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In 1998, The U.S. Supreme Court in Grupo Mexicano de Desarrollo S.A. v. Alliance Bond Fund, 527 U.S. 308, held that the District Court had no authority to issue a preliminary injunction preventing petitioners from disposing of assets pending adjudication of the respondents’ contract claim for money damages. Subsequently, courts have interpreted Grupo to carve out exceptions for equitable actions and legal claims with specific statutory authority for injunctive relief. The Delaware Bankruptcy Court in Urban Commons Queensway, LLC v.…

On August 30, 2021, the Second Circuit decided in Irving Picard, trustee for the Liquidation of Bernard L. Madoff Investment Securities, LLC v. Citibank N.A., 20-1334, on “appeals of the latest installment in the long-running litigation arising from Bernard Madoff’s Ponzi scheme” whether the District Court properly dismissed actions brought against initial and subsequent transferees, to avoid and recover transfers, inter alia, under Sections 548 and 550 of the Bankruptcy Code. Section 548 (a) (1) permits a trustee to “avoid”…

With the recent rise in popularity of special purpose acquisition companies (“SPACs”), expect an uptick in SPAC related litigation to follow. SPAC’s are referred to as “blank check” companies because they are shell companies formed by a sponsor group to raise funds in an initial public offering (“IPO”) for the purpose of acquiring a yet-to-be-identified privately held target company. After the IPO, the SPAC has a specified period of time – often two years – to identify and combine with…

On July 7, 2021, Colorado’s Governor, Jared Polis, signed the Colorado Privacy Act (“CPA”) into law.  Colorado is the third U.S. state to enact a comprehensive privacy law, following the previous enactment of the California Consumer Privacy Act (“CCPA”) and the Virginia Data Privacy Act (“CDPA”). Though the CPA will not become effective until July 2023, it is critical for businesses to evaluate their current privacy frameworks, and whether they will be sufficient to meet the extended requirements under the…

It is no secret that the rapid development of cryptocurrencies and sudden surges in their popularity presented challenges to victims trying to recover their losses. Cryptocurrencies are a secure, decentralized and anonymous way to conduct transactions outside the customary banking channel. Criminals flocked to cryptocurrencies as a way to conduct illicit business without revealing their names or locations. But, the FBI’s recovery of Bitcoins paid to Colonial Pipeline in the ransomware attack reveals that cryptocurrencies are not as hard to…

The CARES Act, which sought to provide economic assistance during the global health pandemic, is exalted as an essential federal initiative. One of the most visible pieces of that Act is the PPP, which seeks to provide immediate financial assistance in the form of SBA-guaranteed loans to small and medium-sized businesses impacted by the economic uncertainties of the novel coronavirus. An important yet severe consequence is the rise of fraud in connection with misuse of PPP loan proceeds. Such situations…

In a prior post, I explained the basics of the Chicago Personal Property Lease Transaction Tax (“Transaction Tax”), including the applicability of the tax to tangible personal property and software, potentially applicable exemptions and exclusions from the tax, and collection issues. I also further clarified the application of the Transaction Tax to “cloud” software products and the interplay with the Illinois Retailers’ Occupation Tax (“ROT”) in a subsequent post. On January 21, 2021, the Chicago Department of Finance (“Department”) issued an…

The 2021 pandemic environment is showing trends toward evasive debtors trying to protect their wealth by moving assets fluidly around the world as creditors evaluate the value of assets and the ability to recover claims and debts. This environment requires knowledge of debt enforcement strategies in trying to keep up with assets in transit by operators working remotely and the proliferation of electronic commerce. Choosing the right recovery vehicle is critical to success. A creditor needs to evaluate in what…

With the economy on troubling grounds, there is a greater desire to protect assets. But, there is a difference between hiding and protecting assets. Hiding assets is a form of protection, but done for illicit purposes to keep away from current creditors. Assets can also be hidden, but not fully protected, which means when found they are vulnerable to recovery by creditors. The popular tactics discussed below being used for financial privacy and protection are those that not only keep…

The economic upheaval caused by the pandemic has forced persons to focus on asset preservation. The desire to protect wealth and business assets in a well-run, regulated and safe jurisdiction has led to a marked increase in business for the financial sector in places such as the Cayman islands. Traditionally, asset protection has meant to create a strategy to permit an individual or businesses to limit creditors’ access to assets in accordance with applicable debtor/creditor laws. Over the years, the…

On November 16, 2020, the City Council for the City of Chicago (“City Council”) amended the Chicago Personal Property Lease Transaction Tax Ordinance (“Ordinance”), eliminating the lower rate of tax on a nonpossessory lease of a computer, which includes “cloud” software products. As background, the Chicago Personal Property Lease Transaction Tax (“Transaction Tax”) is imposed upon: (1) the lease or rental in the city of personal property, or (2) the privilege of using in the city personal property that is…

With the holidays upon us, it seems like a good time to take a pleasant stroll through the cloud computing and digital product SALT developments you and your clients should be aware of. We returned to the “classic” format for this edition, organizing the stories by jurisdiction, headlining them in summary fashion, and then providing context and snappy analysis. If you have follow-up questions, please let us know. Colorado The Headline: Colorado Confirms that Data Backup Services Not Subject to…

Welcome to the third edition of Cover Your SaaS. Following a brief mid-summer hiatus from which the authors returned pale as ever, we dive once more into the cloud computing and digital product SALT developments you and your clients should be aware of. This is a bumper edition, so we have organized the updates by general topic rather than solely by jurisdiction. Let us know what you think of the changed format for the newsletter. We will continue archiving updates…

Welcome to the second edition of Cover Your SaaS, your new favorite(ish) semi-regular publication from HMB Legal Counsel’s State & Local Tax team. Far from accepting a sophomore slump, this edition boldly delves into SALT developments in the digital products sphere, the importance of separately stating charges, and the dangers of straying into taxable telecommunications. As before, we organize the stories by jurisdiction, give you the headline, the context and explain why the story matters. If you have follow-up questions,…

Welcome to the first edition of Cover Your SaaS, a new semi-regular publication from HMB Legal Counsel’s State & Local Tax team. Using the latest in news-scanning technology, i.e., the daily emails that land in our inbox, our goal is to keep you updated on key SALT developments in the digital and cloud computing space. The format is simple. We organize stories by jurisdiction, give you the headline, the context, and let you know why the story matters. If you…

Gathering and Organizing The first step in implementing your estate planning is to prepare lists of personal and financial information.  These should include lists of assets, estate planning documents, personal information, important people and personal directives.  Once gathered and organized, keep the information up-to-date and stored in a safe place.  Here is a closer look at what information you should include on each list: Your Assets The name and address of all financial institutions with which you have bank accounts,…

As you undoubtedly know by now, on January 1, 2020, Illinois became the 11th state to legalize the possession and use of adult-use cannabis. The new law, the Cannabis Regulation and Tax Act, 410 ILCS 705, et seq., (the “CRTA”) – all 610 pages of it – establishes the framework of one of the most regulated industries today. More than just laws about personal possession and use, the CRTA includes numerous provisions regarding the new business opportunities in Illinois, including…

1. Letters of Wishes are Theoretically Sound Trustees may have difficulties determining whether to make distributions when the grantor’s intentions are unclear. Consider a trust provision that provides for a beneficiary’s support in the form of reasonable medical expenses. The trust’s sole beneficiary approaches the trustee requesting a distribution for a gastric bypass surgery. The surgery can cost upwards of $45,000 and is the preferred method of achieving seventy-five pounds of weight loss. However, the surgery may be unsuccessful, and may result in post-operation complications and side effects that could…

A Mareva injunction freezes a defendant’s assets to avoid their dissipation and to enable a judgment to be later satisfied.  Ontario courts have found that the injunction is limited to circumstances where there is a real risk of removal, dissipation or disposition of assets to avoid the consequences of a judgment. Chitel v. Rothbart, 39 O.R. (2d) 513. In a recent decision in HZC Capital, Inc. v. Lee, 2019 ONSC 4622, the court expounded on the proof needed to obtain…

Five Basic Steps to Being Prepared As 2020 kicks off, cybersecurity remains ever present in the news whether its predictions for cyberattacks in conflict between state actors, such as the United States and Iran, or the recent New York Times report regarding a possible hack at the Ukrainian gas company at the heart of the impeachment investigations. Additionally, this week, it was reported that the chief information security officer for Mayor Pete Buttigieg’s presidential campaign resigned over differences allegedly “regarding the architecture and…

In December 2019, the Securities and Exchange Commission (the “SEC”) proposed amendments to the definitions of “accredited investor” and “qualified institutional buyer”. The securities laws use these definitions as important qualification standards for prospective investors in private offerings. As a qualification standard, the accredited investor definition is a core elements of several registration exemptions used by private companies when raising capital and, as a result, reduces compliance costs to help the market function efficiently. The proposed amendment follows a concept…

This blog, originally issued on January 9, 2020, has been updated and revised to reflect the Illinois Secretary of State's issuance of revised Form BCA 14.05, Annual Report, and new Form BCA 8.12, Female and Minority Directors Report, which clarify and implement Public Act 100-589's reporting requirements. Simply stated, as reflected on amended Form BCA 14.05, only those domestic and foreign corporations with their principal executive offices located in Illinois will be subject to the reporting requirements of new Section…

In the last several years to assist tracing of assets and discovery of perpetrators, courts in English common law countries have shown a willingness to assist victims by ordering third parties to disclose information through discovery about wrongdoings under Norwich Pharmacal relief. Developments in the Cayman Islands and BVI provide the following insights for counsel assisting these victims. Cayman Islands Relief endorsed whether or not there is a sound basis for bringing proceedings. Discover Investment Company v. Vietnam Holding Asset…

A federal district court may order discovery under 28 U.S.C. Section 1782 “for use in a proceeding in a foreign or international tribunal” upon application by any “interested person.”  A district court has the discretion to permit discovery under statutory prerequisites where a) the party seeking the discovery is an “interested person” with reasonable interest in judicial assistance of the U.S. court or is a “foreign or international tribunal”, b) the evidence sought is to used in a “proceeding in…

In a prior post, I explained the basics of the Chicago Personal Property Lease Transaction Tax (“Transaction Tax”), including the applicability of the tax to tangible personal property and software, potentially applicable exemptions and exclusions from the tax, and collection issues. This follow-up post in the Practitioner Series further clarifies the application of the Transaction Tax to “cloud” software products and explores the interplay with the Illinois Retailers’ Occupation Tax (“ROT”). UPDATE: In January 2021, the Department issued an Information…

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