On Dec. 26, 2024, the US Court of Appeals for the Fifth Circuit reinstated the nationwide preliminary injunction that enjoins enforcement of the Corporate Transparency Act (“CTA”), including the filing deadlines thereunder. The Fifth Circuit’s Dec. 26th order vacates the December 23rd order that had stayed the nationwide preliminary injunction pending the government’s appeal on the merits.   The ruling effectively postpones the enforceability of the CTA and its reporting requirements.
Further Hearings Necessary
The Fifth Circuit determined that there was no harm in continuing the injunction until there was a full hearing on the merits of whether the new law…
Continue Reading CTA Compliance Update #3

On December 23, 2024, a three-judge panel of the Fifth Circuit Court of Appeals stayed the lower court’s nationwide injunction against the Corporate Transparency Act (“CTA”). The ruling effectively revives the immediate enforceability of the CTA and its reporting requirements.
Just three weeks prior, on December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction that temporarily  blocked the enforcement of the CTA its reporting rule (“Reporting Rule”). This ruling effectively halted the requirement for reporting companies to disclose beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN) despite the impending…
Continue Reading CTA Compliance Update #2

The Corporate Transparency Act dominated our days in November as clients dissolved unused entities, updated current entities and considered changes to their corporate structure.  Making sure each entity’s records conformed with the records of the Arizona Corporation Commission and Secretary of State’s office turned out to be a larger project than most anticipated.  In the end, a Texas court placed a nationwide injunction on enforcement of the Act.  For more on that lawsuit see CTA Injunction Update.  For those businesses that have not complied, it gives us additional time to gather the information and clean up entities, making it…
Continue Reading November Corporate Transparency Act

Long time Phoenix entrepreneurs started a new business venture and engaged DeAngelis Legal to assist with the preparation of a comprehensive operating agreement between the current owners and a phantom stock incentive plan for key employees.  The operating agreement contained transfer restrictions, modified voting rights, buy-out provisions upon death, disability, bankruptcy and deadlock, a mechanism for determining the purchase price and a funding plan. The phantom stock plan and grant documents created a pool of funds upon the sale of the company through which employees could receive incentive compensation.  The documents also provided for a vesting period for employees.
The…
Continue Reading November Operating Agreement and Phantom Stock Plan

On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction temporarily blocking the enforcement of the Corporate Transparency Act (“CTA”) and its reporting rule (“Reporting Rule”). This ruling effectively halts the requirement for reporting companies to disclose beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN) despite the impending January 1, 2025 deadline for reporting companies formed prior to 2024 to comply with the CTA.
The Court’s Ruling
The court’s decision was based on its assessment that the CTA and the Reporting Rule likely violate constitutional protections and likely exceeded…
Continue Reading Corporate Transparency Act Update

An irrevocable trust held title to vacation properties and an operating fund used for family reunions.   The trustee engaged DeAngelis Legal to assist with the trust administration.  Certain members of the family desired to continue to use the property, while others were ready to liquidate the trust and distribute the proceeds.  Unfortunately, title to the property was subject to transfer restrictions which would potentially allow an unrelated third party to purchase the vacation properties upon a transfer.  DeAngelis Legal reviewed the pertinent documents and resolved the matter by having the beneficiaries enter into a non-judicial settlement agreement whereby the beneficiaries…
Continue Reading October Trust Administration

Phoenix high net worth couple on their second marriage engaged DeAngelis Legal to update their estate plan prepared by another prominent estate planning law firm.  In addition to incorporating their changes, DeAngelis Legal reviewed their current plan, updated the language and eliminated ambiguous and sometime conflicting provisions between documents.  DeAngelis Legal also worked with their separate attorneys to prepare and sign an amendment to their marital agreement reflecting the terms of the new plan.
The post October Complex Estate Plan appeared first on DeAngelis Legal.
Continue Reading October Complex Estate Plan

Quinn crewed on the sailing yacht Yagiza in the 45th Rolex Middle Sea Race.  The 600+ nautical mile route took him through a heavy squall the first afternoon that knocked many of the boats out of the race, a full day fighting the current in the Strait of Messina watching Mount Etna ever so slowly pass by, a beautiful sail by the active volcano Stromboli, and a fast and fun trip by Lampedusa before finishing second in IRC Class 4.  He enjoyed is time in Malta, with its rich history, great food and of course, great boat watching.
The post…
Continue Reading October Rolex Middle Sea Race

Connelly and Buy-Sell Agreements – Is it time for a new strategy?
On June 6, 2024, the Supreme Court of the United States decided the case of Connelly v. United States, 144 S. Ct. 1406. The Connelly decision significantly impacts business succession planning using buy-sell agreements funded with life insurance. The Court (i) disregarded the valuation determined under the redemption agreement because it did not qualify under one of the exceptions, (ii) agreed with the IRS that the proceeds of the life insurance increased the value of the business and (iii) that the value of the business was not offset by…
Continue Reading Connelly and Buy-Sell Agreements – Is it time for a new strategy?

Most businesses utilize form documents with customers, suppliers or vendors developed and obtained from different industry sources over time. While form documents are good reference points, the agreements should be reviewed to ensure the terms are internally consistent and comply with Arizona law. Often, we find provisions which are ambiguous, have undefined terms or are unenforceable. While this article focuses on liquidated damages provisions, other contract provisions that warrant further analysis include agreements to agree, restrictive covenants and indemnification provisions.
Compensatory Damages v. Punitive Damages
The general principle governing damages for breach of contract is that the non-breaching party is…
Continue Reading Contract Drafting – Liquidated Damages Provisions

It started out as a good deed, turned into a two-year battle and resulted in a happy accident for this Arizona couple.   Lack of business acumen of the opposing party, no documentation, poor accounting, differing legal systems and language barriers made this a difficult matter to resolve.  DeAngelis Legal worked with the client’s US accountants and tax advisors, the client’s foreign lawyers and accountants and opposing counsel to reach a global resolution without litigation.  The agreement resulted in the operators surrendering possession of the real property and our clients becoming the sole owners of two foreign entities holding a bed…
Continue Reading September Real Estate Acquisition

DeAngelis Legal was engaged by a Scottsdale couple to assist them with a business divorce from their co-owner.  The owners wanted to end their working relationship with each other and looked for alternatives to dissolving or selling the entity to a third party.  However, the parties could not agree on terms or even the process for arriving at acceptable terms.  DeAngelis Legal worked with the other owner’s attorney to identify areas of agreement and narrow the issues holding up a transaction.  After evaluating numerous alternatives the parties agreed on a structure acceptable to all parties, wherein one party bought out…
Continue Reading September 2024 Sale of LLC Interests

Current Arizona corporate client had an opportunity to buy a specific purpose industrial property from a large multinational corporation.  DeAngelis Legal advised the client regarding the appropriate terms of the transaction, prepared a letter of intent outlining those terms and negotiated contested issues with the seller.  Both parties signed the letter of intent and the buyer is currently conducting its due diligence on the property.
The post August 2024 Industrial Real Estate Letter of Intent appeared first on DeAngelis Legal.
Continue Reading August 2024 Industrial Real Estate Letter of Intent