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STRATUM

Business Law Section Newsletter

Business Newsletter Header
April 2016
From the Colorado Bar Association
Business Law Section

Ed Naylor, Editor
In this issue...
Compliance Review Committee Privilege

By Keith F. Woods, Markus Williams Young & Zimmermann LLC

In 1999, with the support of the Colorado Bankers Association and the Independent Bankers Association, the Colorado legislature enacted legislation that established a privilege against the discovery of “compliance review documents” in any civil action.  This legislation, codified in C.R.S. § 11-71-101 through § 11-71-103, provides that compliance review documents, including those which have been delivered to a federal or state government agency, are confidential and not discoverable or admissible in any civil action arising out of matters evaluated by a compliance review committee (the “CRC Privilege”).  In enacting this legislation, the Colorado legislature found that “compliance review committees are essential to the operation and performance of financial institutions and that the public would receive a benefit from incentives to depository institutions to identify and remedy compliance issues.”

Definitions 

The CRC Privilege statute defines a “depository institution” as an entity organized to receive deposits which is supervised or examined by a state or federal government agency for the protection of depositors.  Trust companies organized under Article 109 of Title 11 of the Colorado Revised Statutes are also defined as depository institutions for purposes of this statute.  A “compliance review committee” is defined in the statute as an audit committee, loan review committee, or compliance committee appointed by the board of directors of a depository institution, or any other person who is not an employee or director of a depository institution who acts in an investigatory capacity at the direction of such a committee.  “Compliance review documents” are documents exclusively prepared for or created by the CRC.  Not only are compliance review documents not discoverable under the CRC Privilege, persons are prohibited from testifying in any civil proceeding about his or her participation in the collection, evaluation, reporting or use of compliance review documents or their contents, and any such testimony offered is inadmissible (C.R.S. § 11-71-103(2)(b)). Government agencies’ examination and use of compliance review documents are specifically excepted from the application of the privilege. 

Interpreting the Privilege 

The only reported Colorado decision reviewing Colorado's CRC Privilege is Security Service Federal Credit Union v. First American Mortgage et al., 861 F. Supp. 2d 1256 (U.S.D.C. Colo. 2012). The Federal District Court was called on to determine whether Colorado law, having the CRC privilege, or California law, with no CRC privilege, applied. The court determined that the communications in question occurred in Colorado and pertained to an investigation by one Colorado corporation performed for another Colorado corporation in response to regulatory concerns from a Colorado agency. The court found that "as the forum state, Colorado has a strong policy interest in enforcing its own privileges to protect communications made entirely within the state between two Colorado corporations." Id. at 1273. The court went on to state: "I express no opinion on the scope of the CRC privilege that SSFCU wishes to exercise in this case."

With only one reported case addressing the CRC Privilege decided on jurisdictional grounds, it remains to be seen how broadly or narrowly courts will interpret and apply the privilege.  Issues that could present themselves for determination include whether reports, underwriting memos, and similar documents which were not initially prepared for a CRC but are later incorporated into and become a part of compliance review documents are entitled to the privilege; and whether a loan committee that decides whether to approve or decline a proposed loan which also has responsibility to determine whether the proposed loan complies with regulatory rules and the financial institutions underwriting standards qualifies as a CRC.  While the CRC Privilege statute specifically provides that appraisals obtained by depository institutions are not subject to the privilege, arguments could be made that an appraisal review report prepared by a depository institution’s internal appraisal review department is a compliance review document entitled to the privilege provided by the statute.

Conclusion

The CRC Privilege was enacted to encourage the honest and thorough assessment by financial institutions of the institution’s compliance with regulatory rules and loan underwriting standards.  The privilege protects compliance review documents prepared for a CRC from discovery in civil actions. Attorneys representing financial institutions reviewing discovery requests should assess the applicability of the CRC Privilege in determining whether certain financial institution records should be made available for discovery.

Establishing a State-Owned Bank-- Ballot Initiative 2015-2016 #127

By Deanne R. Stodden, Coan, Payton & Payne, LLC

Ballot Initiative 2015-2016 #127 (“Initiative 127”) was filed with the Colorado Secretary of State’s Office on April 8, 2016, the last day for proposed initiatives to be filed.  In summary, if it makes it on the ballot for November, Initiative 127 will ask Colorado voters to vote yes or no to establishing a Publicly-Owned State Bank.  (Click here to read the full text of Initiative 127.) 

Ballot Process 

Under Colorado law, every proposed constitutional amendment or statutory proposition must be limited to a single subject, which must be clearly expressed in its title.  See Article V, Section 1 (5.5) of the Colorado Constitution and C.R.S. Section 1-40-106.5.  Initiative 127 went before the Initiative Title Setting Review Board (“Title Board”) on April 20, 2016.  The Title Board is comprised of designated officials from the Legislative Council, the Attorney General’s Office, and the Secretary of State’s Office.  The Title Board is tasked with 1) determining if a proposed initiative contains a single subject and if it does 2) setting a title.

The ballot title and submission clause as designated and fixed by the Title Board is as follows:

“Shall there be an amendment to the Colorado constitution concerning the establishment of a publicly owned state bank as an enterprise exempt from the requirements of the Taxpayer’s Bill of Rights, and, in connection therewith, authorizing the bank to lend money for public purposes; requiring all assets of the state held by other financial institutions to be transferred to the bank; creating a seven-member board of directors elected from each state congressional district to manage the bank and a nine-member advisory board appointed by the governor to advise the board of directors; allowing the bank to issue revenue bonds to capitalize itself and to support its facilities and operations; requiring independent annual audits of the bank’s finances; and specifying that the amendment supersedes conflicting constitutional, state and local laws?”

Now that the title for Initiative 127 has been set, any registered elector who believes that the ballot title and submission clause are unfair or do not fairly express the meaning of the proposal may request a rehearing by the Title Board.  A rehearing may also be requested if a registered elector is dissatisfied with the Title Board’s decision relating to the single subject.  Such requests must be made within seven days of the Title Board hearing.  Anyone who is dissatisfied with the Title Board’s action at a rehearing may file an appeal with the Colorado Supreme Court.  The Court is required to act on the appeal promptly when an appeal is filed within five days of receiving the required documentation from the Secretary of State.  The Court usually either affirms the action of the Title Board or reverses it, in which case the Court remands the case to the Title Board with instructions, pointing out where the Title Board erred.

If the ballot title and submission clause are set and the petition form is approved by the Secretary of State, petitions for the proposal may be printed and circulated throughout the state to obtain the required number of signatures. To be placed on the ballot, an initiative must receive five percent of the total votes cast for all candidates for the Office of Secretary of State at the previous general election.

Funding and Operational Issues

Although a proposal to establish a State-Owned Bank has never made it on the ballot in Colorado, this is certainly not the first time a State Bank has been proposed in Colorado. Numerous similar versions of Initiative 127 have been presented in the past, but all failed to make it on the ballot.

Initiative 127 calls for the General Assembly to appropriate funds to enable the bank to purchase or lease land, physical structures and furnishings sufficient for the bank to begin lending operations.  In addition, Initiative 127 calls for the bank to be capitalized from “taxes and other revenues and funds of the state, including other funds such as may be collected currently for the state by other banks, that are not otherwise obligated, other deposits in addition to those from the state as permitted by sound banking practices, and funds generated by revenue bonds issued by the bank.”  Initiative 127 goes on to state that “all specifically allocated funds and other assets of the state normally held by financial institutions shall be deposited and held by the state bank, including money held by other banks for the State of Colorado prior to the establishment of the bank.”

Those of us who represent banks or financial institutions can readily see the myriad of issues with a State-Owned Bank.  How will the bank be capitalized?  If the capitalization is to come from the taxes and other revenues and funds of the state along with revenue bonds who will buy the revenue bonds?  The deposits cannot be considered capital.  Who will insure the deposits?  Who will regulate the bank as it will not be regulated by state and federal regulators?  Can the bank qualify as an “enterprise” under TABOR? While some of us may see the issues with Initiative 127, the more important question is – if Initiative 127 makes it on the ballot, will the voters?  The answers remain to be seen.

Joint Venture Interests As Securities For the Seventh and Final (?) Time

Rome v. HEI Resources, Inc., Denver District Court

By Herrick K. Lidstone, Jr.©, Burns, Figa & Will, P.C.

Six times in the last several years Colorado federal and state courts have considered whether joint venture interests offered to participants for oil and gas development are securities subject to regulation under federal and state securities laws. These cases include:

  • Two Denver district court decisions in 2011 and 2013 in Joseph v. HEI Resources, Inc. (discussed in the October 2013 CBA Business Law Section newsletter), which first narrowed the issues for trial and then dismissed the Securities Commissioner’s claims against the defendants since the trial court found that a “security” as defined in the Colorado Securities Act was not involved.  These decisions were followed by a Court of Appeals decision (Rome v. HEI Resources, Inc., 2014 COA 160, cert. denied 2015 WL 5102845 (2015), discussed in the December 2014 newsletter) which advised the trial court it had applied an incorrect analysis;
  • Joseph v. Mieka Corp. (discussed in the May 2012 newsletter), which upheld the Colorado Securities Commissioner’s cease and desist order against Mieka Corp. and others for unlawful sales of securities and lack of broker-dealer registration; and
  • The federal district court dismissed an SEC enforcement action on a Rule 12(b)(6) motion in SEC v. Shields (discussed in the September 2012 newsletter).  The dismissal was reversed and the case remanded by the Tenth Circuit in February 2014 (744 F.3d 633 (10th Cir. 2014) and discussed in the April 2014 newsletter).  On remand the court entered an injunction and other sanctions against Mr. Shields.  (In another Colorado state case, Jeffory Shields was convicted of two counts of securities fraud and (in August 2014) was sentenced to eight years in prison and ordered to pay $5.6 million in restitution.)

After remand from the Colorado Court of Appeals, the Denver District Court issued the seventh decision on the subject—a 33-page decision issued April 8, 2016 (Rome v. HEI Resources, Inc., Case No. 2009CV7181) concluding that the joint venture interests in question were securities under Colorado law and that the defendants offered and sold such securities:

Where in the previous HEI Resources opinion the District Court applied a “strong presumption” in finding that the joint venture interests were not securities (based on the Fifth Circuit case of Williamson v. Tucker, 645 F.2d 404 (5th Cir. 1981)), in its 2016 decision, the District Court acknowledged the Court of Appeals’ rejection of that presumption as being inconsistent with the “economic realities” test described as “the controlling test in Colorado for identifying securities.”

With respect to the second Williamson factor, the trial court had earlier determined that the court should consider the general business experience of the partners.  The Court of Appeals held the second Williamson factor required a consideration of the venturers’ industry-specific experience and general business experience was not sufficient.

This April 2016 decision is not the last we will hear of HEI Resources.  This decision only reflected the District Court’s new conclusion that the joint venture interests were securities under Colorado law and that the defendants offered and sold such securities.  The District Court ordered trial on the Colorado Securities Commissioner’s remaining claims from the 2009 litigation: HEI Resources’ alleged violation of the registration, licensing, and anti-fraud provisions of the Colorado Securities Act and the damages, fines, and other penalties appropriate for such violations.

The Joint Ventures

As in Mieka and Shields, the HEI Resources joint venture agreements purported to give the owners the right to participate in the operation of the joint ventures through voting, the right to receive information, and the right to remove the venture manager (the promoter in each of the cases).  In each case, the promoters solicited participants in the ventures through phone banks which called up to thousands of prospective participants throughout the United States.  However, only HEI or its manager, Heartland Energy Development Corporation, (“HEDC”) had the authority to bind a joint venture.

In each of the Colorado cases and in many of those brought elsewhere, the allegations suggested that the venture manager entered into turnkey drilling contracts that would govern the ventures when formed and would continue to govern the ventures even if the venture manager were dismissed.  Because of the cost of the turnkey contracts to the venture manager and the much higher cost to the venture paid by the investors, the venture manager received significant undisclosed compensation.  None of the disclosure documents gave the typical securities “full disclosure” of related party transactions and compensation.

HEI and HEDC employed sales representatives for the joint venture interests, which they sold by cold-calling individuals throughout the United States.  The eight ventures involved in the HEI Resources litigation each had from 46 to 90 investors.  Each investor signed a subscription agreement which put them on notice that they would be expected to exercise their management rights under the various joint venture agreements.  Each investor was also obligated to represent that he or she possessed “extensive experience and knowledge in business affairs such that he or she is capable of intelligently exercising his or her management powers” and that they would not be relying on any “unique entrepreneurial or management ability of the managing venturer.”  There was no requirement that the investors had oil and gas industry specific experience.

In fact, the venturers who testified ranged from 48 to 78 years of age at the time they made their investment.  Few had any experience investing in oil and gas drilling ventures.  The court reviewed in detail the qualification and testimony of 17 venturers, concluding in Paragraph 39:

As a group, the joint venture partners possessed significant knowledge and experience in general business affairs, but lacked knowledge and experience in the oil and gas exploration and production industry, with the limited exceptions of Mr. Matheny and Mr. Lefevre.

Joint Venture Interests As Securities

The District Court described its mandate from the Court of Appeals as to “revisit its trial judgment and summary judgment to determine whether the [joint venture] interests are securities under the second and third Williamson factors and any other economic realities, taking into consideration the Court of Appeals’ rejection of the presumption that general partnership or joint venture interests are not securities.”

In reaching its 2016 conclusion that the joint venture interests involved in HEI Resources were, in fact, securities, the District Court cited Securities and Exchange Commission v. W.J. Howey Co., 328 U.S. 293 (1946), and in Colorado, Lowery v. Ford Hill In. Co., 556 P.2d 1201, 1205 (Colo. 1976) and Joseph v. Mieka Corp., 282 P.3d 509 (Co. App. 2012).  The District Court cited the three prongs of the Howey test, used to determine whether a joint venture interest is an investment contract, as follows:

  1. a contract, transaction or scheme whereby a person invests his money;
  2. in a common enterprise; and
  3. is led to expect profits solely from the efforts of the promoter or a third party.

As noted by the Court of Appeals and repeated by the District Court, the word “solely” in the third Howey factor has not been read literally; rather, the “critical inquiry is instead whether the efforts made by those other than the investor are the undeniably significant ones, those essential managerial efforts which affect the failure or success of the enterprise,” citing Long v. Schulz Cattle Co., Inc., 881 F.2d 129, 133 (5th Cir. 1989) (internal quotation marks omitted); Toothman v. Freeborn & Peters, 80 P.3d 804, 813 (Colo. App. 2002); and Joseph v. Viatica Mgmt., LLC, 55 P.3d 264, 266 (Colo. App. 2002). 

This test is intended to “embod[y] a flexible rather than a static principle, one that is capable of adaptation to meet the countless and variable schemes devised by those who seek the use of the money of others on the promise of profits.” Howey, 328 U.S. at 299; see also Lowery, 556 P.2d at 1205.  The District Court identified “the dispositive inquiry” as being “whether the investor was ‘led to expect profits derived from the entrepreneurial or managerial efforts of others’” (citing Toothman, 80 P.3d at 811).

Williamson v. Tucker

The District Court moved on to a consideration of the second and third Williamson factors.  The three factors were established by the Fifth Circuit for determining whether partnership or joint venture interests may fall within the purview of Howey’s third prong (the “Williamson factors”). When one of the three Williamson factors is present, a security could be found.  The Williamson factors are:

  1. The agreement among the parties leaves so little power in the hands of the partner or venturer that the arrangement in fact distributes power as would a limited partnership;
  2. The partner or venturer is so inexperienced and unknowledgeable in business affairs that he is incapable of intelligently exercising his partnership or venture powers; or
  3. The partner or venturer is so dependent on some unique entrepreneurial or managerial ability of the promoter or manager that he cannot replace the manager of the enterprise or otherwise exercise meaningful partnership or venture powers.

Because of the Court of Appeals direction to consider the “economic realities” of the investment and its rejection of the Williamson presumption, the District Court re-examined the second and third Williamson factors.  (The January 2011 order by a different judge on the Denver District Court held the venture agreements in question provided sufficient power to the venturers to avoid the first Williamson factor.  That conclusion was not reviewed by the Court of Appeals.)

In considering the second Williamson factor, the District Court noted that only two of the 17 testifying venturers had experience in oil and gas exploration, drilling, or production (and that experience was “tangential at best”), the District Court held the investors “did not have substantial collective experience in the business of oil and gas exploration, drilling, and production, and therefore were incapable of intelligently exercising their venture powers.”  The District Court determined, therefore, that under the second Williamson factor, the joint venture interests were securities.

In considering the third Williamson factor, the District Court rejected the defendants’ claim that, under the agreements, “any of the venturers would have stepped in to fill the role of managing partner.”  In rejecting that conclusion, the District Court looked “beyond the form of the agreements and instead examine[d] the substantive economic reality of the relationship between venturers and promoters.”  Although the venturers could have hired experts to assist them, the District Court found that “HEI’s and HEDC’s unique abilities as managers prevented the other venturers from exercising meaningful venture powers, and as such, the subject joint venture interests [were] investment contracts” and therefore securities.

Finally, in emphasizing its conclusion that the joint venture interests were securities under Colorado law, the District Court considered “all relevant factors that show the substantive economic realities underlying the transaction.”  In doing so, the District Court reviewed the seven factors referenced in Feigin v. Digital Interactive Assocs., 987 P.2d 876, 883 (Colo. App. 1999) and the nine factors referenced in Joseph v. Mieka Corp.  In reaching the conclusion that the economic realities suggested the venture interests should be considered securities, the District Court noted:

  1. A significant number of investors were in their 60s, 70s, and 80s.
  2. The investors were solicited through volume-based, cold-calling techniques.
  3. Prior oil and gas experience was not important when accepting subscriptions.
  4. The investors were widely dispersed geographically.
  5. The investors had no control over the admission or rejection of other investors.
  6. Management powers given to the investors resembled rights granted to shareholders, not general partners or joint venture participants.
  7. In the offering process, the promoters touted their own expertise in the oil and gas industry, such that the ventures were more like passive investments.

Conclusion

After a number of cases, and different, even contradictory decisions by state and federal courts in Colorado, the conclusion from Shields, Mieka and now HEI Resources is that, unless extremely carefully structured, joint venture interests in oil and gas drilling programs will be securities for the purposes of federal and state securities laws.  It is clear in Colorado that the Williamson presumption does not apply, and the economic realities of any quasi-investment opportunity must be considered.  The economic realities test can be summarized as follows: “if it looks like a security and walks like a security and talks like a security, it will be treated as a security.”

None of this is new, and cautious lawyers have advised their clients to treat these broadly-marketed joint venture interests as securities since the early days of the oil and gas joint venture boom of the early 2000’s.  Many of the oil and gas joint venture investments offered to date have looked and walked and talked like a security – thus satisfying Colorado’s economic realities test.

The alternative available to joint venture promoters, of course, is to draft documents to comply with securities disclosure and securities exemption requirements under federal and state law, and to offer and sell the securities through licensed sales representatives and broker-dealers, or otherwise without violating the Colorado (and federal) licensing requirements.  Of course, among other things that would require full disclosure—an anathema to many of these promoters—are the low-priced turnkey drilling contracts that resulted in significant financial gain to the promoter. 

As Justice Louis Brandeis said in 1914: “Sunlight is said to be the best of disinfectants; electric light is the most efficient policeman. . . .”  [Other People’s Money and How the Bankers Use It at 92, 104 (1914, Augustus M. Kelley ed. 1971).]  This is still true in business disclosure 102 years later whether or not securities are involved in a transaction.

UK Company Requirements to Identify Controlling Persons

Starting April 6, 2016, most UK incorporated companies must maintain a Register identifying the persons who have significant control over the company.  Starting June 30, 2016, that information must be filed with the Companies House (the UK’s registrar of companies) for public availability.  Click here for a summary written by Steven Fullman, JUDGE SYKES FRIXOU, SOLICITORS.

All G8 and G20 countries, which include the United States, are being pressured to adopt similar requirements as a means to increase corporate transparency and fight money laundering. 

Business Law Section Activities
Antitrust Subsection

Woodman’s Food Market, Inc. v. Clorox Co. – Renewed Focus on the Robinson-Patman Act (Price Discrimination) – Tuesday, June 7, 2016 – Noon – 1:30 p.m.

One of the most complex (and confusing) statutes within the federal antitrust statutory scheme, the Robinson-Patman Act (the price discrimination statute) has largely been off the litigation radar over the past twenty years.  However, a fascinating civil action currently on appeal to the Seventh Circuit from the Western District Court of Wisconsin highlights renewed interest in this (almost) forgotten area of law.  At issue is the proper application of (and distinctions between) Sections 2(a), 2(d) and 2(e) of the Robinson-Patman Act, pertaining to the proper characterization of sales, discounts, promotional services, slotting, trade allowances, product packaging, and any applicable defenses.

The program will be held at the Colorado CLE Classroom, 1900 Grant Street, 9th Floor, Denver.  This program is offered for 1 general CLE credit.

The cost for CBA Antitrust members is $15.00 for a box lunch and $10.00 without lunch.  The cost for non-Antitrust Law members is $20.00 for a box lunch and $15.00 without lunch.  Please specify if you would like a vegetarian lunch. You can also attend by teleconference for $10.00. Students are welcome to attend the program, free of charge. Please RSVP to (303) 860-1115 x727 or email lunches@cobar.org.  Reservations must be received by noon on Monday, June 6, 2016. Any cancellations received after noon that day will be charged for the cost of the program.

Bankruptcy Subsection

Denver Bankruptcy Bar Brown Bag CLE – Wednesday, June 1, 2016 – Noon - 1 p.m.

The CBA Bankruptcy Subsection and the U.S. Bankruptcy Court for the District of Colorado are co-sponsoring a Denver brown bag lunch with our bankruptcy judges.  In addition to current matters before the court, the judges will address their consideration of a Conduit Mortgage system and Wage Assignment system in Chapter 13 cases.

Please attend to share your ideas, suggestions, questions, and concerns on this issue, as the judges are seeking input from the bar.  This brown bag event will be held at the United States Bankruptcy Court for the District of Colorado, Room 183, 721 19th Street, Denver CO 80202.  There is no cost for this program.  Please RSVP to (303) 860-1115 x727 or email: lunches@cobar.org.

Colorado Springs Bankruptcy Bar Brown Bag CLE – Friday, June 3, 2016 – Noon – 1:00 p.m.

The CBA Bankruptcy Subsection is sponsoring a Colorado Springs brown bag lunch with Judge Tallman and Judge McNamara for practicing Colorado Springs bankruptcy attorneys.  Some of the topics the judges will address include Chapter 13 issues including consideration of a Conduit Mortgage system and Wage Assignment system, current and potential local rules changes, general clerk's office/administrative updates, and other recent case law developments.  Please attend to share your ideas, suggestions, questions, issues and concerns on case management, court procedures, and general practice matters.

This brown bag event will be held at the Federal Courthouse, Courtroom 101, 212 North Wahsatch Avenue, Colorado Springs, 80903.  For more information on the event, please contact Matthew Faga.  There is no cost for this program.  Please RSVP to (303) 860-1115 x727 or email: lunches@cobar.org.

Bankruptcy Subsection Co-Chairs.  Matthew Faga (Law Clerk to the Honorable Michael E. Romero) and Mark Larson (Allen & Vellone, P.C.) are the co-chairs of the Bankruptcy Subsection (July 2015 – June 2017).  If you have ideas for future subsection events or CLEs, please contact Matt at matthew_faga@cob.uscourts.gov or Mark at mlarson@allen-vellone.com.

Financial Institutions Subsection

ALTA/NSPS Land Title Survey Standards – A Review of What’s NEW – Wednesday, May 18, 2016 – Noon – 1:00 p.m.

Did you know that NEW ALTA/NSPS Survey Standards were adopted this year? Take advantage of this opportunity to get up to speed on the new Standards and find out about the changes that affect your transactions. Gain insight on the current elements of the legal description and survey review, and surveyor certification. Plus, learn how definitions of Table A items have been expanded and revised.

The program will be held at the Colorado CLE Classroom, 1900 Grant Street, Suite 300, Denver.  This program is offered for 1 general CLE credit. Click here for more information or to register.

The Financial Institutions Subsection will take a summer break from its CLE series. There are no programs scheduled in June, July and August.

Please mark September 15-16 on your calendar for the Business Law Institute. The Subsection’s CLE series programs will not be held in September.

International Transactions Subsection

The International Transactions and M&A Subsections will be jointly sponsoring their program in May.  See the M&A Subsection program description for details.

M&A Subsection

The Americas: Acquiring or Selling a Business – Tuesday, May 10, 2016 – Noon – 1 p.m.

Co-sponsored by the International Transactions and M&A Subsections of the CBA Business Law Section

Learn the investment climate and trends in mergers and acquisitions in The Americas. Gain insights on how your clients can take advantage of the opportunities and overcome the challenges in developing business, and how to fund that development in this emerging market area. Hear an overview of the area's primary emerging market countries, including what is growing and what is driving this growth. M&A trends in Latin America will be compared to other regional emerging market trends and that industry analyzed. Legal background, legal structures, and legal issues and negotiations will be part of the presentation's case study along with a discussion of "why buy or sell" a company in The Americas.

The program will be held at the Colorado CLE Classroom, 1900 Grant Street, Suite 300, Denver.  This program is offered for 1 general CLE credit. Click here for more information or to register. 

The M&A Subsection will take a summer break from its CLE series. There are no programs scheduled in June, July and August.

Please mark September 15-16 on your calendar for the Business Law Institute. The Subsection’s CLE series programs will not be held in September.

Privately Held Business Subsection

Lunch & Learn: Flexible Foundations – Friday, April 29, 2016 – Noon – 1:15 p.m.

Peter Nagel will discuss foundations under IRC 501(c)(4) – flexible foundations – that are not subject to the restrictive enforcement and reporting regime imposed on private charitable foundations operating under 501(c)(3). Peter will explain how a flexible foundation is permitted to engage in the support, and active advocacy of, a wide range of civic, community, social welfare and political activities and, as well, charitable activities that 501(c)(3) organizations may pursue. The discussion will include how flexible foundations may hold interests in a closely held business or investment company, pay private annuities to the owners, and engage in other activities involving the owners and their families that would be prohibited transactions for private foundations.

The program will be held at the Colorado CLE Executive Conference Room, 1900 Grant Street, 9th Floor, Denver.  This program is offered for 1 general CLE credit. Click here for more information or to register. 

Securities Subsection

The Securities Subsection will take a break from its CLE series. There are no programs scheduled in May, June, July or August.

Upcoming Colorado CLE Programs

A Primer on Advising Nonprofit Organizations – Wednesday, May 4, 2016 – 8:55 a.m. - 12:35 p.m.

Co-sponsored by the Business and Taxation Law Sections of the Colorado Bar Association, the Colorado Nonprofit Association, and the Colorado Society of Association Executives

The 2016 Primer is designed to introduce practitioners to more general aspects of the laws governing the formation and operation of nonprofit organizations, obtaining and retaining tax-exempt status, taxation of unrelated business income, the distinctions between nonprofit entities, and operational issues for tax-exempt organizations.

The program will be held at the Colorado CLE Classroom, 1900 Grant Street, Suite 300, Denver.  This program is offered for 4 general CLE credits. Click here for more information or to register.

Using Alternative Dispute Resolution to Resolve Employment Discrimination Claims--Practical Tips for Lawyers and ADR Professionals – Friday, May 6, 2016 – Noon – 1:45 p.m.

This program will explore the use of alternative dispute resolution in employment discrimination cases.  Our expert panel will offer hands-on advice from the diverse perspectives of plaintiff's and defense counsel, an arbitrator and a mediator.  ADR professionals and attorneys handling employment discrimination cases in state and federal courts are encouraged to attend.

The program will be held at the Colorado CLE Executive Conference Room, 1900 Grant Street, 9th Floor, Denver.  This program is offered for 2 general CLE credits.  Please RSVP to (303) 860-1115 x727 or email: lunches@cobar.org.

48th Annual Rocky Mountain Securities Conference – Friday, May 6, 2016 – 7:50 a.m. - 5:10 p.m. 

Co-sponsored by the U.S. Securities and Exchange Commission and the CBA Business Law Section

The Rocky Mountain Region's PREMIER securities conference presented by many of the country’s most knowledgeable securities practitioners!

Topics include:

  • Enforcement Update - Priorities, Legal Issues, and Recent Significant Cases
  • Defense Perspective
  • Corporation Finance - Analysis of Recent Rulemakings, Policies and Issues
  • Flash Course - Municipal Securities - Current Regulatory and Enforcement Initiatives
  • General Counsel Roundtable and Corporate Governance Update
  • Ethics in the Securities Industry - A Conversation
  • Regulated Entities - Developments and Hot Topics
  • Flash Course - Update on Dodd Frank Matters
  • Cybersecurity - Multiple Perspectives on a Critical Current Issue
  • Ethics - Defense and SEC Perspectives

The program will be held at the Denver Marriott City Center, 1701 California Street, Denver.  This program is offered for 9 general CLE credits, including 2 ethics credits. Click here for more information or to register.

25th Annual Institute on Advising Nonprofit Organizations in Colorado – Thursday, May 5, 2016 – 8:55 a.m. - 4:25 p.m.

Co-sponsored by the Business and Taxation Law Sections of the Colorado Bar Association, the Colorado Nonprofit Association, and the Colorado Society of Association Executives

The 25th Annual Institute will present a comprehensive analysis of legal issues of concern to nonprofit organizations. The program will benefit attorneys, key representatives of nonprofit organizations, including board members, executive directors, chief financial officers, accountants, and representatives of governmental agencies.

Institute Topics Include:

  • 2016 Tax Law Update
  • Employment Law Update for Tax-Exempt
  • Lobbying and Political Activities of Tax-Exempt Organizations: How to Navigate the Law
  • Nonprofits and Social Enterprise - Finding the Right Fit for Your Organization
  • How to Review a Form 990
  • Employee Benefit Plans for Tax-Exempt Organizations ((403)(b), 457, 401(k))
  • Nonprofits & NGO Terrorist Financing Risks

The program will be held at the Colorado CLE Classroom, 1900 Grant Street, Suite 300, Denver.  This program is offered for 6 general CLE credits. Click here for a complete list of faculty, more information, or to register.

Private Placements, the Internet, and Securities Law For the General Practitioner – Thursday, June 23, 2016 – 8:30 a.m. - 4:10 p.m.

Program Topics Include:

  • Overview and What is a Security?
  • Conditions and Mechanics of a Private Placement
  • Broker-Dealers and Finders
  • Use of the Internet, Rule 506(c) and Crowdfunding
  • State and Federal Enforcement
  • Obligations of Counsel
  • Securities Regulation and the Marijuana Business

Each attendee receives a copy of the 2016 edition of the Securities Law Deskbook, by Herrick K. Lidstone, Jr.

The program will be held at the Colorado CLE Classroom, 1900 Grant Street, Suite 300, Denver.  This program is offered for 6 general CLE credits. Click here for a complete list of faculty, more information, or to register.

Save the Dates for the 2016 Business Law Institute
September 15-16, 2016
Denver Marriott City Center

2016 BLI Institute Topics and Highlights:

Plenaries:

  • Case Law and Legislative Recent Developments
  • Update from the Secretary of State’s Office
  • Ethics: Attorney for the Organization, Ethical and Practical Issues

Breakout Session Topics:

  • Top Antitrust Cases and Trends
  • The Life and Death of LLCs
  • The Ins and Outs of Financial Covenants in Loan Agreements
  • Employment Law Update
  • Purchasing Assets Out of Bankruptcy with an Emphasis on Oil and Gas Properties
  • Employment Law Myths and Realities
  • Corporate Concepts and Other Potential Missteps in LLC Agreements
  • Understanding Employee Incentive and Perks
  • Representing Distressed Companies
  • NEW Banking Regulations Changing the Escrow Agreement World for M&A Transactions
  • The Practice of Law and the Corporate Environment
  • Intersection of Business Lawyers and the Cannabis Industry: Ethical Dilemmas

Registration Information to come Soon!

Business Law CLE Homestudies

How to Understand and Analyze Financial Statements: What Lawyers Need to Know

Advising Entrepreneurs

Bankruptcy Case Law Update

Drones: A UAS Primer for Lawyers

48th Annual Rocky Mountain Securities Conference

How to Draft a Bad Contract

Check out the complete catalog of CLE Homestudies – search by practice area or credits!

Colorado CLE Books

Review our complete catalog of business law books.

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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