Corporate News: A Legal Update

PFAS, short for per- and poly-fluoroalkyls substances are man-made chemicals used to make hundreds of products for home and industry use, ranging from stain proofing and waterproofing to firefighting and non-stick surfaces. They are among the most durable and task-effective man-made chemicals, yet they can exist in the environment for hundreds of years. Unfortunately, PFAS are associated with serious health risks including cancer, children’s developmental issues, immune system and endocrine disruption, and diabetes. The greatest area of public concern is contaminated drinking water. Human exposure also occurs in soils, surface water contamination, air emissions and workplace exposure (especially manufacturing and firefighting). 

Private placements can be a great resource for companies to raise capital in the current economic environment. They are cost effective in comparison to public offerings and provide greater decision-making latitude to current owners. Raising capital while keeping an entity private is an effective method for growing a business. Keeping a company private helps officers and directors take a long-term view of the company. Further, staying private has reduced administrative costs compared to public companies because private companies do not have the ongoing reporting obligations of public companies. Private placements allow companies to structure investments to meet their needs by issuing debt or equity investments under their terms. Whether the company is a newly formed start-up seeking the capital necessary to grow its business, or the company is more mature and would like to expand its ownership group by taking on new investors, private placements are versatile in how they serve companies.

Business brokers and intermediaries who are active in the lower end of the M&A middle market have been lobbying Congress for 10 years to enact a limited exemption from broker registration under the Securities Exchange Act of 1934.  Their work and patience have finally paid off.  On December 29, 2022, President Biden signed into law the Consolidated Appropriations Act, 2023.  Hidden away in it was Division AA, Title V, Small Business Mergers, Acquisitions, Sales & Brokerage Simplification, including the M&A Broker Exemption.  

On January 1, 2023, Wisconsin’s new limited liability company (LLC) law goes into effect. The Wisconsin Uniform Limited Liability Company Law (WULLCL), created by 2021 Wis. Act 258 and signed by Governor Tony Evers on April 15, 2022, completely repeals and replaces Wisconsin’s existing LLC laws in Chapter 183 of the Wisconsin Statutes (the “Old Laws”). The WULLCL—the new Chapter 183 of the Wisconsin Statutes—represents Wisconsin’s take on the Revised Uniform Limited Liability Company Act, which has been adopted in some form by nearly half of all states. With less ...

Effective January 1, 2023, Wisconsin will arguably become a more creditor-friendly state for judgment creditors of an LP partner or LLC member by virtue of the additional rights afforded a judgment creditor under Chapters 179 and 183 of the 2021 Wisconsin Statutes. 

On August 24, the Securities and Exchange Commission (SEC) released a draft of its strategic plan for 2022 – 2026, outlining its key initiatives for the next four years. The SEC’s mission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. Its strategic plan is intended to further that mission by laying out goals that will guide its policy and decision making.

According to the Consumer Price Index (CPI), the United States is facing the highest inflation numbers in over 40 years. On April 12, 2022, it was announced that the CPI has increased 8.5% over the last 12 months, based on March 2022 data. The CPI has been steadily increasing since May 2020, and the impact is being felt by individuals and businesses.

On March 21, 2022, in an effort to provide consistent, comparable, and reliable data for investors to enable them to make informed judgments about the impact of climate related risks on current and potential investments the Securities and Exchange Commission (“Commission”) proposed for public comment amendments to its rules under the Securities Act of 1933 (“Securities Act”) and Securities Exchange Act of 1934 (“Exchange Act”). Known as the Climate Risk Disclosure Act (S. 1217; H.R. 2570) the rules would require domestic and foreign public registrants to provide climate-related information in their registration statements and annual reports. The proposed rules would require information about a registrant’s climate-related risks that are reasonably likely to have a material impact on its business, results of operations, or financial condition. The required information about climate-related risks would also include disclosure of a registrant’s greenhouse gas emissions (“GHG”)(“Scope 1”), indirect emissions from purchased electricity or other forms of energy (“Scope 2”), and GHG emissions from upstream and downstream activities in its value chain (“Scope 3”) which have become a commonly used metric to assess a registrant’s exposure to such risks. In addition, under the proposed rules, certain climate-related financial metrics would be required in a registrant’s audited financial statements.