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How should cash and rollover equity be treated in the working capital true-up?A different perspective on two common issues

In this final installment of my working capital series, I will share my perspective on how rollover equity and cash should be considered in the working capital true-up.

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What aspects of working capital should parties to a transaction be able to dispute?To limit disputes, the parties must first accurately define working capital

In this installment of my working capital series, I will suggest how to define working capital and propose some limits on the parties ability to dispute the working capital calculation.

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In a blow to online retailers, U.S. Supreme Court opens the door for states to collect sales tax

In the South Dakota v. Wayfair, Inc. decision issued June 21, 2018, the U.S. Supreme Court held that the physical presence rule previously set forth in Quill Corp. v. North Dakota, 504 U.S. 298, and National Bellas Hess, Inc. v. Department of Revenue of Illinois, 386 U.S. 753, was incorrect. By doing so, the Court opened the door for states to require online retailers to collect and remit sales tax. This decision is viewed as a win for both states, which have seen their respective sales tax bases erode due to the emergence of online retailers, and brick and mortar stores, which have struggled to compete on price with online retailers that have historically not been required to collect sales tax in certain states.

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Stock buybacks are not evil

This year, many companies have announced stock repurchase programs as a result of the influx, or expected influx, of cash resulting from the Tax Cuts and Jobs Act. Despite companies having completely appropriate and legitimate reasons for using their capital to repurchase stock, there are critics of corporate stock repurchase programs who question (i) whether stock repurchases are beneficial to shareholders and (ii) the underlying reasons why companies decide to repurchase their own stock. In this post, Bob Loesch explains why the criticism is unwarranted, misinformed, or in the nature of second guessing the board’s exercise of its fiduciary duties.

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Should parties to a transaction use the working capital true-up to renegotiate purchase price?

In this installment in my series of posts on working capital, I will describe the mechanics of a working capital true-up and discuss why the parties should not consider the working capital adjustment as an adjustment to purchase price.

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Are you properly addressing working capital in your purchase agreement?A different perspective on working capital true-ups in M&A transactions

Almost every M&A transaction includes some form of working capital true-up, and yet many practitioners, including attorneys, accountants, and business development professionals, seem to struggle with this provision. In this series of posts, I will discuss my perspective on the objective the working capital true-up should attempt to accomplish, and identify and explain some of the most common problems that I have seen in my practice with this provision. 

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Is the current antitrust merger review process fair?The proposed SMARTER Act would usefully improve antitrust review

Federal antitrust review of mergers and acquisitions in the United States is a strange system. Whether the Federal Trade Commission or the Department of Justice leads the review determines what rules apply, and ultimately can determine whether the transaction is approved without regard to the merits of the transaction. The SMARTER Act aims to reshape the system to make it more predictable by implementing two changes recommended by the bipartisan Antitrust Modernization Commission in 2007.

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What is reverse veil piercing, and when is it appropriate?

The alter ego doctrine applies – whether “veil piercing” or “reverse veil piercing” – when an entity’s owner dominates the entity to the point that the entity and its owner are indistinguishable. Where the owner uses an entity to commit a fraud or other harm, the court will lift the entity’s “veil of protection” and allow its owner to be sued personally. By contrast, reverse veil piercing allows the owner’s personal creditors to seize an entity's assets to satisfy an owner’s debts. Even the most plaintiff-friendly courts are hesitant to use these remedies. This post analyzes one situation where a California court found the remedy appropriate.

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Diabetic Care RX case is a warning sign for private equityIn an article for Law360, Hewitt and Juvan provide lessons for private equity firms from the U.S. government's recent complaint

The United States government recently sent shock waves through the private equity industry by charging a private equity firm for its portfolio company’s alleged health care fraud. In a recent article for Law360, corporate partners Chris Hewitt and Jayne Juvan provide a few lessens for private equity firms gleaned from the government's complaint in United States ex rel. Medrano v. Diabetic Care RX LLC d/b/a Patient Care America.

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Chambers USA ranks Tucker Ellis's General Corporate/M&A/Securities practice and attorneysChristopher Hewitt and Robert Loesch ranked individually

Tucker Ellis is proud to announce that Chambers USA has ranked its General Corporate/M&A/Securities practice group among Ohio's leading Corporate/M&A practices for 2018.  In addition, Chambers recognized partners Christopher Hewitt and Robert Loesch as notable practitioners in the group.  Chambers identifies and ranks the most outstanding law firms and lawyers in 185 jurisdictions throughout the world based on the research of more than 170 full-time editors and researchers who conduct in-depth telephone interviews with lawyers and clients year-round.

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