• Article

    Michael Friedman, Chapman's Israel practice head and practice leader for the firm's Special Situations and Restructuring Group, and associate Helena Honig, authored an article for the US-Israel Legal Review 2022, published by Israel Desks.

  • Client Alert

    On March 15, 2023, the U.S. Securities and Exchange Commission (“SEC”) issued a series of proposals designed to improve firms’ preparedness and responses to cyber incidents. The proposals, which would impact many of the financial services industry participants regulated by the SEC, generally require that firms establish policies and procedures to better prevent and detect cyber incidents and disclose certain cyber incidents to clients and the SEC within specified time periods.

  • Client Alert

    On January 25, 2023, the U.S. Securities and Exchange Commission (“SEC”) issued a proposed rule to prevent and avoid material conflicts of interest in certain securitization transactions. The rule would prohibit securitization participants from engaging in certain transactions that could incentivize structuring an asset-backed securities (“ABS”) transaction in a way that would put the securitization participant’s interests ahead of the interests of the ABS investors.

  • SVB Update

    On March 14, 2023, an announcement from the CEO of the newly-created, full-service FDIC-operated Bridge Bank was posted on the Silicon Valley Bank website indicating that the Bridge Bank has “fully stepped into the shoes of the former Silicon Valley Bank.”

  • SVB Update

    On Monday, March 13, 2023, the Federal Deposit Insurance Corporation transferred all deposits—both insured and uninsured—and substantially all assets of the former Silicon Valley Bank to Silicon Valley Bank, N.A, a newly created, full-service FDIC-operated ‘bridge bank’. The FDIC has not stated whether the bridge bank has assumed funding obligations under the former Silicon Valley Bank’s unfunded loan commitments.

  • SVB Update

    Included in this Frequently Asked Questions are some general observations on the Federal Deposit Insurance Corporation (“FDIC”) receivership process for Silicon Valley Bank (“SVB”). The specifics of the receivership process are uncertain at this early stage and, hopefully, more guidance with respect to the issues discussed below will be provided by the FDIC over the next few days.

  • Client Alert

    On February 13, 2023, the IRS released Notices 2023-17 and 2023-18, which provide guidance on energy incentive tax credit provisions that were amended by the Inflation Reduction Act of 2022 (the "IRA"). Taxpayers and their advisors have been eagerly awaiting guidance on many aspects of the IRA's changes. The guidance in Notices 2023-17 and 2023-18, however, does not cover many of the most pressing issues regarding the new tax credit rules, such as the details of how to obtain a refund of tax credits under the new “direct pay” provision and how to comply with the prevailing wage and apprenticeship requirements. The IRS has stated that it will issue additional guidance on the IRA's changes to existing tax credit provisions in the future.

  • Client Alert

    The U.S. Supreme Court recently took up In re Grand Jury, No. 21-1397, from the U.S. Court of Appeals for the Ninth Circuit to address a common, recurring, and sometimes vexing question as to attorney-client privilege: how to apply the privilege to communications with counsel that contain both legal and non-legal advice? This is a particularly important question for corporate in-house counsel who, as the courts often say, “wear two hats,” providing both legal and business or policy advice to their employers.

  • Client Alert

    On February 22, 2023, the New York Stock Exchange (“NYSE”) proposed the adoption of new listing standards contained in the Corporate Governance section of the NYSE Listed Company Manual (the “Manual”). New Section 303A.14 would “require issuers to develop and implement a policy providing for the recovery of erroneously awarded incentive-based compensation received by current or former executive officers.”

  • Client Alert

    On February 15, 2023, the U.S. Securities and Exchange Commission (the “SEC”) adopted rule changes to Exchange Act Rule 15c6-1, shortening the standard settlement cycle for most broker-dealer transactions in securities from two business days after the trade date (T+2) to one day (T+1).

  • Client Alert

    On February 15, 2023, by a vote of 4 to 1 with only Commissioner Peirce voting no, the U.S. Securities and Exchange Commission proposed to amend the content of Rule 206(4)-2 under the Investment Advisers Act of 1940 (the “Advisers Act”), known as the Custody Rule, and redesignate it as Rule 223-1 under the Advisers Act, now known as the Safeguarding Rule. If adopted, the proposal would, among other things, expand the coverage of the Advisers Act’s custody provisions beyond “client funds and securities” to include any client assets of which an adviser has custody, a change that would bring within the rule’s coverage all digital assets, including non-securities such as commodities. Such a change would impose a requirement on many investment advisers that hold client assets to place those assets with a “qualified custodian,” despite a current lack of widespread availability of such service providers for many digital assets.

  • Client Alert

    The much anticipated updated regulations for disclosure requirements for commercial financing in New York have been adopted by the New York Department of Financial Services ("NYDFS"). 

  • Chapman Insights

    This Chapman Insights article is part of our ongoing series on Real Estate Investment Trust (REIT) financings. 

  • Article
    January 2023 (Originally Published August 23, 2022)

    Pratt's Journal of Bankruptcy Law republished a Chapman Client Alert.

  • Client Alert

    At a time when the digital asset market is badly in need of good news, the International Swaps and Derivatives Association (ISDA) has delivered the long-awaited ISDA Digital Asset Derivatives Definitions (the “Definitions”).

  • Chapman Insights

    This Chapman Insights article is the first in a series on Real Estate Investment Trust (REIT) financings and focuses on collateral structures. A REIT may incur indebtedness for a variety of purposes, including to smooth out cash flow, as a bridge to an additional capital raise, and/or to leverage its assets for the purpose of acquiring additional assets. While there are many different forms this indebtedness can take — from bank debt to bond issuances — this article highlights considerations when the debt incurred is from a bank or bank group.

  • Chapman Insights

    The Inflation Reduction Act (the “IRA”), which became law in August 2022, provides one of the most significant packages of renewable energy incentives in recent history. Most of the renewable energy provisions take the form of extended and expanded tax credits, which apply to investments in solar, wind, geothermal and other nontraditional energy resources. One tax credit provision of the IRA that will be of interest to ordinary consumers are the changes to the tax credit for taxpayers who purchase an electric vehicle (the “EV tax credit”).

  • Chapman Insights

    The Inflation Reduction Act (the "IRA") is being hailed as one of the most significant legislative actions in recent history intended to incentivize investment in renewable energy technologies. The IRA generally achieves this through the extension and broadening of existing tax credit provisions that apply to investments in clean energy technologies such as solar, wind and geothermal. Since the IRA became law in August 2022, taxpayers have been eagerly awaiting regulations and other guidance on how to apply the new provisions and how to claim the tax credits. On November 30, 2022, the IRS issued the first item of guidance on these provisions in the form of IRS Notice 2022-61 (the "Notice").

  • Chapman Insights

    The NAIC’s multi-year process of modifying its accounting rules to confirm which debt instruments qualify as bonds for regulatory accounting purposes is of interest to insurance companies that use rated notes issued by feeder funds to facilitate their investments in private credit funds. This Chapman Insights article addresses the scope and current status of those modifications and the impact of those modifications on such rated notes.

  • Chapman Insights

    The Inflation Reduction Act (the “IRA”), which became law on August 16, 2022, includes only a handful of tax provisions. Though few in number, the new provisions are expected to have a major impact on taxpayers. The corporate minimum income tax and excise tax on stock buybacks are both entirely new tax regimes implemented under the IRA. In addition, the IRA has introduced major changes to the investment tax credit (the “ITC”) and the production tax credit (“PTC”), which are intended to encourage investment in renewable energy projects, such as solar and wind projects.

  • Client Alert

    The success of Ultra Petroleum bondholders’ make-whole claims is grounded in the unusual circumstance of a solvent debtor, with the Fifth Circuit unambiguously holding that make-whole entitlements in non-solvent-debtor cases must be disallowed.

  • Report

    Chapman represented the Chamber of Digital Commerce in connection with its “Spot Bitcoin ETF Initiative” which set out to gain a deep understanding of the industry’s experience in pursuit of a registered Spot Bitcoin ETF and provide insight into the most realistic avenues for ultimately getting the SEC to approve this widely anticipated investment product.

  • Client Alert

    On June 14, 2022, the Securities and Exchange Commission charged the City of Rochester, New York, Rosiland Brooks-Harris, the former finance director of the City, Everton Sewell, the former chief financial officer of the Rochester City School District, and Capital Markets Advisors and its principal Richard Ganci with fraud in connection with the 2019 sale of $119 million in municipal bonds.

  • Client Alert

    The Securities and Exchange Commission is taking significant steps to combat “greenwashing,” which occurs when a company conveys false or misleading information to overstate its environmental or sustainability practices, as well as other activities the SEC perceives to be potentially misleading to investors with respect to a company’s ESG efforts.

  • Client Alert

    In an opinion issued on June 15, 2022, the Delaware Supreme Court reversed a decision by the Chancery Court and found that a transfer by an insolvent corporation of substantially all of its assets to a newly created entity (“SeeCubic”) controlled by its secured creditors, in full satisfaction of its debts, violated the corporation’s charter.

  • Client Alert
    April 7, 2020 (Updated June 28, 2022)

    On February 19, 2020, the Small Business Reorganization Act came into effect and Debtors with aggregate liabilities that do not exceed $2,566,050 were provided an opportunity to resolve their outstanding liabilities. But even before the SBRA could see its first successes (or failures), the Coronavirus Aid, Relieve and Economic Security Act of 2020 increased a small business’s debt threshold to $7.5 million.

  • Client Alert

    On June 2, 2022, the Securities and Exchange Commission charged the Town of Sterlington, Louisiana, its former mayor, Vern A. Breland, the town’s unregistered municipal advisor, Twin Spires Financial LLC and its owner, Aaron B. Fletcher with fraud in connection with the sale of $5.8 million in municipal bonds in two offerings in 2017 and 2018. 

  • Client Alert

    The Delaware Supreme Court is currently considering an appeal of a series of decisions by the Court of Chancery which held that a vote of a majority of shareholders is not required for an insolvent company to transfer its assets to its secured creditors.

  • Article
    May 2022

    This article in the Journal of Corporate Renewal, authored by Chapman Partner Scott A. Lewis, outlines the legal developments stemming from Puerto Rico's economic crisis. 

  • Client Alert

    As interested parties look for more direction on Environmental, Social and Governance (“ESG”) matters, the Loan Syndication and Trading Association (“LSTA”) recently issued new Guidance for Green, Social, and Sustainability-Linked Loans External Reviews (“External Review Guidance”) and Guidance on Social Loan Principles (“Social Loan Principle Guidance”). A summary of this guidance is below.

  • Client Alert

    At the urging of investors and in accordance with the Biden Administration’s climate agenda, the United States Securities and Exchange Commission (“SEC”) yesterday issued long-awaited new proposed rules to increase climate-related disclosures. The Enhancement and Standardization of Climate-Related Disclosures for Investors (the “Proposed Rule”), if finalized, would amend the SEC’s rules under the Securities Act of 1933 and Securities Act of 1934 to require that registrants provide robust climate related information in their registration statements and annual reports. The rule would apply to all domestic and foreign companies required to be registered with the SEC.

  • Client Alert

    On February 10, 2022, the Securities and Exchange Commission (the “SEC”) proposed amendments to certain rules and regulations under the Exchange Act of 1934, as amended (the “Exchange Act”), that govern beneficial ownership reporting (the “Proposed Amendments”).1 The SEC provided that updating these reporting requirements for modern advances in the securities market will reduce information asymmetries and promote transparency and address the timeliness of key filings. Specifically, the Proposed Amendments are aimed at, among other things: (i) shortening deadlines regarding filing of Schedule 13D and Schedule 13G; (ii) clarify how certain derivatives acquired with control intent are treated with respect to beneficial ownership reporting; and (iii) clarify when a “group” is formed for purposes of beneficial ownership reporting.

  • Chapman Insights

    The Public Finance Initiative (PFI) and the National League of Cities (NLC) have launched the Bond Markets and Racial Equity Project to identify the factors in a municipal bond issuance that signal progress toward racial equity and income equality to investors and other stakeholders. Additionally, PFI and NLC will use the Project to develop resources that can be used by governmental issuers to center racial equity in municipal bond-funded infrastructure investments and to measure how social determinants of equity change over time on a uniform basis. The unprecedented Project is funded by a $4M grant from the Robert Wood Johnson Foundation. By funding the Project, the Foundation aims to help issuers leverage the municipal bond market in a meaningful way to help correct racial and economic inequities. 

  • Client Alert

    The proliferation of investments in small, family-owned and mid-cap companies by private equity funds has led to changes in corporate governance provisions in the acquired companies’ organizational documents. Some private equity funds team up with existing management and take a minority position in the acquired company, while others will make an investment only if they can acquire controlling interest or 100 percent ownership of a company. In cases where a fund acquires a controlling interest in a company, it will often populate the company’s governing body with the fund’s principals or employees and the company’s chief executive. The fund may also seek to add outside directors with industry expertise to help govern the company. Where a private equity fund acquires a non-controlling interest, it will often seek to protect its investment by having consent and/or veto rights for certain significant transactions – for instance, the incurrence of debt, issuance of additional equity, and acquisition or disposition of assets. Thus, the organizational documents of a company may contain provisions restricting certain activities without the requisite consent of certain directors or equity holders.

  • Chapman Insights

    Environmental, Social and Governance (“ESG”) investing continued to grow throughout 2021 and this growth is expected to continue into 2022 as ESG investments are estimated to surpass $41 trillion in assets under management globally by the end of the year. ESG investing occurs when investors make investment decisions based on a company’s environmental, social and governance policies and performance alongside traditional financial metrics. As investment firms, lending institutions, and individual investors are increasingly looking at ESG factors to identify material risks and growth opportunities, a number of trends are expected to emerge in the upcoming year. These include regulation of ESG disclosures, growth in green technology, renewable energy and infrastructure investments, and heightened standards associated with sustainable finance.

  • Client Alert

    On February 9, 2022, the Securities and Exchange Commission (the “Commission”) voted 3 to 1 to propose new and amended rules under the Investment Advisers Act of 1940 (the “Advisers Act”) to require advisers to private funds to provide additional disclosures to investors in such funds, prohibit certain types of preferential treatment to investors and impose new requirements related to fund audits, books and records and adviser-led secondary transactions.

  • Client Alert

    On January 18, 2022, Judge Laura Taylor Swain of the United States District Court for the District of Puerto Rico entered an order under PROMESA (as defined below) confirming a Plan of Adjustment (the “Plan”) of the Commonwealth of Puerto Rico (the “Commonwealth”), the Employees Retirement System of the Government of Puerto Rico (the “ERS”), and the Puerto Rico Public Buildings Authority (the “PBA”).1 The Plan’s confirmation is a major milestone for the Commonwealth and its creditors. The Commonwealth’s restructuring proceeding under Title III of PROMESA is the largest municipal restructuring in United States history.

  • Client Alert

    On December 22, 2021, in a memorandum opinion on a motion to dismiss, the Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) (i) provided further guidance as to what qualifies as “voluntary” redemption of debt for purposes of make-whole claims, (ii) held that, without more, a make-whole payment is not triggered by a redemption automatically resulting from a voluntary bankruptcy filing, if the governing contract only provides for payment of such premium prior to “maturity” and (iii) determined that neither the Bankruptcy Code nor the “solvent debtor exception” requires a solvent debtor to pay an unimpaired unsecured creditor post-petition interest at the applicable contract rate, finding that payment of interest at the federal judgment rate is sufficient. The Bankruptcy Court left open whether make-whole claims could be disallowed as unmatured interest.

  • Client Alert

    The Internal Revenue Service (“IRS”) has released a revised Form 8038‑CP, Return for Credit Payments to Issuers of Qualified Bonds, including new Schedule A, Specified Tax Credit Bonds Interest Limitation Computation and related instructions. The form and instructions were updated to accommodate electronic filing of Form 8038‑CP in 2022.

  • Chapman Insights

    As originally discussed in our 2019 Action Item, the continuing, low interest rate environment has caused many insurance companies to turn to private credit funds to diversify their credit portfolios and increase their returns. Private credit funds that offer insurance companies the opportunity to participate in their funds indirectly through a rated-debt feeder fund structure provide insurance companies an opportunity to lower their risk-based capital requirements when compared with investing directly in such credit funds. As discussed in our 2021 Chapman Insights, investing in private credit funds through a rated-debt feeder structure is not without legal complexities, but many insurance companies have found those complexities to be worth the regulatory capital relief that may be available by investing through a rated-debt feeder structure.

  • Client Alert

    The IRS published final LIBOR transition regulations in the Federal Register on January 4, 2022. The regulations allow modifications of debt instruments and other contracts to replace LIBOR without triggering a reissuance or deemed exchange if certain conditions are met.

  • Article

    This article in the Journal of Taxation of Financial Products outlines tax-exempt municipal debt securitization transactions and associated tax issues. Chapman authors, David Nirenberg, Brent Feller, and Steven Kopp, provide an in-depth look at the primary tax issues for parties to both single-class and multiple-class tax-exempt bond securitization transactions.

  • Client Alert

    The Occupational Safety and Health Administration released its anticipated COVID-19 Vaccination and Testing: Emergency Temporary Standard, which will require that workers at large private sector businesses be vaccinated or undergo weekly COVID-19 testing.

  • Client Alert

    On September 16, 2021, the Securities and Exchange Commission charged Sweetwater Union High School District, a San Diego County, California, school district serving approximately 47,000 students, and its former Chief Financial Officer, Karen Michel, with making material misstatements and omissions in connection with the District’s April 2018 $28 million bond issue.

  • Chapman Insights

    Lenders and investors are taking different approaches to building ESG portfolios based on the entity’s own preferences and values. However, one widely used tool involves screening of select assets or transactions that align with those values.

  • Article
    September 2021

    The US Securities and Exchange Commission Division of Examinations has released its 2021 Examination Priorities. A discussion of the exam priorities is included in this article.

  • News
    July 2021

    We are pleased to share highlights of the firm’s environmental, community, and justice initiatives over the past year. Chapman’s Social Impact and Sustainability Communication on Progress report was prepared with guidance from our Social Impact and Sustainability Task Force and is part of Chapman’s commitment to the United Nations Global Compact.

  • Article
    July/August 2021

    In 2017, the Financial Conduct Authority, the U.K. authority that oversees the London interbank offered rate, announced that LIBOR may be phased out after the end of 2021. The announcement applied to all currency and term variants of LIBOR, including U.S. dollar denominated LIBOR.

  • Client Alert

    The date of the General Primary Election to be held in 2022 has been changed from March 15, 2022, to June 28, 2022. On May 31, 2021, the Illinois General Assembly adopted Senate Bill 825, which became Public Act 102-0015 after being signed into law by the Governor on June 17, 2021. 

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