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Business Law Section Newsletter

All Section Members are invited to contribute to the Newsletter.  Please submit articles, practice pointers and other contributions in MS word format via e-mail to Edwin A. Naylor, Editor, at ed.naylor@moyewhite.com.

February 2015

February 2015
From the Colorado Bar Association
Business Law Section

Ed Naylor, Editor
In this issue...
The Devil is in the Details
By Timothy Swanson, Moye White LLP

A recent opinion issued by the Second Circuit Court of Appeals arising out the General Motors (“GM”) bankruptcy case has illuminated the horrible consequences of overlooking minute details of a loan payoff closing. Practitioners in the banking, secured credit, and bankruptcy fields have been watching this case unfold like a slow motion train wreck. Perhaps it is the significance of the mistake that converted a lending syndicate from being fully secured for $1.5 billion to unsecured in a very public bankruptcy case, or perhaps it’s because two very reputable firms are involved in the center of the mistake. Nonetheless, the case shows that all practitioners and their staff must be attentive to the details.

I. Background Facts

A. The Synthetic Lease Transaction.

In October 2001, GM entered into a synthetic lease (the “Synthetic Lease”), by which it obtained approximately $300 million in financing from a syndicate of financial institutions with JP Morgan (“JPM”) being the administrative agent for the syndicate. The Synthetic Lease was secured by liens on 12 pieces of real estate and by among other filings, UCC-1s filed with the Delaware Secretary of State. In connection with the Synthetic Lease, GM was represented by the law firm of Mayer Brown LLP, and JPM was represented by Simpson Thacher & Bartlett LLP.

B. Documentation of the Term Loan Transaction.

Five years later, in November 2006, GM and its then-subsidiary Saturn Corporation (“Saturn”) entered into a senior secured term loan facility in the amount of approximately $1.5 billion (the “Term Loan”) from a different syndicate of financial institutions with JPM again being the administrative agent. The Term Loan was a transaction wholly unrelated to the Synthetic Lease, and was secured by, among other things, all of GM’s equipment and fixtures at 42 facilities throughout the United States. The liens securing the Term Loan were perfected by, among other filings, the filing of 28 UCC-1 initial financing statements—two of which (one for GM and one for Saturn) were filed with the Delaware Secretary of State. The UCC-1 filed in Delaware for GM was given filing number “6416808 4.”

C. Payoff of the Synthetic Lease and Accidental Termination of the Term Loan Security Interests.

The Synthetic Lease was set to mature on October 31, 2008, and GM was prepared to repay the obligation. In advance of the Synthetic Lease maturing, in early October 2008, GM requested that Mayer Brown prepare the documentation necessary to repay the Synthetic Lease and to release the liens securing the obligation. A partner at Mayer Brown instructed an associate attorney to prepare the necessary documentation to pay off the Synthetic Lease and terminate the liens securing the Synthetic Lease. Specifically, the associate prepared four documents to effectuate the payoff of the Synthetic Lease: (1) a closing checklist that identified the actions required to unwind the Synthetic Lease (the “Closing Checklist”); (2) a termination agreement which acknowledged GM exercised its right to repay the Synthetic Lease and released the liens against the Synthetic Lease collateral (the “Termination Agreement”); (3) a set of UCC-3 termination statements to terminate the liens against the Synthetic Lease collateral; and (4) an escrow agreement governing the title company’s role in closing the transaction (the “Escrow Agreement”).

In preparing the documents to terminate the Synthetic Lease, the associate attorney asked a paralegal unfamiliar with the transaction to perform a search for UCC-1 financing statements that had been recorded against GM in Delaware; the paralegal returned three UCC-1s numbered 2092532 5, 2092526 7, and 6416808 4. Neither the associate nor the paralegal knew that the third UCC-1 related to the Term Loan—and not the Synthetic Lease. Not realizing that the third UCC-1 was related to the Term Loan, the associate identified all three UCC-1s for termination in the Closing Checklist and Termination Agreement. The Closing Checklist and Termination Agreement was circulated to Simpson Thacher who also did not realize that the third UCC-1 related to the Term Loan—and not to the Synthetic Lease. In connection with the Closing Checklist and Termination Agreement, the Mayer Brown associate prepared three draft UCC-3 termination statements to terminate the three UCC-1s identified in the Closing Checklist, including the UCC-1 numbered 6416808 4 relating to the Term Loan. Mayer Brown’s Escrow Agreement provided LandAmerica, the escrow agent and title insurer (“LandAmerica”), with specific instructions to close the payoff of the Synthetic Lease. Pursuant to the Escrow Agreement, LandAmerica would receive funds from GM, disburse the funds to JPM, and the Synthetic Lease would be terminated. Following the disbursement of the funds to JPM, the Escrow Agreement instructed LandAmerica to return the UCC-3s to GM’s counsel, Mayer Brown, who would then file them on GM’s behalf with the Delaware Secretary of State. After receiving drafts of the above-described documents, a partner at Simpson Thacher (JPM’s counsel) replied to the Mayer Brown associate, stating “Nice job on the documents. My only comment, unless I am missing something, is that all references to JPMorgan Chase Bank, as Administrative Agent for the Investors should not include the reference ‘for the Investors.’” 86 B.R. 596, 611 (Bankr. S.D.N.Y. Mar. 1, 2013).

On October 30, 2008, GM repaid the Synthetic Lease to JPM. As set forth in the Escrow Agreement, LandAmerica disbursed the funds to JPM to pay off the Synthetic Lease and returned all three UCC-3s, including the UCC-3 numbered 6416808 4 relating to the Term Loan, to Mayer Brown. Mayer Brown (GM’s counsel) then filed all three UCC-3 termination statements with the Delaware Secretary of State.

D. JPM’s Discovery of the Mistaken UCC-3.

It was not until after GM filed for bankruptcy in June of 2009 that JPM discovered the mistaken filing of the UCC-3 termination statement that related to the Term Loan. Different counsel for JPM, not associated with the payoff of the Synthetic Lease, discovered the error and informed the Unsecured Creditors Committee (the “Committee”) that JPM never intended to terminate any liens securing the Term Loan, but only intended to terminate liens securing the Synthetic Lease. In response to JPM’s explanation regarding the inadvertent termination of the UCC-3 securing the Term Loan, the Committee initiated an adversary proceeding seeking a determination that despite the error pertaining to the erroneous UCC-3, the termination of the security interest in the Term Loan was nonetheless effective. Such a result would convert JPM’s status, under the Term Loan, from a secured creditor to a wholly unsecured creditor.

II. The Bankruptcy Court’s Opinion Finding in Favor of JPM
Official Comm. Of Unsecured Creditors v. JP Morgan Chase Bank, N.A., 486 B.R. 596 (Bankr. S.D.N.Y. Mar. 1, 2013)

The above described factual background was uncontested and the issue went before Judge Robert Gerber, United States Bankruptcy Judge for the Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”), on JPM and the Committee’s cross-motions for summary judgment. Furthermore, the Committee, JPM, GM, Mayer Brown, and Simpson Thacher each agreed that nobody intended to terminate any liens securing the Term Loan when the Synthetic Lease was paid off.

In a lengthy opinion, the Bankruptcy Court meticulously analyzed whether JPM ever granted Mayer Brown, GM, or Simpson Thacher the requisite authority, pursuant to Section 9-509(d)(1) of the UCC, to terminate its security interest in the Term Loan in any of the Closing Checklist, Termination Agreement, UCC-3s, or Escrow Agreement, by asking two questions: (1) was the document an authorization; and (2) if so, an authorization of what? In response to the first question the Court found that the Termination Agreement and Escrow Agreement were authorizations—to terminate the UCC-1s securing the Synthetic Lease only. However, in response to the second question the Bankruptcy Court found that none of the four documents were a grant of authority to any party to terminate the UCC-1 securing the Term Loan. The Bankruptcy Court adopted JPM’s argument that it did not intend to terminate the UCC-1 pertaining to the Term Loan and so the filing of the UCC-3 was unauthorized under Section 9-509(d)(1) of the UCC.

The Bankruptcy Court then disposed of the Committee’s remaining theories that JPM authorized the termination of the Term Loan finding that: (1) each of JPM’s agents did not subjectively believe that it had the authority to terminate the Term Loan; (2) none of JPM’s agents had apparent authority to terminate the Term Loan; (3) JPM did not ratify the filing of the erroneous UCC-3; (4) none of JPM’s agents had implied authority; and (5) as applied to the facts in this case, a significant amount of case law holding that a mistaken filing terminating a security interest was nonetheless effective, was distinguishable.

Accordingly, the Bankruptcy Court entered its order granting JPM’s motion for summary judgment, holding that JPM “did not authorize the termination of the UCC-1 with respect to the Term Loan, and that anything [JPM] said or did in connection with the payoff of the Synthetic Lease was not effective in bringing the UCC-1 securing the Term Loan to come to an end.” Id. at 648. Understanding the significance of its ruling, the Bankruptcy Court certified its opinion on a direct appeal to the Second Circuit.

III. The Second Circuit’s First Opinion Punting to the Delaware Supreme Court
Official Comm. Of Unsecured Creditors v. JP Morgan Chase Bank, N.A., 755 F.3d 78 (2nd Cir. Jun. 17, 2014)

Upon a direct appeal from the Bankruptcy Court, the Second Circuit narrowly framed the question on appeal as whether the UCC-3 filing—relating to the Term Loan—effectively terminated the UCC-1 relating to the Term Loan even though the intent of both GM and JPM was to terminate only the UCC-1s relating to the Synthetic Lease.

The Second Circuit began its inquiry by examining the three relevant provisions of Article 9 of the UCC pertaining to the termination of financing statements. First, Section 9-513(d) provides that a financing statement ceases to be effective once a UCC-3 termination statement has been filed. See 9-513(d) (“Except as otherwise provided in Section 9-510, upon the filing of a termination statement with the filing office, the financing statement to which the termination statement relates ceases to be effective.”). Second, Section 9-510(a) sets forth that a termination statement is ineffective if it is filed by a person who is not authorized to do so. See 9-510(a) (“A filed record is effective only to the extent that it was filed by a person that may file it under Section 9-509.”). Third, Section 9-509(d) sets forth who may file a termination statement. See 9-509(d) (“A person may file an amendment other than an amendment that adds collateral covered by a financing statement or an amendment that adds a debtor to a financing statement only if (1) the secured party of record authorizes the filing …”). According to the Second Circuit, “whether the UCC-3 filing effectively terminated the [UCC-1 related to the Term Loan] depends on whether the secured party of record, JPMorgan authorized the filing.” 755 F.3d 78, 83 (2nd Cir. 2014).

JPM argued that the erroneous UCC-3 was not authorized because the Termination Agreement only granted Mayer Brown and GM authority to terminate the Synthetic Lease, and because nobody at Mayer Brown, Simpson Thacher, or GM, ever subjectively thought they were authorized to terminate the UCC-1 relating to the Term Loan. Alternatively, the Committee argued that the analysis should be focused upon whether JPM authorized the mere filing of the erroneous UCC-3, and not whether it authorized termination of the UCC-1 relating to the Term Loan. The Second Circuit struggled in deciding the issues at hand, finding that there was no controlling Delaware legal authority on point, so it certified the following question to the Delaware Supreme Court:

“Under UCC Article 9 … for a UCC-3 termination statement to effectively extinguish the perfected nature of a UCC-1 financing statement, is it enough that the secured lender review and knowingly approve for filing a UCC-3 purporting to extinguish the perfected security interest, or must the secured lender intend to terminate the particular security interest that is listed on the UCC-3?”

Id. at 86.

The Second Circuit’s quandary under Section 9-509(d)(1) was whether authorization is sufficient where the secured party authorized the act of filing a particular UCC-3, or whether the secured party must authorize the termination of the particular security interest identified for termination in the particular UCC-3. Obviously, the Committee argued in favor of the former broad view—authorization is needed only for the act of filing the particular UCC-3—and JPM argued in favor of the narrow view—authorization is needed to accomplish the legal result of the filing of the UCC-3 to be filed and the secured party must intend those particular consequences.

In certifying the issue to the Delaware Supreme Court, the Second Circuit held that once the Delaware Supreme Court answered the question, the Second Circuit would be able to answer the remaining issue swiftly of whether “JPMorgan grant[ed] to Mayer Brown the relevant authority—that is, alternatively, authority either to terminate the [Term Loan UCC-1] or to file the UCC-3 statement that identified that interest for termination?” Id. at 84.

IV. Deleware Supreme Court: Section 9-509(D)(1) Only Requires a Secured Party to Authorize the Filing of a UCC-3.
Official Comm. Of Unsecured Creditors v. JP Morgan Chase Bank, N.A., 103 A.3d 1010 (Del. Oct. 17, 2014)

In addressing the certified question, the Delaware Court held that Section 9-513(d) of Delaware’s UCC is unambiguous and dictates that “‘it [is] enough that the secured lender review and knowingly approve for filing a UCC-3 purporting to extinguish the perfected security interest.’” 103 A.3d 1010, 1012 (Del. Oct. 17, 2014).

In its analysis, the Delaware Court started by reviewing the plain language of the three sections of the UCC applicable to the issues at bar, Sections 9-509(d)(1), 9-510(a), and 9-513(d). The Delaware Court found that the plain language of these sections of the Delaware UCC were unambiguous and “make clear that if a ‘secured party of record authorizes the filing [of a termination statement],’ then the filing is ‘effective’ ‘upon the filing of a termination statement with the filing office.’ At that time, ‘the statement to which the termination statement relates ceases to be effective.’” Id. at 1014 (citing 6 Del. C. §§ 9-509(d)(1), 9-510(a), and 9-513(d)).

From a policy perspective, the Delaware Court reasoned that sophisticated parties should bear the burden of ensuring that filed documents are correct. Imposing a requirement that the secured party subjectively understand the nature of its filing—as urged by JPM—would be extremely inefficient given the plain text of the secured party’s filing. The Delaware Court admonished JPM that “[b]efore a secured party authorizes the filing of a termination statement, it ought to review the statement carefully and understand which security interest it is releasing and why… [i]f parties could be relieved from the legal consequences of their mistaken filings, they would have little incentive to ensure the accuracy of the information contained in their UCC filings.” Id. at 1016. Additionally, the Delaware Court acknowledged that the UCC is a system of notice filing, and “[t]o hold that parties cannot rely upon authorized filings unless the secured party subjectively understood the effect of its own action would disrupt and undermine the secured lending markets.” Id. at 1017. Accordingly, the Delaware Court answered the certified question that, under Section 9-509 of the UCC, “it is enough that the secured party authorizes the filing to be made, which is all that § 9-510 requires… [t]he Delaware UCC contains no requirement that a secured party that authorizes a filing subjectively intends or otherwise understand the effect of the plain terms of its own filing.” Id. at 1018.

With these principles in mind from the Delaware Court, the Second Circuit then had the straightforward task of answering whether “JPMorgan grant[ed] to Mayer Brown the relevant authority—that is, alternatively, authority either to terminate the [Term Loan UCC-1] or to file the UCC-3 statement that identified that interest for termination?” 755 F.3d at 86-87.

V. The Second Circuit’s Controversial Opinion
Official Comm. Of Unsecured Creditors v. JP Morgan Chase Bank, N.A., 2015 U.S. App. LEXIS 859 (2nd Cir. Jan. 21, 2015).

Following the Delaware Court’s affirmative statement that “‘it [is] enough that the secured lender review and knowingly approve for filing a UCC-3 purporting to extinguish the perfected security interest’” the Second Circuit’s remaining task was to determine whether JPM granted Mayer Brown the requisite authority to file a UCC-3 termination statement. 2015 U.S. App. LEXIS 859 at *9 (2nd Cir. Jan. 21, 2015). Unsurprisingly, the Second Circuit’s answer to the remaining question was easy: JPM authorized the act of filing of the UCC-3 in question, its intent to terminate the UCC-3 pertaining to the Term Loan is immaterial for purposes of Section 9-509. In reaching its conclusion, the Second Circuit stated that:

JPMorgan and Simpson Thacher’s repeated manifestations to Mayer Brown show that JPMorgan and its counsel knew that, upon the closing of the Synthetic Lease transaction, Mayer Brown was going to file the termination statement that identified the Main Term Loan UCC-1 for termination and that JPMorgan reviewed and assented to the filing of that statement. Nothing more is needed.

Id. at *14.

Accordingly, the Second Circuit—with input from the Delaware Court—reversed the Bankruptcy Court’s grant of summary judgment and it’s ruling that the filing of the UCC-3 pertaining to the Term Loan was ineffective because it was without authority.

VI. The Story Continues: JPM’s Petition for Rehearing En Banc.

Unsurprisingly, on February 10, 2015, following entry of the Second Circuit’s reversal of the Bankruptcy Court, JPM filed its Petition for Rehearing En Banc (the “Petition”). (See 2nd Cir., Case No. 13-2187, Docket No. 151.) In its Petition, JPM asserted the same argument it has set forth before every court in this proceeding—the filing of the UCC-3 that pertained to the Term Loan was ineffective because JPM never intended to authorize Mayer Brown to terminate its interest in the Term Loan. In its latest attempt, JPM pleads that the Second Circuit’s ruling “has triggered a seismic shift in agency law with profound—and profoundly troubling—consequences’ and that the “opinion upends agency law by obliterating the key prerequisites to actual authority”. (See id. at 1-2.) JPM suggests that “[t]he takeaway for future litigants and courts is this: The scope of authority the principal explicitly granted does not matter; an agent for a limited purpose can bind the principal for all purposes.” (Id. at 13.) The Committee has not yet filed its response to the Petition.

Now, Some Methods Are Not Patentable!
By Henry L. Smith, Jr., Registered Patent Attorney

For decades many methods used in industry and elsewhere have been patented. These methods include, for example, valuable technological processes for manufacturing objects or chemicals, such as pharmaceuticals and metal alloys. Recently, issues have been raised about the patentability of the so-called “business methods”, which were first recognized as patentable in 1999. Examples include Priceline’s method of bidding for discounted airline tickets, and Amazon’s “One Click Ordering” method. These “business methods” are not very technological in nature. The Patent Reform Act of 2011 provided a procedure for challenging the validity of “business method” patents based on lack of adequate technology but did not state how much technology must be involved in valid “business method” patents.

Controversy is now brewing about methods implemented by software on computers, and the question is—are these methods and software technological enough just because they are implemented on computers?

In 2010 the U.S. Supreme Court decided the Bilski case (561 U. S. 593) and upheld the Patent Office’s refusal to issue a patent on a method of hedging investment risks, which was implemented by software on a computer. In essence, the Court indicated that hedging is just an ordinary method which has been around for years, and just because it is done on a computer for speed and convenience, does not make it patentable. It could be done by pencil and paper.

In 2014 the U.S. Supreme Court decided another major case about the patentability of non-technological processes which are implemented by software and computers. Alice Corporation Pty. Ltd. v. CLS Bank International, 134 S. Ct. 2347 (2014) involved a method of operating an escrow system on a computer. The court held that this method and software was not patentable because it was merely an “abstract method”. The Court indicated that such escrow methods have been around for years, and the fact that it was done on a computer with software does not make it patentable.

There are a number of other similar cases working their way up through the courts. Many patent attorneys believe that the Alice case did not articulate enough detailed guidance about what is an un-patentable “abstract method”. Some commentators have gone so far as to say that the Court’s general language is similar to the pornography decisions which do not articulate a clear definition but simply indicate “we can’t define it, but we know it when we see it.” It will take time for other cases to work their way through the courts to produce a more specific definition of an “abstract method” that is not patentable.

It should be noted, however, that even though processes like those in Alice and Bilski are not patentable, the computer programs that carry out these methods should be patentable, protectable under copyright law, and possibly protected by trade secret law, if the actual programs are kept secret. Unlike copyright protection, patent protection is much stronger, and protects the underlying process and structure of software, while copyright law protects only the particular “expression” (or lines of code) of the software. Like other inventions, to be patentable, software must be “novel”, and not just an “obvious” combination of, or change to, previous software. Some suggestions in the media that the Alicecase threatens the patentability of software itself are not correct.

DU Corporate and Commercial Law Program

The Corporate and Commercial Law Program at the University of Denver Sturm College of Law, along with the Race to the Bottom, the National Federalist Society, and student organizations including the Business Law Society, the DU Democrats, the American Constitution Society, and the Middle East and North African Law Society are pleased to announce that Harvey Pitt, chair of the SEC during the Enron scandal, will be speaking at the law school on Thursday, April 2 at 5 p.m. with a reception to follow. An application for CLE credit is pending. There is no charge to attend this event.

For more information, contact Gabrielle Palmer.

Business Law Section Activities
Antitrust and Consumer Protection Subsection

Proving Antitrust Injury in Federal Court—the ‘Injury to Competition’ Conundrum
Tuesday, March 24 at noon

Co-sponsored by the Antitrust and Consumer Protection Subsection of the CBA Business Law Section

While all lawyers are trained in the contours of legal injury, many lawyers may not appreciate the complexities of the injury component in antitrust actions. Are the plaintiff’s injuries, truly “antitrust” injuries? Does the plaintiff also have to prove “antitrust” injuries to competition broadly? How do those concepts differ? Katie Pratt will explore these concepts and subtleties during this CLE luncheon. We look forward to seeing you there.

Speaker: Katie Pratt of Berg Hill Greenleaf and Ruscitti LLP

Pre-registration encouraged. Please RSVP via email at lunches@cobar.org or register online (you must log onto the CBA website when registering online).

The live program will be held in the CBA Capitol Conference Room, 1900 Grant St., Ste. 900, Denver. You may participate in this meeting by telephone. Please indicate when registering that you would like to participate by phone if you wish to do so. The day before the program, we will email the materials as well as the call-in number to registered call-in participants.

Bankruptcy Subsection

Retirement Reception for the Hon. A. Bruce Campbell
Thursday, March 12 from 5 to 7 p.m.

The CBA Bankruptcy Subsection invites you to a retirement reception to honor Judge Campbell. The reception will take place at the Broker Restaurant, 821 17th Street, in downtown Denver.

Please RSVP to Patricia Murphy or call 303-455-0927.

Upcoming Bankruptcy Court Technology Training Sessions

The Bankruptcy Court and the CBA Bankruptcy Subsection are offering a free, one-hour, courtroom technology training from 10 to 11 a.m. on Friday, March 13, in Courtroom D, U.S. Bankruptcy Court. The training will also be offered on Friday, April 10 and Friday, May 8 in Courtroom C, U.S. Bankruptcy Court.

For more information on the training, please contact Andy Johnson. To register, please email Jill Lafrenz.

CLE Ideas?!

The Bankruptcy Subsection typically does two to four case law updates per year (about 1 ½ hours each), a Chapter 11 update (about 1 ½ hours), plus a full day CLE in June and a full day CLE in December.

Do you have a theme, topic, speaker, or other idea for the June or December CLE? Do you have ideas for other events in lieu of, or in addition to, a CLE? If so, please let us know! Please send your comments to Leigh Flanagan and Andy Johnson.

Update on proposed Exemption Legislation

On Jan. 8, 2015, CBA Bankruptcy Subsection members were asked to vote via email regarding proposed exemption legislation. The deadline for votes to be returned was Jan. 15, 2015. The Bankruptcy Subsection overwhelmingly voted to approve the proposed legislation and send it to the CBA Business Law Section Executive Council for approval. The Business Law Section is working with the Legislative Policy Section and the CBA’s lobbyist to further the proposed legislation with the Colorado legislature. For additional information regarding the legislation, please contact Guy Humphries.

Bankruptcy Case Law Update
Thursday, April 16, from 4 to 6 p.m.

The next case law update will cover cases from September 2014 through March 2015, with a networking happy hour to follow.

Presenters: Hon. Elizabeth E. Brown, U.S. Bankruptcy Court; Kinny Bagga, Brownstein Hyatt Farber Schreck; and Timothy Swanson, Moye White.

The program will be held at the CBA-CLE Classroom, 1900 Grant Street, Suite 300, Denver. This program is free and offered for 1 general CLE credit. Register via email to Jill Lafrenz.

Coming Up… Election for new Co-Chairs for the CBA Bankruptcy Subsection

The two-year term for current co-chairs Leigh Flanagan and Andy Johnson ends in June 2015. Are you interested in serving as a co-chair for the CBA Bankruptcy Subsection for the 2015–17 term? If so, please contact Leigh Flanaganand Andy Johnson.

Additional details regarding election of new co-chairs to come!

Future Communications from the Bankruptcy Subsection

In order to reduce the number of emails that members of the Colorado Bar Association receive, all future news and announcements from the Bankruptcy Subsection will be included in the monthly Business Law Section newsletter. Keep your eye out for this newsletter each month!

Financial Institutions Subsection

Recent Developments in Anti-Money Laundering Compliance
Wednesday, March 18, noon to 1 p.m (option to purchase lunch)

Co-sponsored by the Financial Institutions Subsection and International Transactions Subsection of the CBA Business Law Section

Micah Schwalb, an attorney with the Denver office of Greenberg Traurig, will discuss recent developments in anti-money laundering (“AML”) regulations and enforcement. Attendees will learn about forthcoming regulatory changes that will affect banks, broker-dealers, casinos, money services businesses, and other financial institutions obligated to maintain AML programs, as well as the customers of such institutions. Recent settlements and litigation will also be discussed.

Faculty: Micah Schwalb, Greenberg Traurig

The program will be held at the CBA-CLE offices, 1900 Grant Street, Suite 300, Denver. This program is offered for 1 general CLE credit. Learn more and register online.

Save the Date: Upcoming Financial Institutions Subsection Programs on April 15 and May 20.

International Transactions Subsection

For the March program, the International Transactions Subsection will be co-sponsoring a program with the Financial Institutions Subsection on Wednesday, March 18. See the information above.

Mergers & Acquisitions Subsection

Critical Updates in the Changing M&A Landscape 
Tuesday, March 3, 8 to 9 a.m.

Co-sponsored by the M&A Subsection of the CBA Business Law Section

Ms. Herzog and Mr. Koenig will cover recent changes in deal terms, claims, case law and regulations that significantly impact deal negotiations and outcomes. Practitioners will learn key takeaways to best advise their clients and ensure proper drafting of transaction documents to properly address these issues.

Faculty: Julie Herzog, Fortis Law Partners LLC and Paul Koenig, SRS Acquiom
Moderator and Program Series Chair: Darren Hensley, Polsinelli PC

The program will be held at the CBA-CLE offices, 1900 Grant Street, Suite 300, Denver. This program is offered for 1 general CLE credit. Learn more, view program faculty, and register online.

M&A Post-Closing Disputes: What Now?
Tuesday, April 7, 8 to 9 a.m.

Co-sponsored by the M&A Subsection of the CBA Business Law Section

Post-closing disputes often arise among the parties to an M&A transaction for a number of reasons. Join us as Paul Wood identifies common causes of such disputes and offers insights on how to deal with such disputes, along with thoughts on how to best draft M&A agreements to avoid such disputes or to put your client in the best position to prevail if a post-closing dispute arises.

Faculty: Paul Wood, Polsinelli PC
Moderator and Program Series Chair: Darren Hensley, Polsinelli PC

The program will be held at the CBA-CLE offices, 1900 Grant Street, Suite 300, Denver. This program is offered for 1 general CLE credit. Learn more, view program faculty, and register online.

Save the Date: Upcoming M&A Subsection Breakfast CLE Program on May 5.

CBA-CLE Information

Unless noted, programs are held at the CBA-CLE offices, 1900 Grant St. Ste. 300, Denver

Limited Liability Companies in Colorado
Wednesday, March 4, 8:45 a.m. to 5 p.m.

Regardless of your practice, you need to know and understand limited liability companies. Issues involving this flexible and common form of business entity arise in litigation, transactions, estate, business and tax planning, real estate development and beyond. In one day, you can learn the ins and outs of LLC formation, best drafting practices, rights and obligations, duties, creditors’ rights, and more from seasoned professionals, Herrick Lidstone and Allen Sparkman. Every attendee receives a copy of the new CBA-CLE book, Limited Liability Companies and Partnerships in Colorado, 1st Ed., by Herrick K. Lidstone Jr. and Allen Sparkman.

The program is offered for 8 general CLE credits, including 1 ethics. Learn more, view faculty, and register online.

Top Tax Tips for Solo and Small Law Firms in 2015 
Monday, March 9, noon to 1 p.m.

Not only will you learn about the 2014 tax rates, including Social Security, but also about the advantages and disadvantages of the S-corporation for your solo/small firm for tax purposes. You will get answers to your questions on the enhanced advantages of auto and office in home deductions, and employee benefits to avoid payroll taxes. You’ll hear about the small business health care tax credit, and more!

The program is offered for 1 general CLE credit. Learn more, view program faculty, and register online.

Oil and Gas Law Advanced Topics 2015
Thursday, March 12, 9 a.m. to 4:45 p.m. (option to purchase lunch)

Program topics include: The Legal Framework for Oil and Gas in the Rocky Mountain West; Emerging Issues in Title and Curative; Midstream—What It Is, How It Works, and What’s New; Ethics: Duties of Confidentiality, Landman Law Practice, Multijurisdictional Practice Issues; Master Limited Partnerships (MLPs): A New Wave; and Federal Access: A Potpourri of Emerging Issues.

The program is offered for 8 general CLE credits including 1 ethics. Learn more, view program faculty, and register online.

47th Annual Rocky Mountain Securities Conference
Thursday, May 7, from 7:50 a.m. to 5:10 p.m.

This is the Rocky Mountain Region's premier securities conference presented by many of the country’s most knowledgeable securities practitioners—with keynote speaker Hon. Mary Jo White, SEC Chair. With unmatched networking opportunities, you can learn from local, statewide, and national practice leaders.
Topics include:

  • Enforcement Update: Current National and Regional Priorities, Legal Developments, and Notable Cases
  • The View from the Defense Side
  • A Conversation with the Division of Corporation Finance
  • Ethical Considerations in the SEC’s Whistleblower Program
  • Regulated Entities—Hot Topics
  • Audit Committees: Operating in an Environment of Increased Regulatory Scrutiny
  • Reg D and Crowdfunding: Practice and Regulatory Update
  • General Counsel Roundtable
  • The Boundaries of “Ethical” Representation—Defense and SEC Perspectives
  • Flash Courses: To Cooperate or Not to Cooperate? That is the Question; Litigating with the SEC: Does Forum Matter?; Fees in an Evolving Asset Management Industry

The program will be held at the Denver Marriott City Center, Denver, CO. The program is offered for 8 general CLE credits including 1 ethics. Learn more and register online.

Save the Date! Closely Held Businesses on April 30

Co-sponsored by the Business Law Section of the Colorado Bar Association

  • Ethical Minefield of Advising Family Owned Businesses, Karen Brady
  • ACA Impact on Small Businesses, Kirsten Steward, Sherman and Howard
  • Issues in Probating Business Interests, Nancy Crow, Pendleton, Wilson Hennesey and Crow
  • Charitable Planning Using Closely Held Business Interests, Jeff Gott, Waterstone
  • Family Dynamics of Small Businesses, Terri Finney and David Cohn, DaVinci Consulting
  • Financials and Accounting in Small Businesses, BKD CPAs
  • Security Issues for Closely Held Businesses, Gil Selinger, Fairfield and Woods

13th Annual Rocky Mountain Intellectual Property & Technology Institute
Thursday & Friday, May 28–29

The 2015 Rocky Mountain IP & Technology Law Institute provides a guide to how the new realities of protecting innovation, the rise of data security and privacy breaches and liability, social media and Big Data are affecting the way you practice. Four simultaneous tracks of sessions, led by practice and thought leaders nationwide, will examine how IP, tech and transactional law have changed and may impact the advice you give clients about protecting their innovations, commercializing those innovations through licensing, or funding or selling their enterprises.

The program will be held at the Westin Westminster Hotel, 10600 Westminster Blvd., Westminster, CO. The program is offered for 15 general CLE credits including 2 ethics. Learn more and register online.

Recent Homestudies

Check out the complete catalog of CLE Homestudies—search by practice area or credits.

New CBA-CLE Book

Limited Liability Companies and Partnerships in Colorado, 1st Ed.
By Herrick K. Lidstone Jr. and Allen Sparkman

Colorado Bar Association CLE is pleased to offer its newest business law treatise, Limited Liability Companies and Partnerships in Colorado, to practitioners as they advise clients on issues from the time of a business’s formation to the time of dissolution. Limited Liability Companies and Partnerships in Colorado walks the practitioner through choice of entity, formation and dissolution of the entity, creditor rights, securities and tax issues, as well as ethical considerations. Sample multi-member and single-member operating agreements included in the appendices provide an invaluable resource. To assist in research, the desk book contains a useful subject index and table of authorities, as well as a fully searchable CD-ROM.

Two outstanding attorneys, Herrick Lidstone and Allen Sparkman have provided their vast experience, diligence, and thoroughness in authoring this new book. Learn more and order the book online.

Contributions for future newsletters are welcome —
Contact Ed Naylor at ed.naylor@moyewhite.com or 303-292-2900

This newsletter is for information only and does not provide legal advice.

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