In the current climate of market volatility prompted by the COVID-19 pandemic, more and more public companies with valuable US tax assets (e.g., net operating loss carryforwards) may, or at least should, consider adopting a shareholder rights plan in order to preserve those tax assets. These plans are commonly referred to as “NOL rights plans” (or “NOL poison pills”).
Continue Reading Is Now a Good Time to Adopt an NOL Rights Plan?
Jason R. Factor
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Who Are Your Section 162(m) “Covered Employees” After Mergers, Acquisitions and Other Transactions?
By Arthur H. Kohn, Michael Albano, Jason R. Factor, Mary E. Alcock, Julia M. Rozenblit & Allison McQueeney on
Posted in Executive Compensation
Section 162(m) of the Internal Revenue Code limits the deductibility of compensation paid by public companies to certain of their executives in any year to $1 million. The 2017 Tax Cuts and Job Act amended Section 162(m) to expand the number of executives at a public company whose compensation may be non-deductible by reason of…
Sun Capital Update: Court of Appeals Reverses District Court’s Finding of Constructive Partnership Between Private Equity Funds
On November 22, 2019, the First Circuit Court of Appeals held in Sun Capital Partners III, LP, et al. v. New England Teamsters & Trucking Industry Pension Fund, that two private equity funds, Sun Capital Partners III, LP and Sun Capital Partners IV, LP were not liable for approximately $4.5 million in multiemployer pension…
Withholding Judgment
Posted in Executive Compensation
Following the enactment of the Tax Cuts and Jobs Act (the “TCJA”) in late December 2017, which introduced significant reforms to the U.S. tax system, the Internal Revenue Service (“IRS”) issued new withholding guidance in January 2018.[1] Recently, two Democratic legislators have openly questioned whether the IRS’ 2018 withholding tables may result in systematic under-withholding of W-2 earnings. Companies will need to comply with the IRS withholding guidance, through administrative procedures that are typically the responsibility of payroll departments and outside payroll service providers. Companies may also be concerned about the consequences of under-withholding from an employee-relations perspective.
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Tax Cuts & Jobs Act: Considerations for M&A
Posted in Deal Structuring, Private Equity
On December 2, 2017, the U.S. Senate passed the Tax Cuts & Jobs Act. Two weeks earlier, on November 16, the U.S. House of Representatives passed its version of the bill. The Senate and House bills, while broadly similar, also have many important differences.
The Senate and the House will need to agree on one…
Tax Cuts & Jobs Act: Considerations for M&A
Posted in Deal Structuring, Private Equity
On November 2, 2017, the much anticipated Tax Cuts & Jobs Act was introduced in the U.S. Congress. The bill has been amended twice, on November 3 and November 6.
This memorandum sets forth a few key observations about the proposed bill, as amended, that may be relevant to M&A transactions. It must be emphasized,…