By: Carl Koerner

I was on a flight one time when the pilot announced a delay to check a mechanical issue. He said it was probably nothing, but “we always prefer to be down here wishing we were up there, than up there wishing we were down here.” It stayed with me. Of late there has been much chatter about the global economy and whether the tea leaves are predicting a correction or worse in our economy at home. So much so, that I wonder if the iconic phrase “winter is coming” will be worn out before the final season of Game of Thrones even begins. Maybe what we are experiencing is just uncertainty before the next big growth spurt. But like our pilot, wouldn’t we all be better off if we prepared for a recession that never comes rather than finding ourselves unprepared for one that does? (more…)

By: Howard Jiang

Since the Enron debacle, the Financial Accounting Standards Board (FASB) has paid a lot of attention to the types of entities that were used by Enron to avoid its financial reporting obligations. The FASB released Accounting Rule Bulletin No. 51 (ARB 51) and later FASB Interpretation No.46, as revised (FIN46(R)) to shed more light on Variable Interest Entities (VIE) in which an investor has control of a company that is not based on ownership of a majority of the voting interests and the factors that trigger financial consolidation obligations.

ARB 51 requires that an enterprise’s consolidated financial statements include all subsidiaries in which an enterprise has a controlling financial interest. That rule had historically been applied to circumstances in which an enterprise had control through holding a majority voting interest. However, the financial structuring engaged in by Enron and other entities of that era revealed a weakness in focusing solely on majority voting control as there are other situations in which a party could have a controlling financial interests but not control the majority of the voting interests or in which the equity investors do not bear the actual financial risk.

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By: Michael Psathas

On July 17, 2018, the United States House of Representatives overwhelmingly passed a bipartisan package of reforms to help facilitate capital formation and spur entrepreneurship. The JOBS and Investor’s Confidence Act (JOBS Act 3.0) is a compilation of 32 individual bills that is intended to ease regulatory burdens for smaller and mid-sized companies raising capital. In addition, the legislation would require the Securities and Exchange Commission (SEC) to conduct various studies of current regulations to assess the costs and benefits of such regulations. While the JOBS Act 3.0 appears to garner bipartisan support in Washington, it is unclear whether the United States Senate will hold a vote on the legislation prior to the midterm elections in November. (more…)

By: Michael Psathas

The state of New Jersey recently amended its corporate laws under the New Jersey Business Corporation Act (NJBCA) in an effort to provide clarity for companies incorporated within the state. The changes closely align with Delaware law and provide guidance to business owners on a host of important issues concerning the operations of corporations. The changes became effective on January 16, 2018. (more…)

By: Tina Zheng and Michael Psathas

On January 26, 2018, the US Federal Trade Commission (FTC) announced annual revisions to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the HSR Act) notification thresholds. Under the HSR Act, parties to certain transactions are required to make notification filings and observe a statutorily prescribed waiting period (usually 30 days) prior to consummating such transactions. The changes increase the minimum value of a transaction that could trigger an HSR filing with the FTC and the Antitrust Division of the US Department of Justice. The FTC is required by law to revise the notification thresholds annually, based on the change in gross national product. (more…)