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Better InsightsCalifornia Franchise Tax Board to Share Unclaimed Property Information with State Controller
01/31/2022Effective January 1, 2022, the California Franchise Tax Board (“FTB”) has the authority under Assembly Bill 466 to share information with the State Controller’s Office (“SCO”) relating to a taxpayer’s compliance with the California’s unclaimed property laws. To gather this information, the FTB has added a few questions to California’s business entity tax returns for tax year 2021, including whether the business has previously filed an unclaimed property Holder Remit Report with the SCO, the date the report was filed,…
While cryptocurrencies have increasingly become more mainstream, they are still relegated to the edges of financial systems because they are still not widely accepted as legal tender and are limited to private transactions between individuals online. Cryptocurrencies are global, and bad actors that use them to perpetrate fraud may be located in various jurisdictions around the globe. Not all countries have the framework to freeze and seize crypto assets. This has to be considered when designing plans to recover these…
As cross-border restructurings grow, especially in the wake of the global COVID-19 pandemic, global companies filing for insolvency relief in foreign countries may utilize chapter 15 of the Bankruptcy Code to facilitate the protection of assets located in the U.S. In Chapter 15 proceeding, assistance is available upon recognition of the foreign proceeding under Section 1521 (a) (4) of the Bankruptcy Code to pursue discovery “concerning the debtor’s assets, affairs, rights, obligations, or liabilities.” In a recent matter, In re…
The Supreme Court of Canada in H.M.B. Holdings Ltd. v. Antigua and Barbuda, recently considered whether foreign judgment creditors can seize assets in Canada when the party does not have an actual presence in Canada. There, the connection in British Columbia (B.C.) contracted with businesses in B.C. that were to pay a finder’s fee to the judgment debtor. The judgment creditor sought to enforce the judgment under Ontario’s Reciprocal Enforcement of Judgments Act (REJA). The REJA prevents the enforcement of…
On August 13, 2021, Illinois Governor J.B. Pritzker signed into law an amendment to the Illinois Freedom to Work Act, which will impact the enforceability of some non-competition and non-solicitation restrictive covenants in Illinois. Although the new law will not impact all restrictive covenants in Illinois (the amendment excludes from its scope restrictive covenants entered into ancillary to the sale of a business, for example), anyone who requires employees to sign non-compete or non-solicitation clauses should carefully review their form…
This overview is offered to provide a structured analysis of how enforcement measures can be implemented in civil law jurisdictions such as France and common law jurisdictions such as the UK and Germany. Creditors need to adapt their approach given the options provided by local law for recovering a debt and assets. The conditions for application of interim collection measures differs by jurisdiction. In French civil law, protective interim measures are permitted before a judgment is rendered. Creditors may apply…
Cover Your SaaS – Issue V, Q3 2021
10/04/2021As we move into harvest season, we here at Cover Your SaaS (CYS) have cultivated a fresh crop of updates for your enjoyment. Keen observers will note that there has been a somewhat larger gap than usual between newsletters and we admit, it has been a minute. Of course, absence makes the heart grow fonder so we are excited to provide you with the cloud computing and digital product SALT developments that your hearts have been pining for during the…
The Letter of Request Procedure is the main means of evidence gathering under the Hague Convention. This process begins with a request made to the U.S. court where the action is pending to issue a letter of request seeking the production of specified documents or the taking of testimony from a particular witness. The court transmits the letter of request to the Central Authority, a governmental agency responsible for receiving and overseeing execution of letters of request, which then transmits…
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 Rise Of Fraud Schemes From the CARES Act
05/07/2021The 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…
On January 21, 2021, the Chicago Department of Finance (“Department”) issued an anticipated Information Bulletin (“Nexus Bulletin”)[1] providing guidance on nexus and establishing a prospective “safe harbor” for certain taxes, including electronically delivered amusements under the Chicago’s Amusement Tax (“Amusement Tax”) Ordinance[2] and nonpossessory computer leases taxed under the Chicago Personal Property Lease Transaction Tax (“Transaction Tax”) Ordinance.[3] In short, effective July 1, 2021, if an out-of-state entity receives under $100,000 in revenue from Chicago customers during the most recent…
Prejudgment Freezing Orders in the US To Combat Evasive Debtors in the Current Pandemic Environment
01/14/2021The 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…
Current Trends to Hide Assets
01/07/2021With 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…
Cover Your SaaS – Issue IV
12/08/2020With 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…
Cover Your SAAS – Issue III
08/18/2020Welcome 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…
Cover Your SaaS – Issue II
06/22/2020Welcome 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…