Specifically, any proxy statement that includes a fairness opinion will soon need to disclose: [...]

Valuation and Appraisal|

SOX Whistleblower Protections Again Interpreted Narrowly

May 2011   The Ninth Circuit took a narrow reading of the whistleblower protections provided under Sarbanes-Oxley, and thereby eliminated the applicability of any whistleblower protection. The would-be whistleblowers were two internal auditors at Boeing. Based on the Court’s description: “In January 2007, plaintiffs Matthew Neumann and Nicholas Tides began working as auditors in Boeing’s [...]

SEC Issues Final Rules On Their Whistleblower & Reward Program Under Dodd-Frank

June 2011 The Dodd-Frank Act, which was signed by President Obama on July 21, 2010, includes (in Section 922) a whistleblower program sponsored by the Securities and Exchange Commission (SEC). This law (i) makes significant changes in the existing whistleblower provisions of the Sarbanes-Oxley Act of 2002, and (ii) authorizes the SEC to pay between [...]

Helping Your Expert Witness Succeed

Published in Los Angeles Lawyer, April 2003   Expert witnesses are more important than ever. Most complicated cases do not settle until after the experts have issued comprehensive reports or had their depositions taken. This trend will increase because education had not kept pace with the continuing increase in knowledge, causing an ever-widening gap between [...]

Commercial Damages|

Applying Investment Rules Increase Returns and Satisfaction

July 2011 Behavioral economics and finance use social and emotional factors to understand the limits of rationality in making economic decisions.  A recent survey by Barclays addressed techniques used by wealthy investors to increase both investment returns and their personal satisfaction.  The survey covered over 2000 net worth individuals across the world, all of whom [...]

Other, Personal Financial Advice|

Improving Cross-Examination Of Expert Witnesses

Published in Los Angeles Lawyer, April 2005 In many respects, the cross-examination of an expert witness is the same as for other witnesses. Some basics include: Be brief…Do not quarrel with the witness…Never ask a question to which you do not already know the answer…Avoid one question too many…and so on. However, there are some [...]

Commercial Damages|

Improving Your Expert Deposition Results Is Easy

Published in Los Angeles Lawyer, November 2004 In the vast majority of circumstances, your deposition results can be improved by adding a few questions that usually challenge expert witnesses. Consider the following practical advice gleamed from hundreds of actual depositions. These questions should be modified slightly depending upon your deposition strategy. Before the deposition begins, [...]

Commercial Damages|

Avoiding Common Mistakes When Selecting An Expert Witness

Published in Los Angeles Lawyer, November 2002 The following suggestions result from my experience serving as a witness, watching hundreds of other expert witnesses, and locating witnesses when servings as a confidential consultant. They are intended to help attorneys avoid common mistakes in selecting an expert witness. Be careful when your potential expert witness is too [...]

Commercial Damages|

401(k) Savings Calculator

401(k) Savings Calculator A 401(k) can be one of your best tools for creating a secure retirement. It provides you with two important advantages. First, all contributions and earnings to your 401(k) are tax deferred. You only pay taxes on contributions and earnings when the money is withdrawn. Second, many employers provide matching contributions to [...]

Other, Personal Financial Advice|

Simple Loan

Loan Amortization Enter your desired payment - and let us calculate your loan amount. Or, enter in the loan amount and we will calculate your monthly payment. You can then examine your principal balances by payment, total of all payments made, and total interest paid. Press the report button to see a monthly payment schedule. [...]

Other, Personal Financial Advice|

Plan Savings

Is your brokerage or insurance company offering you a free or low cost 401(k) using using 'Safe Harbor' or SIMPLE provisions?  If so your 'free' plan could be costing hundreds of thousands of dollars over a plan with vesting provisions.  This will help you calculate the savings, which can be used to improve your bottom [...]

Other, Personal Financial Advice|

Valuation Guide: Dry Cleaners

Summary of Valuation Approaches There are four different types of valuation methods that can be used to value dry cleaning businesses, these methods are: Asset-based valuation The basic formula to use for this method is: The fair market value of a company’s assets less the fair market value of its liabilities = the fair market [...]

Valuation Guide: Hotels

Industry Description The hotel and lodging industry (SIC 7011 and NAICS 721110)  includes a variety of properties that offer short-term lodging. [1]  The properties range from five-star hotels to recreational vehicle parks.  Within the United States, the industry includes 51,214 properties of 15 or more rooms. [2]  The industry generated $137.5 billion dollars in sales [...]

Valuation Guide: Fast Food Franchise

Description of the Industry The fast food industry (SIC 5812, NAICS 722211) consists of eating establishments where customers pay before eating, including eat-in, take-out, drive-thru and delivery establishments.  Fast food franchises, carryout restaurants, delicatessens, pizzerias, and sandwich shops all fall within this category.  In general, fast food restaurants emphasize dining at a low cost with [...]

Valuation Guide: Restaurants

Description of the Industry The restaurant industry (SIC 5812, NAICS 722110) consists of table-service dining establishments.  These establishments may also engage in the sale of alcoholic beverages, takeout services, and entertainment.  In general, full service restaurants differ from fast-food or other dining places in that they (i) have a full menu of appetizers, entrees, desserts, [...]

Valuation Guide: Auto Repair Shops

  Summary Because the starting financial statements often contain important transactions with owner/operators and other related parties, the financial statements will need to be scrutinized and probably adjusted.   Once reliable adjusted financial statements are available, the following valuation methods are most commonly used to value auto repair shops: Asset-based valuation – Particularly for a company [...]

Valuation Guide: Auto Dealerships

Summary  The value of an auto dealership facility generally fluctuates with the strength of the auto sales market.  Although each appraisal assignment is different, the value of a healthy and profitable auto dealership is generally going to place primary reliance on the income and market approaches.  A summary of public and private transactions appears later [...]

Computer Forensics Deserve A Place In Your Human Resource Toolkit

June 2008   Computers contain evidence useful in many human resource circumstances. Allegations of discrimination, sexual harassment, and unfair discharge are serious threats that are better understood by knowing what an employee did. Since computers are such a pervasive part of most employees’ work lives, analysis of data stored on these computers helps address these [...]

Controversial 1099 Reporting Repealed

By wide margins, both houses of Congress repealed both (i) the expanded Form 1099 information-reporting requirements mandated by last year’s Patient Protection Affordability and Care Act (PPACA, aka ObamaCare) and (ii) the expansion of 1099 reporting requirements to rental operations pursuant to the Small Business Jobs Act of 2010. The bill (H.R. 4) passed the [...]

Tax Advice & News|

Somber Yet Clear U.S. Financial Report Should Be Required Reading For All Citizens

March 2008 The U.S. federal government recently released “The Citizen’s Guide to the 2007 Financial Report of the United States Government”. This is the first time that the federal government has released this type of summary. It is remarkably candid and clear. It paints a picture that should have received greater attention already, and deserves [...]

Government Deficits, Other|

Keeping Track Of Federal Government Spending Is Supposedly Just Too Hard

March 2011 The Government Accountability Office (GAO) again reported that it “cannot render an opinion on the 2010 consolidated financial statements of the federal government, because of widespread material internal control weakness, significant uncertainties, and other limitations.” This has occurred for years. Although each year the federal government states improvements are being made, the bottom [...]

Government Deficits, Other|

The Ten Best Ways To Save Big

September 2012 There are plenty of ways to be thrifty. We do not mean to minimize Benjamin Franklin’s advice that “a penny saved is a penny earned”, but there are some ideas that have a much bigger impact. Here are the most important areas which are often neglected: Your career is your most important asset [...]

Other, Personal Financial Advice|

What Is The Fuss About “Net Neutrality?”

January 2011 The Federal Communications Commission (FCC) has long sought to impose rules requiring Internet Service Providers (ISPs) to continue to offer equal treatment to all traffic. You will be hearing more about this important issue. At the core of this dispute is lots of money. Not atypically, the numerous sound bites being reported by [...]

Current Events, Other|

IRS Report Provides Candid Assessment Of Major Problems

January 2011 Nina E. Olson is the current head of the U.S. Taxpayer Advocate. This is a government office dedicated to helping taxpayers solve their problems with the Internal Revenue Service (IRS). On January 5, 2011, she issued her required annual report to Congress (hereinafter called the “Report”). The Report is really long, with merely [...]

Tax Advice & News|

Details And Costs Of The Year-End Tax Act

The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (HR 4853) (the “Act”) is now law. The press has already written much about the political circumstances that gave rise to this law. Because understanding what these changes cost requires reviewing detailed accounting summaries, most press coverage repeats political ideologue from talking heads, [...]

Tax Advice & News|

Estate & Gift Tax Set For The Next Two Years

The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (HR 4853) (the “Act”) is now law. The estate and gift tax is one of the most dramatic aspects of this tax law change. President Obama was sharply criticized within his own party for these estate tax provisions. Under the Act, estates will [...]

Valuation and Appraisal|

Addressing Electronic Database Discovery – Challenging Yet Rewarding

Imagine litigation in which the sales and profits of a particular product or in a particular region were at issue. Such questions are commonplace in commercial litigation. Other than accepting your opponent’s word regarding the amounts reported in an interrogatory response, how would you determine this information? Or, imagine you wish to assemble information regarding [...]

Obama Commission Presents First Ideas On How To End The U.S. Government Financial Disaster

November 2010 In August 2010, we summarized an International Monetary Fund (IMF) report that concluded the U.S. is broke. Last week the Government Accountability Office (GAO) issued similar conclusions in its report on the Federal Government's Long-Term Fiscal Outlook. The report concludes: “GAO’s annual fall update of its long-term simulations underscores the need to address [...]

Government Deficits, Other|

IRS Toughens Position On Deductibility Of Government Settlements

 In September and October 2008, the IRS issued two pronouncements that address when litigation settlement payments with governments are deductible. These settlements could occur under any government regulation, including for example the False Claims Act, Medicare billing, environmental laws, anti-trust laws, as well as any state law. This issue will likely arise more regularly under [...]

Commercial Damages|

Revised Contingency Accounting Rules Delayed Again

November 2010   Significant negative feedback from legal executives and groups caused the Financial Accounting Standards Board (FASB) to delay implementing expanded financial statement disclosures of lawsuits and other loss contingencies. The FASB received 347 comment letters, including criticism from the American Bar Association, large collections of general counsel from major corporations organized by the [...]

Employers Should Implement Whistleblower Reporting Changes Because Of The Dodd-Frank Act

November 2010 The Dodd-Frank Act, which was signed by President Obama on July 21, 2010, includes (in Section 922) a whistleblower program sponsored by the Securities and Exchange Commission (SEC). This law (i) makes significant changes in the existing whistleblower provisions of the Sarbanes-Oxley Act of 2002, and (ii) authorizes the SEC to pay between [...]

Patent Damage Changes Are Coming

October 2007 In September, the House of Representatives approved the most sweeping changes to the United States patent law in over 50 years. If ultimately passed into law, patents will be harder to obtain, and easier to challenge. Supporters claim that litigation will be curtailed by (i) limiting the jurisdiction in which lawsuits can be [...]

PCAOB To Prevent Licensing Of Audit Firms From Certain Countries

October 2010 On October 7, 2010, the Public Company Accounting Oversight Board (PCAOB) announced it will start to refuse registration for auditors based in jurisdictions where American inspectors are not allowed to carry out inspections. This regulatory change will make it difficult on companies in these countries to use U.S. capital markets. The PCAOB’s change [...]

Investor-Related Regulation, Other|

SEC May End Brokerage Mandatory Arbitrations

October 2010 A little-known provision within the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 contains a provision that could dramatically impact how security investment disputes are resolved between brokers and their customers. The Securities and Exchange Commission (SEC) now has the power to remove mandatory arbitration language that is currently part of [...]

Investor-Related Regulation, Other|

Punitive Damages Now More Difficult In Patent Cases

September 2007 In a landmark decision that overturns long-standing precedent, the Court of Appeals for the Federal Circuit (CAFC) unanimously heightened the test to determine whether an infringer is subject to enhanced damages because of willful infringement of a patent. Such enhanced or punitive damages can be up to three times the compensatory damages. The [...]

Small Business Law Creates Tax Breaks and “Tarp 2” Lending

September 2010 President Obama signed the Small Business Jobs Act of 2010 (H.R. 5297) on September 27, 2010. The law contains the following major provisions that collectively are worth more than $12 billion in tax relief: Removes the heightened substantiation requirements and special depreciation rules for employer-provided cell phones under IRC §280A; currently, employers are [...]

Tax Advice & News|

Common Sense Standard For When Litigation Holds Begin Provides An Earlier Requirement Than Is Often Used

September 2010  When should a litigation hold be initiated? Plenty of prior cases provide an impractical answer; namely, a litigation hold is triggered when litigation is reasonably foreseeable. This has been similarly described as when there is notice of a credible threat of litigation. With the benefit of 20/20 hindsight, opposing parties and courts provide [...]


DOL Issues Significant New Requirements For 401(K) Plans

August 2008 In late July, the U.S. Department of Labor (DOL) issued proposed regulations that require plan fiduciaries to disclose plan- and investment-related information for 401(k) plans and other participant-directed individual account plans. The regulations, which ran 31 pages in the Federal Register, require uniform disclosures intended to ensure that participants are (i) made aware [...]

Investor-Related Regulation, Other|

Change In “Accredited Investor” Definition Will Cause The Investor Pool For Private Financings To Shrink

August 2010 Issuers conducting private offerings of securities often rely on Regulation D as the exemption from the registration requirements of the federal Securities Act of 1933. When raising money, most hedge funds, private equity funds, and private real estate investment vehicles, as well as those arranging angel financing, generally restrict themselves to “accredited investors”. [...]

Investor-Related Regulation, Other|

Federal Circuit Criticizes Ninth Circuit Damages Ruling. Double Recovery Must Be Avoided

November 2006 In Aero Products vs. Intex Recreation (no. 05-1283, Fed Cir. October 2, 2006), the Court held that damages arising from the same sales is an impermissible double recovery, even if multiple causes of action are involved. The instant case involved both patent and trademark infringement. The Federal Circuit concluded that, in determining whether [...]

Surprise! – U.S. Chamber Of Commerce Seeks More Government Control Over SROs

August 2011 A surprising call for additional government regulation occurs in a report entitled “The Unfinished Agenda”.  The U.S. Chamber of Commerce states that Congress should have (but did not) alter the existing regulation of so-called self-regulatory organizations (SROs) as part of its recent changes in financial regulation passed through the Dodd-Frank Act.  According to [...]

Investor-Related Regulation, Other|

Plan Sponsors Must Now Obtain Information About Usually “Hidden” Costs

July 2010 The Department of Labor (DOL) issued “interim final” fee disclosure regulations that apply to ERISA pension plans, including most notably 401(k) plans. The new regulation requires each plan service provider to disclose specified information in writing to the plan sponsor. The disclosed information includes: A description of the services to be provided; All [...]

Investor-Related Regulation, Other|

SEC Changes Short-Selling Rules

June 2007 Short selling is the practice of borrowing stock (usually from a broker-dealer or institutional investor), then selling it in anticipation that the stock price will go down. Because the short-seller has borrowed the stock, he benefits when the stock price declines, allowing the stock to be subsequently purchased (and the borrowed security returned) [...]

Investor-Related Regulation, Other|

SEC Takes Initial Measures To Avoid A Second Flash Crash. More Changes Are Coming

June 2010 The “flash crash” on May 6, 2010 is the biggest one-day intraday decline in Dow Jones Industrial Average history. The "flash crash" saw the Dow Jones Industrial Average plummet almost 1,000 points before partially recovering. Both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission told a Senate banking committee [...]

Investor-Related Regulation, Other|

More Is Needed To Improve Credit Rating Agency Conclusions

June 2010 Ratings of debt instruments are an integral part of U.S. financial markets. Reliance on these ratings is increasing, but their reliability is pathetic. Practically every issuer involved in a major unexpected financial collapse received high ratings immediately before the failure. The most recent and important example involves the failed AAA-rated collateralized debt obligations [...]

Investor-Related Regulation, Other|

Post-Judgment Reasonable Royalty Rates Get Important Additional Guidance

May 2009 The Supreme Court in eBay v. MercExchange, 547 U.S. 388 (2006) overturned the Federal Circuit's "general rule" of automatically issuing a permanent injunction after a finding of patent infringement. District courts must now use a four-factor test to exercise equitable discretion in deciding whether to issue a permanent injunction. The four factors are: [...]

New Economic Substance Test Eliminates Certain Judicial-Based Confusion, But Still Allows Significant Judgment

The recent health-care legislation (H.R. 4872) will be partly paid by a tax increase associated with an unclear tax provision aimed at tax shelters, but which could be used by the Internal Revenue Service (IRS) for much broader tax assessments. Taxpayers are now subject to a 40% penalty on tax underpayments related to transactions that [...]

Tax Advice & News|

Federal Circuit Reverses Damage Verdict Not Supported By Proper Expert Testimony

September 2009   Many lawyers admit that they are not “a numbers person”. If you are one of these folks, you need to hire an experienced and thoughtful damages expert. Although this article discusses patent damages, the broader lesson involves the need to present a complete damages analysis at trial using an expert witness who [...]

Federal Circuit Court Of Appeals Provides Guidance On Reasonable Royalty Damage Calculations

April 2010 In, Inc. v. Lansa, Inc., Nos. 08-1365, -1366, 09-1030 (Fed. Cir. Feb. 5, 2010), the United States Court of Appeals for the Federal Circuit (CAFC) provides useful instruction regarding common (but poor) practices that are seen in reasonable royalty damages analyses in patent infringement cases. The CAFC referenced its recent decision in [...]

California Appellate Court Says Attorney-Prepared Witness Statements Are Discoverable

March 2010 Discovery requests regularly ask (often through form interrogatory 12.3 and a related document production request) for all witnesses interviewed, and to produce copies of any witness statements. Non-producing parties regularly object to such requests based on Nacht & Lewis Architects, Inc. v. Superior Court, 47 Cal. App. 4th 214 (1996). In Nacht, such [...]

Expert Witness Federal Rule Changes Will Take Effect December 2010

February 2010 On September 15, 2009, the Judicial Conference approved rule changes under federal Rule 26 regarding expert reports and the discoverability of communications with expert witnesses. The rule changes have been submitted to the U.S. Supreme Court with a recommendation that they be approved and transmitted to Congress in accordance with the Rules Enabling [...]

Commercial Damages|

Reasonable Royalty 25% Rule Is Dead

January 2011 The Federal Circuit ruled in Uniloc USA, Inc. v. Microsoft Corp. (January 4, 2011) that the widely used but fatally flawed 25 percent rule can no longer be part of reasonable royalty damages calculations. Generally speaking, the rule pushed patent infringement damages higher. Because a reasonable royalty is the most frequently used measure [...]

SEC Proposes Limitations On Hedge And Private Equity Funds’ Money-Raising Activities

January 2007 The United States Securities and Exchange Commission (SEC) proposed new rules designed to limit investors who could participate in hedge funds and other pooled investment vehicles such as private equity funds. The new proposals respond to the ruling in Goldstein v. SEC (451 F.3d 873, D.C. Cir. 2006), which struck down the SEC's [...]

Investor-Related Regulation, Other|

Avoiding A Contingency Fee Tax Trap

In re: Commissioner vs. Banks and Commissioner vs. Banaitis, the Supreme Court ruled (8-0) that contingency attorney fees paid by an individual must be included in the taxpayer's income and then deducted.  This has the following adverse outcomes: Once included in gross income, the legal fee is deducted as an itemized deduction, causing: i. the standard [...]

Commercial Damages|

Software No Longer Subject To California Sales Tax

May 2011 In mid-May 2011, the California Supreme Court denied the State Board of Equalization's petition for review of the Court of Appeal decision in Nortel Networks, Inc. v. State Board of Equalization (Case no. B21341, filed January 11, 2011). The Nortel case has broad implications for California’s taxation of software. The amount charged for [...]

Tax Advice & News|

California Service Firms Must Now Register With BOE, And File Annual Use Tax Returns

October 2009 Use tax occurs whenever California sales tax is not paid. Sellers having no physical presence in California are not required to collect California sales tax. Consequently, purchases made from out-of-state catalogs and over the internet may initially escape California’s sales tax. Nevertheless, California use tax is owed by the purchaser when the merchandise [...]

Tax Advice & News|

SEC Inspector General Report Shows Incompetence At Best, And Fraudulent Cooperation At Worst

September 2009 The Madoff scandal is the largest financial fraud to have ever occurred. The U.S. Securities and Exchange Commission (SEC) Office of Inspector General (OIG) recently issued a report (OIG-519) entitled “Investigation of Failure of the SEC to Uncover Bernard Madoff’s Ponzi Scheme”. To anyone experienced in auditing matters, the OIG report is nothing [...]

Former Madoff CFO Pleads Guilty, Pledging Cooperation That Will Help Both Criminal And Civil Cases

August 2009 One of Bernard Madoff's lieutenants, Frank DiPascali Jr., pled guilty last week to ten federal felony counts and settled an SEC complaint. Of primary importance to the thousands of investors who lost money in Madoff's Ponzi scheme, DiPascali agreed to cooperate with authorities in investigating the Madoff fraud. Because of DiPascali's cooperation, additional [...]

Daubert & Kumho Expert Challenges Increase, Moving Away From Their Original Purposes

June 2011 PricewaterhouseCoopers (PwC) recently issued a study of what has occurred with financial (usually damages) experts since the 1999 Supreme Court decision in Kumho Tire Co. vs. Carmichael clarified that the Daubert criteria for challenges to expert witnesses extended to non-scientific experts. PwC compiled the results of cases, providing a plethora of statistics (actually [...]

Disgorgement Returned As A Monetary Remedy In Delaware Cases

June 2011 Although the case at issue involves insider trading, the limitations involving disgorgement as a monetary remedy could be applied to many other circumstances. The Delaware Supreme Court took little time in reversing a lower court decision that could have had widespread effects. The case is important because of the large number of companies [...]

Real Estate Tax Assessment Appeals Start Now

As indicated in our recent article, real estate values are dropping materially. With these value drops comes the possibility that you may be entitled to real property tax relief. However, unless the assessor is in a shockingly generous mood, you must specifically ask for the lower taxes. On January 1, 2008, if your home was [...]

Valuation and Appraisal|

Litigation: NASD Proposes Modified Arbitration Rules

May 2006 This month, the National Association of Securities Dealers (NASD) filed with the Securities and Exchange Commission (SEC) changes to its Code of Arbitration Procedure.  The changes are intended to simplify and reorganize the language/rules. The proposal makes the following changes: Divides the current Code into three separate codes: the Customer Code, the Industry [...]

Current Events, Other|

GAAP Reorganization Will Cause Short-Term Frustration, But Should Improve Research Capabilities

May 2009  On July 1, 2009, the Financial Accounting Standards Board (FASB) is expected to issue their “Accounting Standards Codification” (ASC) as the sole authoritative accounting guidance for U.S. generally accepted accounting principles (GAAP). The ASC will not change GAAP, but nevertheless represents a major shift in its organization and presentation. It is intended to [...]

Central District of California Case Poses New Requirements For Internal Investigations

April 2009 In an April 2009 written Order following a three-day hearing, federal judge Cormac Carney criticized Irell & Manella for "ethical failures" arising from its internal investigation on behalf of Broadcom (in re: United States v. Nicholas, No. SACR 08-00139-CJC (C.D. CA, April 1, 2009)). The case pertains to criminal stock option backdating allegations [...]

Ninth Circuit Provides New Cost-Based Rule For Antitrust Cases

September 2007   In McKenzie-Willamette Hospital vs. PeaceHealth (no. 05-35627, September 4, 2007), the Ninth Circuit established a new test regarding whether bundled transactions were a violation of §2 of the Sherman Act. The case is important because of the prevalence of bundled transactions, and because it establishes a split with the Third Circuit. Bundled [...]

More Resources Will Be Allocated To Financial Fraud Initiatives

February 2009 Government resources are usually allocated based on the political sentiment of the day. Those in charge of investigations understandably want to show that they are accomplishing something. Consequently, once resources are allocated to an investigative area, prosecutions invariably follow. White collar defense lawyers face improving business conditions. This is occurring because (i) increased [...]

Detailed Audit Provisions Save Headaches

February 2013 The audit provision within many licensing agreements is nothing more than a short paragraph in what may otherwise be a highly detailed document. We sometimes see audit provisions that are nothing more the following: Licensor, at their own expense, shall have the right to nominate an independent certified public accountant satisfactory to Licensee, [...]

Largest-Ever Ponzi Scheme Should Have Been Obvious To Anyone Who Looked Seriously

January 2009 In mid-December, Bernard Madoff was arrested for operating a giant ponzi scheme. After his two sons reported him to regulators, Madoff admitted that losses could be as much as $50 billion. Bloomberg tallied around $37 billion that is currently invested with Madoff, but the total numbers will obviously include amounts not subject to [...]