Corporate News: A Legal Update

You are likely now aware of the Financial Crimes Enforcement Network's (FINCEN) new Corporate Transparency Act in effect as of January 1, 2024, that requires domestic entities (and foreign entities qualified to do business in the United States) to file a Beneficial Ownership Information Report (BOI) with FINCEN. In addition, you are also likely aware of your deadlines for filing these reports and FINCEN's potential fines and possible imprisonment for willfully failing to file or update a BOI. 

Parties to business acquisitions use indemnification clauses to provide security for harm that may result following the closing of the transaction. Indemnification obligations require one party to compensate the other for costs that arise relating to the performance (or lack thereof) of the terms the parties agreed to in the transaction documents.

The United States Supreme Court is set to take on a trademark infringement case that may have a lasting impact on the concept of corporate separateness. In Dewberry Group, Inc. v. Dewberry Engineers Inc., the Supreme Court will decide whether the disgorgement of profits of non-party corporate affiliates is appropriate in calculating damages under federal trademark law (i.e., the Lanham Act). 

In the case, Dewberry Engineers brought suit against Dewberry Group, which had previously gone by the name Dewberry Capital, after it underwent a substantial rebranding. This rebranding ...

On April 12, 2024, the United States Supreme Court issued a unanimous ruling in Macquarie Infrastructure Corp. et al v. Moab Partners, L.P., et al. which held that omissions, by themselves, are not subject to private rights of action under Rule 10b-5, but omissions can support an action if they make other statements materially misleading.

The Division of Enforcement (“Division”) for the Securities and Exchange Commission (“SEC”) released the 2024 Examination Priorities Report (“Report”) highlighting the key areas the Division will examine in 2024.

On March 1, 2024 in the case of National Small Business United v. Yellen 5:22-cv-01448-LCB the U.S. District Court for the Northern District of Alabama declared the Corporate Transparency Act unconstitutional stating in part that it “exceeds the Constitution’s limits on the legislative branch and lacks a sufficient nexus to any enumerated power to be a necessary or proper means of achieving Congress’ policy goals.”

On February 7, 2024 FinCEN issued a Notice of Proposed Rulemaking that would require certain professionals involved in real estate closings and settlements to report information to FinCEN about non-financed transfers of residential real estate to legal entities or trusts. FinCEN’s proposal targets residential real estate transfers considered high-risk for money laundering.

In this day and age, we have a world of resources right at our fingertips, including new ways to access legal matters that would traditionally be handled by an attorney. Like with everything, there are benefits and drawbacks to the accessibility of standardized templates and sample agreements online.

With the advent of the federal Corporate Transparency Act (“CTA”) that begins on January 1, 2024, financial institutions will need to re-think their information and certification requirements for account and loan customers.

The U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) published a Notice of Proposed Rulemaking on September 27, 2023 to amend the final Beneficial Ownership Information (“BOI”) Reporting Rule to extend the deadline from 30 to 90 days following formation or registration for reporting companies created on or after January 1, 2024 to file BOI reports. The purpose of requiring BOI reports, which disclose companies’ beneficial owners to law enforcement agencies, is to help them combat money laundering and other crimes. The purpose for this extension of the filing deadline is to provide additional time for reporting companies to understand the reporting rules and, in turn, increase compliance.