Estates and Trusts
Using Charitable Remainder Trusts to Reduce Income Tax Inefficiency in Retirement Accounts and Give More
The Federal estate and gift tax exemption is at a historically high level. In 2026, only individuals who make taxable gifts during their lifetime, combined with assets that pass through their estate, in excess of $15 million, will be liable for any tax. As such, much of the focus of estate planning has shifted from reducing estate tax liability towards creditor protection and succession planning. However, many individuals with significantly less than $15 million in assets may still leave their beneficiaries with significant tax liability if their assets are held in qualified accounts, such as individual retirement accounts (IRAs) and 401(k) plans. Trillions of dollars are currently accumulated within these tax-advantaged qualified retirement accounts. For many families, their IRA or 401(k) represents their most significant appreciated assets. Retirement Accounts do not receive a “Step-Up” in Basis Most appreciated assets receive a "step-up” in capital tax basis at the owner’s death. The “step-up” means that the decedent’s heirs inherit these assets with a capital gains tax basis reset to the fair market value as of the date of the decedent’s death. For example, if an individual acquires a stock at $100 and later sells it for $1,000, the individual is liable for capital gains tax on the appreciation in the stock. However, if the individual dies owning the stock and his heirs sell it immediately, there will be zero capital gains tax liability. This step-up can effectively wipe out thousands of dollars in capital gains tax liability. Unfortunately, IRAs and 401(k)s are an exception to this rule. They do not receive a “step-up” basis. Instead, every single dollar of appreciation in these assets, once distributed from an inherited IRA to an individual beneficiary, is taxed as ordinary income at the beneficiary’s income tax bracket. Before the enactment of the SECURE Act, beneficiaries of inherited IRAs were permitted to "stretch” these taxable distributions over their lifetime by taking required minimum distributions (RMDs) based on their life expectancy. A beneficiary younger than the original account owner would have much smaller RMDs, allowing inherited IRA assets to appreciate over a long period of time, income tax-deferred. This strategy reduced or eliminated the “income tax bracket creep” that may occur when significant distributions are made from the inherited IRA that would push the beneficiary into a higher income tax bracket and increase the amount of the income taxes that were ultimately paid. The SECURE Act largely eliminated this strategy. Under current law, most non-spousal beneficiaries must liquidate their inherited IRA within ten years of the death of the original account holder. This is commonly referred to as the “ten-year rule.” The compressed time frame reduces the time that the assets within the inherited IRA can continue to grow without the tax drag. It makes it much more likely that the distributions will push the beneficiary into a higher tax bracket. To make matters worse, most beneficiaries of qualified accounts will be in their peak earning years. Distributions from a modest one-million-dollar inherited IRA will be reduced by hundreds of thousands of dollars after the payment of federal and state income taxes. Using a Charitable Remainder Trust to Restore Tax Efficiency Fortunately, there is a solution to replicate the “stretch” and reduce this income tax inefficiency. The account holder can name a charitable remainder trust (CRT) as the designated beneficiary of the IRA. The CRT can be established during the account holder’s lifetime or may be designated under the account holder’s will or revocable trust (a “testamentary CRT”). A CRT is a split-interest, tax-exempt vehicle. One or more income beneficiaries receive an annual payment for a set term of years (a “CRAT”), or an amount based on a percentage of the trust at the end of the year (a “CRUT”). At the end of the term, which could be as long as the income beneficiary's lifetime, the remaining trust assets are distributed to one or more qualified charities. In this way, the original account owner can support their philanthropic goals and ensure their families are provided for. When a CRT is designated as the beneficiary of an IRA, the entire IRA balance is transferred directly to the trust upon the account holder’s death. Because a CRT is a tax-exempt entity, no income tax is recognized or paid upon the liquidation of the IRA. The full, undiminished account remains intact within the trust. The income beneficiary is guaranteed to receive a predictable flow of income. Because the distributions are made slowly over time, it reduces the likelihood that the distributions will push the income beneficiary into a higher tax bracket. As such, the beneficiary is likely to pay less overall income tax liability than if they had been named the outright beneficiary of the IRA. In addition, because the CRT is a tax-exempt trust, the assets in the CRT will continue to appreciate tax-deferred. If the CRT is structured to last for the duration of the income beneficiary’s life, the time horizon from which the distributions must be made from the account has effectively been increased from ten years to as much as several decades or longer. This creates significant potential that the total distributions to the income beneficiary will exceed what they would have received had they been named the outright beneficiary of the account. Finally, the estate of the original account holder benefits from an estate tax deduction equal to the actuarial value of the interest that passes to charity. In states such as New York, Washington, or Oregon, where the state estate tax exemption amount is much less than the federal estate tax exemption amount, this may be a valuable deduction. Key Considerations and Conclusion It is important to note that pursuant to Section 664 of the Internal Revenue Code, a CRT must distribute at least 5% (but no more than 50%) of its value annually to the income beneficiary. In addition, at least 10% of the actuarial value of the account must ultimately pass to the charitable remainder beneficiary. This can mean that naming very young income beneficiaries, such as grandchildren, may not satisfy the actuarial test. Although estate tax concerns have diminished for many individuals, the income tax exposure their heirs will face, with even modestly valued inherited IRAs, remains a significant challenge for wealth transfer. The SECURE Act forces beneficiaries to recognize substantial taxable income in a compressed time frame. For the right client, a charitable remainder trust offers a compelling solution, providing tax-efficient income deferral and reducing overall tax drag while supporting philanthropic goals. A CRT transforms a tax-inefficient asset into a powerful tool for preserving wealth and legacy. In today’s environment, proactive income tax planning is not optional; it is essential.
July 2, 2026
Property Management Playbook
Offit Kurman's Landlord Representation group is launching a new video series: the Property Management Playbook. Hosted by Billy Cannon alongside colleagues Brian Dorwin, Jennifer Jean-Gilles, and Gwen Roye-Harrison, this series digs into the real-world scenarios property management clients face every day. Topics include handling argumentative tenants, maintenance best practices, and fair housing dos and don'ts. Watch the full series to get practical guidance straight from Offit Kurman's landlord representation attorneys.
July 1, 2026
Estates and Trusts
Top Five Probate Litigation Trends: What Estate Planners and Trust Practitioners Need to Know
The United States is in the midst of a historic generational transition. The so-called “Great Wealth Transfer” is estimated to exceed $84 trillion in assets passing from Baby Boomers and the Silent Generation to their heirs over the coming decades. This wealth transference is reshaping the landscape of estate administration and trust practice. Against this backdrop, an aging population, the rising complexity of blended family structures, and the rapid proliferation of digital assets are combining to produce unprecedented levels of estate probate and trust litigation. Courts across the country are contending with both more numerous and meaningfully more complex disputes than those of prior generations. Much like the Midwest’s flat dustbowl lends itself to more frequent tornadic activity than elsewhere in the country, here in the “DMV” (D.C./Maryland/Virginia), home to a dense concentration of federal employees, government contractors, military families, and high-net-worth households, conditions are particularly ripe for contested estate and trust dispute activity. It shouldn’t be a surprise, therefore, that Virginia's and Maryland’s Circuit Courts, and D.C.'s Probate Division are all experiencing a meaningful uptick in contested proceedings. The five trends identified below reflect the most consequential litigation developments that estate planners and trust practitioners in this region should be tracking in 2026. UNDUE INFLUENCE CLAIMS ARE SURGING Caregiver-beneficiary relationships, late-in-life marriages, and deathbed changes to estate plans are generating a wave of undue influence claims across the DMV region consistent with the nationwide trend. And with statutory changes favoring the challengers, such claims are only likely to continue to increase. Virginia's multi-part undue influence test and shifting evidentiary burdens, nominally at least, favor challengers of wills, see § 64.2-454.1. and, with a newly-enacted equivalent governing the trusts context, effective as of July 1, 2026, of trusts as well, see § 64.2-724.1. In situations where undue influence may be presumed from basic circumstances, often easily established by the challenging plaintiff, cases of late have become more about an accused’s needing to disprove wrongdoing than about the skeptical plaintiff’s duty to prove the contrary. Alleged influencers who occupied a position of trust or physical dependency should presume a legal challenge when changes to testamentary planning result in a plan favoring the one in that position for the decedent. In Maryland, the Court of Appeals (FKA the Court of Special Appeals) has affirmed that undue influence may be proven through cumulative inference, permitting plaintiffs to build their cases through patterns of conduct rather than direct evidence. In D.C., the Probate Division has demonstrated a notable willingness to allow contested matters to reach trial based on affidavit evidence alone, lowering the practical threshold for advancing such claims. For the devoted family member who has done only right by their deceased parent(s) while asking or expecting nothing in return, a parent’s reward of a greater than equal distributive share may result in little more than authorized judicial scrutiny and second-guessing of actions taken when t-crossing and i-dotting were not the primary (or even secondary) priority. These shifted burdens may operate unfairly to the detriment of the selfless doting loved ones their dying parents saw fit to reward, but we have decided societally to err in favor of protecting against overriding our elders’ testamentary intentions over the perceived substantially more limited likelihood that the decedent independently intended and resolved to recognize and reward their loved one’s selfless kindness. We have effectively shifted the presumption in this context to one of expected wrongdoing by anyone rewarded by a dying loved one. Practice Tip: Document the testator's independent judgment at every planning stage, especially for any amendment in contemplation of more imminent death. Consider independent counsel for vulnerable clients and retain contemporaneous notes of all meetings. LACK OF TESTAMENTARY CAPACITY CHALLENGES Dementia diagnoses are rising in lockstep with an aging client base, and contests premised on lack of testamentary capacity are becoming more common and considerably more sophisticated. The classical four-pronged capacity standard, i.e., requiring that a testator understand the nature of the testamentary act, the character and extent of their property, the natural objects of their bounty, and the nature of the will itself, remains the legal benchmark across the DMV jurisdictions, but the evidentiary battles to establish or defeat capacity have grown considerably more technical. Plaintiffs now routinely retain geriatric psychiatrists and forensic neurologists as expert witnesses, and the battle of the experts has become a defining feature of capacity litigation. Virginia Code §§ 64.2-403 and -404 govern will execution formalities (and/or the excusability of noncompliance therewith), and courts scrutinize compliance with these requirements closely when capacity is disputed, particularly regarding the role of attesting witnesses and notaries. Practice Tip: Consider recommending a contemporaneous medical assessment for clients with any documented cognitive impairment; consider a "golden period" video execution for “high-risk” matters, but recognize the “red flag” signal such a step may suggest and/or the potentially disproportionate impact of even the most minor lapses or misstatements. Likewise, a capacity assessment memorandum prepared by the drafting attorney at the time of execution might be invaluable in future litigation but is not without its own caveats. DIGITAL ASSETS AND CRYPTOCURRENCY DISPUTES The valuation, access, and proper distribution of digital assets, including, as relevant examples, cryptocurrency wallets, non-fungible tokens (NFTs), online brokerage accounts, and internet-based business interests, are creating novel litigation flashpoints that earlier probate frameworks were not designed to address. Virginia has enacted the Revised Uniform Fiduciary Access to Digital Assets Act (“RUFADAA”) (Va. Code §§ 64.2-116 et seq.) to provide fiduciaries with clearer statutory access rights, but significant disputes persist around the possession of private cryptographic keys, the policies of third-party exchange platforms, and the correct estate-date valuation methodology for inherently volatile assets. Maryland and D.C. have enacted comparable RUFADAA statutes, yet litigation in all three jurisdictions reveals that statutory authorization and practical access remain separated by a significant gap, particularly where a decedent leaves no organized record of digital holdings or credentials. Practice Tip: Ensure all estate plans include a digital asset inventory and an explicit fiduciary authorization clause; counsel clients to use platform legacy contact and beneficiary designation tools where available. A securely stored credentials memorandum, separate from the will, can prevent years of unnecessary litigation. ELDER FINANCIAL EXPLOITATION AND CONSERVATORSHIP LITIGATION Adult protective services referrals, emergency guardianship petitions, and civil claims for financial exploitation of vulnerable adults are rising sharply across all three DMV jurisdictions. Virginia's Adult Protective Services statutes (Va. Code §§ 63.2-1600, et seq.) and the Commonwealth's criminal elder abuse statutes are being deployed with increasing frequency in tandem with civil probate remedies, including claims for constructive trust, disgorgement, and punitive damages. Contested guardianship and conservatorship matters in Virginia Circuit Courts seem to have grown substantially in both volume and procedural complexity, with courts appointing guardians ad litem (“GALs”) with greater frequency to safeguard the interests of alleged incapacitated persons. In Maryland, the intersection of the Health Care Decisions Act with surrogate decision-making disputes has generated a distinct body of contested proceedings, particularly where family members disagree about the scope of an agent's authority under a durable power of attorney. Practice Tip: Counsel aging clients to establish durable powers of attorney, advance medical directives, and revocable trusts proactively BEFORE capacity becomes an issue. Encourage regular monitoring of financial accounts for irregularities and consider the use of trusted contact designations with financial institutions. TRUST MODIFICATION, DECANTING, AND NO-CONTEST CLAUSE DISPUTES Irrevocable trusts formed decades ago are being challenged, modified, or decanted with growing frequency as family circumstances evolve and tax laws change. Virginia's Trust Decanting Act (Va. Code §§ 64.2-779.1, et seq.) provides a statutory mechanism for trustees to distribute assets from one irrevocable trust to a second trust with more favorable terms (a process that is itself a growing trend), but this power is increasingly being contested by remainder beneficiaries who argue that decanting impermissibly alters their vested interests. No-contest (or in terrorem) clauses, long regarded as effective deterrents to meritless litigation, are being strategically challenged as beneficiaries weigh the financial calculus of contesting large estates and assess the likelihood of clause enforcement. Maryland courts have historically enforced in terrorem clauses with relative strictness, while D.C. courts have applied them more flexibly, creating meaningful jurisdictional variation within the same metropolitan region. Practice Tip: When drafting no-contest clauses, consider including explicit carve-outs for good-faith challenges based on capacity or undue influence and/or gross mismanagement or self-dealing. Blanket clauses discourage otherwise meritorious litigation. Review irrevocable trusts periodically for decanting candidacy, particularly those with outdated distribution standards or unfavorable trustee succession provisions. Conclusion The litigation trends documented here share a common thread: each is, at its core, a failure of planning, whether a failure to document, communicate, update, or anticipate. Proactive, well-documented estate planning remains the most reliable and cost-effective litigation prevention tool available to practitioners and their clients. Comprehensive planning that accounts for cognitive vulnerability, digital asset complexity, blended family dynamics, and evolving trust structures will materially reduce the risk of costly, protracted disputes. Practitioners serving clients in the DMV region are well-served by engaging colleagues who bring broad, multidisciplinary expertise to complex estate matters. If you do not believe you are equipped to navigate the generational, jurisdictional, and asset-class complexity that defines modern estate and trust practice, seek help. Remember, it is not failure to admit you don’t know it all, rather consider it more of a professional imperative.
June 30, 2026
International
International Trade: Service of Process and Default Judgments Can Reach You in Unexpected Ways
A recent Second Circuit decision offers a valuable lesson for foreign companies dealing with U.S. counterparties: a plaintiff may effect service of process through a collection agent, even if that agent was not expressly authorized to accept service of process on the company’s behalf. Ryniker v. Sumec Textile Co. Ltd., 177 F.4th 365 (2d Cir. 2026). The Second Circuit reinstated a default judgment against a Chinese creditor, Sumec Textile Company Limited, following a convoluted procedural path from bankruptcy court to district court, then bankruptcy court again and a rare direct appeal to the Second Circuit. As they say, the devil is in the details. A closer look at the background helps explain why the court reached that result. Décor Holdings, Inc. and its affiliates were sellers of decorative fabric that filed voluntary Chapter 11 petitions on February 12, 2019. They listed Sumec Textile Company Limited, a Nanjing, China-based textile manufacturer, as their second-largest unsecured creditor. Sumec Textile Company Limited held an export credit insurance policy with China Export & Credit Insurance Corporation, known as Sinosure, and submitted an insurance claim to Sinosure for the unpaid balance owed by the debtors. Before Sinosure paid on the insurance claim, Sumec Textile Company Limited executed a Collection Trust Deed authorizing Sinosure to collect, “on our behalf,” the “full amount” of the debt owed by the debtors, $3,029,719.52, and granted Sinosure “full power” to exercise collection rights and remedies in Sumec Textile Company Limited’s name or Sinosure’s own name. Sinosure then hired Brown & Joseph, LLC, a U.S. collection agency, to collect the debt. Sinosure’s instructions to Brown & Joseph granted it “full power” to exercise collection rights and remedies for “amicable debt collection.” The Collection Trust Deed, however, did not authorize Sinosure to accept service of a summons or complaint on Sumec's behalf or act in any way for Sumec. To assist in debt collection, Sinosure hired the Detroit-based collection agency Brown & Joseph LLC (“B&J”). The scope of B&J's authority and services was set forth and limited by a Trust Deed and Letter of Instruction dated March 4, 2019. There is no language in the Trust Deed and Letter of Instruction that authorizes B&J to accept service of process on behalf of Sumec. B&J filed a proof of claim in Décor Holdings, Inc.’s bankruptcy on behalf of Sumec. The dispute arose when a litigation administrator later commenced an adversary proceeding seeking to recover payments made to Sumec and to disallow Sumec’s claim. The summons and complaint were mailed to Sumec “in care of Brown & Joseph” at the address listed on the proof of claim. Brown & Joseph engaged with the plaintiff after service, stating it was reviewing the matter with “our client and the creditor,” referencing an ordinary course defense, and noting that Sumec believed the payments “were made in the ordinary course of business.” Despite these communications, Sumec never appeared, and a default judgment was entered. The central issue on appeal was whether Brown & Joseph qualified as an “agent authorized by appointment or by law to receive service” under Bankruptcy Rule 7004, even though the governing documents did not expressly authorize it to accept service of process. The Second Circuit answered yes, holding that Brown & Joseph had implied actual authority to accept service on Sumec’s behalf. The Court emphasized that actual authority is not limited to what is expressly stated. It includes authority “to perform acts necessary or incidental to achieving the principal’s objectives, as reasonably understood from the principal’s manifestations.” Here, Sumec had authorized Sinosure to collect the “full amount” of the debt, and Sinosure had in turn authorized Brown & Joseph to do the same. By filing a proof of claim in Sumec’s name and designating itself as the recipient for notices, Brown & Joseph positioned itself as the functional representative of the creditor in the bankruptcy case. Critically, the adversary proceeding did not exist in isolation. It sought not only to recover alleged preferences but also to disallow the very claim Brown & Joseph had been authorized to pursue. In that context, they rejected the argument that express authorization to accept service was required. Instead, it reasoned that authority to recover the “full amount” necessarily included authority to receive notice of litigation that could reduce that recovery. As the Court put it, actual authority may be implied from the principal’s objectives, and here those objectives made service on Brown & Joseph appropriate. The Court therefore reinstated the default judgment. For foreign creditors, the implications are significant. This decision underscores that delegating collection authority and allowing a default to be entered may carry material negative consequences that extend beyond simple debt recovery. Even where agency documents state that the agent does not have authority to accept service, a court may find otherwise based on the scope of the assignment and the surrounding circumstances. Interestingly, in this case, the creditor had posted a bond to stay enforcement during the appeal process and the reinstatement of the default judgment clears the path to satisfying the judgment quickly. The takeaway is straightforward but important: foreign companies should carefully define and, where appropriate, limit the authority granted to insurers, factors, and collection agents. Absent clear boundaries and active oversight, service of process on a U.S. agent may be sufficient to bind a foreign creditor even where the creditor has not expressly authorized the agent to accept service and the agent has affirmatively informed the plaintiff that it lacks such authority.
June 29, 2026
Estates and Trusts
Where There’s a Will — or a Trust — There’s a Way: A Practical Guide to Choosing the Right Estate Plan
Should you have a revocable trust or a simple will? As an Estates & Trusts attorney, this is one of the most common estate-planning questions I hear. For most Maryland residents, a simple will is perfectly adequate. A will directs how your assets will be distributed, names the person responsible for administering your estate, and allows you to designate guardians for minor children. Although a will does not avoid probate, Maryland’s probate process is generally efficient and straightforward, and it provides a clear forum for resolving disputes if they arise. But some of us have more complicated assets or circumstances. For example, you may be older and want someone to manage your finances in case you lose capacity. Or you might own a vacation home outside Maryland. In situations like these, a revocable trust can make it easier for someone you trust to take charge of your finances if the need arises, while streamlining the transfer of assets upon your death. Sometimes called a “living trust,” a revocable trust is established during your lifetime. Once the trust agreement has been signed, you should then follow your attorney’s instructions for transferring your assets into the trust. Real Estate. This typically involves recording a new deed — something your attorney or title company can handle. Bank Accounts. Checking and savings accounts can be retitled by taking a copy of the trust (or a shortened form, called a “Trust Certification”) to the bank. This is typically done by renaming the account from you individually, to you as the trustee of your revocable trust. Retirement Accounts & Life Insurance. These can be set up to transfer to the trust upon your death by completing a beneficiary-designation form naming the trustee as the beneficiary. Alternatively, it may be more advisable to name one or more family members as direct beneficiaries. Because either approach can have significant tax implications, be sure to consult your attorney before making changes. The benefit of all this legwork comes upon your death. The trust assets, called the “trust estate,” will transfer to your beneficiaries without unnecessary delay. If you do own property outside Maryland, it will transfer without the need for “ancillary probate,” essentially a second estate to be administered in the state where the other property is located. Key Advantages of a Revocable Trust Beyond avoiding ancillary probate, a revocable trust offers several additional advantages that may make it the better choice in the right circumstances. Incapacity Planning A will takes effect only upon death. By contrast, a revocable trust can provide for the management of your assets if you become incapacitated during your lifetime. If this happens, your chosen successor trustee can step in and manage trust assets without the need for court-appointed guardianship, which can be time-consuming, stressful, and costly. Privacy Unlike a will, which becomes part of the public record once it is filed with the Orphans’ Court, a revocable trust generally remains private. For individuals who value confidentiality, particularly those with strained family dynamics or complex financial holdings, this can be an important consideration. Continuity and Efficiency Because the trust holds title to the assets, there is no interruption in ownership at death. This continuity can simplify administration for your beneficiaries and reduce delays in distributing property, particularly when compared to even a streamlined probate process. Myths About Revocable Trusts Despite their advantages, revocable trusts are sometimes misunderstood. It is worth addressing a few common misconceptions: “A trust avoids all probate.” Not necessarily. Only assets that are properly titled in the name of the trust — or that pass by beneficiary designation or joint ownership — will avoid probate. Any assets left outside the trust may still require probate administration, which is why proper funding of the trust is essential. “A trust replaces a will.” Not entirely. Even if you have a revocable trust, you will still need a will, often called a “pour-over will.” This document serves as a failsafe and ensures that any assets inadvertently left out of the trust are directed into it upon your death. A pour-over will can also name guardians for any minor children and address other important matters not normally included in a trust. “A trust avoids taxes.” For most individuals, a revocable trust does not provide income- or estate-tax savings during your lifetime because you retain control over the assets. Tax planning typically requires additional strategies beyond a basic revocable trust. When a Will May Be the Better Choice While revocable trusts are powerful tools, they are not always necessary. Here is when a simple will may be all you need: Your assets are relatively straightforward You own property in only one state You have designated beneficiaries on retirement accounts, life insurance, and payable-on-death accounts You are comfortable with Maryland’s probate process A will is generally less expensive to set up and maintain than a trust, and it requires less administrative effort during your lifetime. For many families, it strikes the right balance between simplicity and effectiveness. The Importance of Proper Planning Whether you choose a will or revocable trust, it’s essential that you have an estate plan in place and keep it up to date. Changes in family circumstances, financial holdings, or the law may require updates over time. It is also essential that you coordinate your estate planning documents with your beneficiary designations and asset ownership. Missing or out-of-date beneficiary designations on retirement accounts or life insurance policies may derail an otherwise well-thought-out estate plan. Will vs. Trust: Which Is Right for You? There is no one-size-fits-all answer. The right approach depends on your assets, family dynamics, and personal preferences. For some Maryland residents, a will provides all the structure they need. For others, particularly those with multi-state property, concerns about incapacity, or a desire for privacy, a revocable trust offers significant advantages. Final Thoughts Estate planning is ultimately about making things easier for the people you care about most. Whether through a will or a revocable trust, the goal remains the same: to provide clarity, reduce stress, and ensure that your wishes are carried out efficiently. By understanding the differences between these planning tools, and by working with an experienced estates & trusts attorney, you can create a plan tailored to your needs and mindful of your legacy.
June 23, 2026
Intellectual Property
AI Back in Court: MiniMax Studio’s “In your Pocket” Faces Hollywood Studios Copyright Infringement Claims
When an AI company markets its product as a "Hollywood studio in your pocket," it probably shouldn't be surprised when Hollywood lawyers come knocking. Such is the lot of MiniMax, a Shanghai-based tech company whose video and image generation platform, Hailuo AI, became the target of a joint copyright lawsuit filed by Disney, Universal, and Warner Bros. Discovery in a California federal court last fall. The studios' complaint alleges that Hailuo AI was built on a foundation of stolen intellectual property: that MiniMax scraped and trained its model on the studios' copyrighted films without permission, and that the resulting platform can generate eerily accurate, downloadable images and videos of characters like Darth Vader, Wonder Woman, and the Minions, all with MiniMax's own branding slapped on them, at the push of a button. The lawsuit raises two distinct types of copyright infringement claims. The first involves the AI's training: the argument that feeding a model copyrighted films without a license is itself an unauthorized reproduction of those works, regardless of what the model later produces. The second involves the AI's outputs: the finished videos and images that directly replicate protected characters. The studios also pursued a theory of contributory infringement, arguing that MiniMax didn't just passively enable infringement, but actively encouraged it. The company's own promotional materials featured generated clips of the studios' characters, and it sponsored tutorial videos walking users through how to produce content like "Spider-Man and Supergirl kissing in the park." On May 22, 2026, a federal judge denied MiniMax's motion to dismiss, rejecting both the company's claim that a U.S. court lacked authority over a Chinese defendant and its argument that the studios hadn't stated a viable legal claim. On the contributory infringement theory in particular, the court found the studios' allegations sufficient to proceed. The studios have framed the stakes in stark terms, warning that as generative AI advances, it's only a matter of time before these tools can produce full-length unauthorized films. While that outcome remains speculative, the core legal question the case will force courts to answer is concrete: can an AI company build a commercial product on copyrighted works it never licensed, and then profit from an output that reproduces those works on demand? If the studios prevail, the answer will reshape how AI developers approach content licensing and what rights holders can expect in return. For now, MiniMax's motion to dismiss has been denied, the parties are headed toward discovery, and the "Hollywood studio in your pocket" is facing the real Hollywood in court.
June 22, 2026
Estates and Trusts
Why Membership in the Sandwich Generation Hits Professional Athletes Especially Hard
My trust and estate practice services multi-generational families and those in the “public” space, which includes actors, musicians, and professional athletes. In recent years, I have delved deeper into “sandwich generation” issues (a shorthand term for those of us in midlife balancing the competing demands of caring for aging loved ones while still supporting and launching our young-adult children). Three years ago, “The Sandwich Generation Survival Guide” podcast was launched to provide resources to those of us in the “middle.” It has been enlightening to see how deeply these sandwich generation issues are being felt by professional athlete clients. This demanding and dynamic phase of life for professional athletes is seemingly intensified, accelerated, and often financially magnified in ways that traditional planning frameworks fail to address for other clients. The core challenge for the athlete in the “sandwich” begins with timing. A professional athlete’s earning window is compressed, with peak income often arriving in their 20s or early 30s and career longevity uncertain at best. At precisely the moment when many athletes are earning the most, it appears they are prematurely finding themselves in the “sandwich generation,” certainly earlier than non-professional athlete clients, which typically begins in their late 30s and early 40s, as they are also expected (implicitly or explicitly) to provide for parents, siblings, extended family members, and, like many clients, their own children. This expectation creates a fundamental mismatch between short-term income spikes and long-term, multigenerational obligations. Unlike most clients who accumulate wealth over decades, athletes are frequently required to make high-stakes financial decisions quickly, without the benefit of time, experience, or perspective. Compounding this issue is the expansive definition of family that often surrounds professional athletes. Financial responsibility often extends far beyond the nuclear household to include parents who sacrificed to support the athlete’s career, siblings, and extended relatives who rely on the athlete’s success, and even broader community expectations to give back in meaningful and visible ways. When layered with the needs of a spouse, partner, or young children, the athlete becomes the financial center of a wide, and often informal network. This is the sandwich generation in its most amplified form. These pressures are not purely financial; they are deeply emotional. Many professional athletes grapple with how to set boundaries without damaging relationships, how to distinguish between one-time gifts and ongoing obligations, and how to manage expectations of others when their own income fluctuates, injuries occur, or careers end. Feelings of loyalty, gratitude, and identity are often intertwined with financial decision-making, making it even more difficult to approach these issues objectively. The result is a heightened risk of overextension, where generosity and obligation can easily outpace sustainability. Too often, these dynamics are managed informally, through direct payments, unstructured allowances, or verbal commitments that lack documentation or long-term planning. While well-intentioned, this approach creates significant legal and financial exposure, including tax inefficiencies, unequal distributions (leading to family conflict), and a lack of thoughtful asset protection. It also leaves athletes vulnerable in the event of incapacity, injury, or premature death, where there is no clear structure governing how support should continue or how assets should be preserved. Traditional estate planning models are not well-suited to a professional athlete’s reality. Estate plans are generally designed for clients with longer earning horizons, more predictable income streams, and narrower, more foreseeable definitions of financial responsibility and obligation. Professional athletes, by contrast, require planning that accounts for income volatility, public visibility, name and image value, complex family systems, and of course, the psychological weight of being the primary provider for multiple generations. A more effective estate planning approach reframes these obligations through structure and intentionality. Formal planning tools can transform informal support into sustainable systems, creating clarity, consistency, and accountability while alleviating some of the emotional burden. Thoughtful multigenerational planning allows athletes to support both parents and children without compromising their own long-term financial security, while sophisticated asset protection and tax strategies help preserve wealth in a high-risk, high-visibility environment. Just as importantly, introducing governance and financial education into the family dynamic can help manage expectations and foster a shared understanding of how resources are allocated. Professional athletes are not simply part of the sandwich generation; they often represent its most extreme expression. The convergence of high earnings, short careers, expansive obligations, and emotional complexity creates a unique set of challenges that cannot be addressed with conventional planning alone. When approached strategically, however, this period of financial intensity can become an opportunity to build a lasting, multigenerational legacy. The key lies in shifting from reactive, informal support to deliberate, well-structured planning that reflects both the realities of an athlete’s career and the broader family system they support.
June 22, 2026
Labor and Employment
Untrained Managers Create Legal Risk: Federal Training Requirements Every Employer Must Follow
Many employment lawsuits I have handled on behalf of employers had something in common: a manager made a deficient decision or failed to act appropriately because no one had trained them properly. Sometimes the decision was a termination made without documentation. Sometimes it was a failure to recognize a harassment complaint and how to respond. Sometimes it was a well-meaning accommodation conversation that crossed a legal line. The lesson is not complicated. Under federal law, your managers are your company’s legal agents. When they act, or fail to act, the law generally treats it as the company acting. Liability flows upward. Training is the mechanism by which you limit that exposure. Title VII of the Civil Rights Act of 1964, along with the Age Discrimination in Employment Act (ADEA) and the Americans with Disabilities Act (ADA), prohibits workplace harassment based on protected characteristics. The EEOC’s enforcement guidance makes clear that employers are expected to take reasonable steps to prevent and promptly correct harassment. But the most compelling reason to train managers is a practical defense, not a moral one. Under Faragher v. City of Boca Raton (1998) and Burlington Industries v. Ellerth (1998), the Supreme Court held that an employer may avoid vicarious liability for a supervisor’s harassment — if no tangible employment action resulted — by demonstrating two things: (1) that the employer exercised reasonable care to prevent and correct harassing behavior; and (2) that the employee unreasonably failed to use the employer’s preventive or corrective opportunities. You cannot establish the first prong without documented manager training. Courts consistently look for: A written anti-harassment policy that is distributed to all employees A complaint procedure that bypasses the immediate supervisor when that supervisor is the alleged harasser Regular, documented training for managers on recognizing, reporting, and responding to harassment complaints Training that addresses bystander intervention obligations and retaliation prohibitions Practical Tip Managers must understand that their obligation is not merely to avoid harassing behavior themselves, it is to act when they observe or learn of harassment by others. A manager who witnesses harassment and does nothing creates employer liability, regardless of whether there is a reporting policy. Quick Reference: Federal Manager Training Obligations The table below summarizes the primary federal laws that impose manager training requirements and the key compliance obligations in each area. The Bottom Line for Employers Federal employment law does not require perfection. What it requires is a good-faith, documented effort to comply. In practice, that means written policies, a functional reporting structure, and — above all — managers who are trained, periodically re-trained, and held accountable for what they know. When a lawsuit or agency charge arises, one of the first things plaintiff’s counsel and investigators request is documentation of manager training. The question they are asking is simple: did this company do what a reasonable employer would do to prevent this from happening? Training records, or the absence of them, answer that question before the first deposition is taken. If your organization does not have a structured manager training program addressing each of the areas discussed in this article, now is the time to build one. The investment is modest. The cost of the alternative is not.
June 19, 2026
Real Estate
Why Delaware Legal Opinions Matter – Part 3: A Delaware Opinion Is Not a Substitute for Local Counsel
A Delaware legal opinion serves a specific purpose: it provides opinions regarding a Delaware entity and matters governed by Delaware law. It is not intended to address every legal issue arising from a transaction, nor is it a substitute for local counsel opinions involving the laws of other states. Understanding this distinction can help avoid unnecessary opinion negotiations, reduce closing delays, and ensure that opinion requests are appropriately tailored to the role of Delaware counsel. When a lender requires a Delaware legal opinion, it is typically because a borrower, guarantor, or other transaction party is organized and exists under Delaware law. The lender seeks assurance that the Delaware entity has been properly formed, remains in good standing, possesses the necessary power and authority to enter into the transaction, and has properly authorized the execution and delivery of the loan documents. Depending upon the scope of the engagement, Delaware opinion counsel may also provide an enforceability opinion regarding the loan documents against the Delaware entity.1 These opinions are important because Delaware law governs the internal affairs of Delaware corporations, limited liability companies, limited partnerships, and statutory trusts. Delaware counsel is uniquely positioned to analyze these issues and provide opinions concerning Delaware entity law. One common misconception is that because a Delaware entity is involved in a transaction, Delaware counsel should be able to opine on all aspects of the deal. In reality, the scope of a Delaware opinion is generally limited to matters of Delaware law. For example, assume a Delaware limited liability company owns commercial real estate in Arizona and grants a mortgage to secure a loan. Delaware counsel may provide opinions regarding the existence, good standing, power and authority, due authorization, and, if requested, the enforceability of the loan documents against the Delaware entity. However, Delaware counsel generally would not opine regarding: The validity of the Arizona mortgage General enforceability of the loan documents Compliance with Arizona recording requirements Perfection or priority of liens under Arizona real property law Title matters affecting the property State-specific licensing or regulatory requirements Those issues are typically addressed by Arizona counsel, title companies, or other professionals familiar with Arizona law. Likewise, when collateral is located in multiple jurisdictions, local law issues may arise concerning recording statutes, fixture filings, landlord consents, or other state-specific requirements that fall outside the scope of a Delaware opinion. To those unfamiliar with opinion practice, the requirement for several legal opinions in a single transaction may appear duplicative. In reality, each opinion addresses a different body of law. Consider a loan transaction involving a Delaware borrower, real estate located in Texas, and loan documents governed by New York law. The lender may require a Delaware opinion concerning the borrower's existence, authority, authorization, and related Delaware law matters; a Texas opinion addressing real estate and mortgage issues; and a New York opinion regarding matters governed by New York law. Each attorney is providing opinions within the scope of his or her jurisdictional expertise. The lender is not seeking multiple attorneys to answer the same question. Rather, the lender is assembling a comprehensive package of legal assurances covering the various legal issues presented by the transaction. Many opinion disputes arise because the parties have different expectations regarding the scope of the Delaware opinion. Opinion requests are often copied from prior transactions without considering whether the requested opinions are appropriate for Delaware counsel. When lender's counsel, borrower's counsel, and Delaware counsel clearly understand the purpose of a Delaware opinion, the process becomes significantly more efficient. Opinion requests can be tailored appropriately, revisions can be minimized, and transactions can move toward closing with fewer delays. A Delaware legal opinion remains a critical component of many commercial lending transactions involving Delaware entities. However, it is only one piece of a broader legal due diligence framework. Delaware counsel addresses Delaware law issues relating to the entity. Local counsel addresses issues governed by the laws of other jurisdictions. Together, these opinions provide lenders with the assurances necessary to complete complex transactions while ensuring that each opinion giver remains within the scope of their expertise. 1This is not the general enforceability of the loan documents, which is an opinion local counsel provides, it is only the enforceability as to the Delaware entity.
June 18, 2026
Labor and Employment
Beyond Bostock: Legal Gaps Affecting LGBTQIA+ Workers
In its landmark decision in Bostock v. Clayton County, the Supreme Court held that discrimination based on sexual orientation is illegal under Title VII. This sweeping ruling changed the legal landscape for homosexual and transgender employees, ensuring that key anti-discrimination laws also protect them in the workplace. In it, the Court makes clear, “it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.” While Bostock marked a major victory for LGBTQIA+ workers, its reasoning leaves important gaps — particularly for bisexual, asexual, and nonbinary individuals, as well as in areas like healthcare coverage. Bisexuality The Supreme Court could not have been clearer in Bostock that Title VII “works to protect individuals of both sexes from discrimination and does so equally” (emphasis added). As stated above, this clarity extends to homosexual and transgender individuals. Where the waters become murky is in instances where individuals do not fit neatly into the gender binary, or when their sexuality is neither heterosexual nor homosexual. The Sixth Circuit recently posited in Hamm v. Pullman SST, Inc., “Does Bostock’s but-for logic also prohibit employers from discriminating against those who are bisexual?” It then declined to answer that question or address whether bisexual, asexual, or otherwise queer orientations would be covered equally. Taken to its logical limits, Bostock’s but-for framework raises difficult questions about how bisexual or asexual individuals fit within Title VII protections. The Bostock Court explained that “if changing the employee's sex would have yielded a different choice by the employer, a statutory violation has occurred.” In the case of bisexual, asexual, or other orientations, however, changing the employee’s sex may not necessarily change the outcome. The example provided by the Supreme Court is illustrative: The two individuals are, to the employer's mind, materially identical in all respects, except that one is a man and the other a woman. If the employer fires the male employee for no reason other than the fact he is attracted to men, the employer discriminates against him for traits or actions it tolerates in his female colleague. Put differently, the employer intentionally singles out an employee to fire based in part on the employee's sex, and the affected employee's sex is a but-for cause of his discharge. Applying this standard to a bisexual employee, one might imagine a male employee terminated for being attracted to both men and women. If the employer were to terminate a female employee for being attracted to both men and women, the termination would not necessarily be discriminatory under a strict but-for analysis. The same logic could apply to employees who are attracted to neither men nor women. Nonbinary Individuals Courts have not yet squarely addressed whether Bostock extends Title VII protections to nonbinary individuals — those who identify outside of the male/female gender binary. This presents a closer question. On the one hand, the Court’s reasoning in Bostock relies heavily on a binary conception of sex. On the other, nonbinary status is arguably “inextricably bound up with sex,” as an employer who discriminates against a nonbinary individual necessarily treats that employee differently because of sex-based considerations. Gender-Affirming Care Bostock also raises practical questions for employers, particularly with respect to benefits. For example, must employers provide gender-affirming care on equal terms across genders? The Eleventh Circuit addressed part of this issue in September 2025 in Lange v. Houston County, Georgia, holding that employers may categorically deny coverage for gender-affirming surgeries so long as the policy applies “regardless of [the employees’] biological sex.” In reaching this conclusion, the court relied heavily on United States v. Skrmetti, reasoning that classifications based on medical use do not implicate Title VII because “a key aspect of any medical treatment is the underlying medical concern the treatment is intended to address.” This focus on medical reasoning eliminates the gender question, thus allowing employers a broader ability to determine what conditions to cover. Conclusion Bostock was a transformative decision, but it is not the final word. As courts continue to grapple with bisexuality, nonbinary identity, and healthcare benefits, its promise remains uneven in application. For employers, the safest course is to interpret Title VII broadly when reviewing workplace discrimination and benefits policies, while remaining mindful of evolving protections for employees across the LGBTQIA+ spectrum.
June 17, 2026
Landlord Representation
What DC's Fair Housing Practices Amendment Act of 2025 Means for Landlords and Tenants
The DC Council is moving forward with legislation that could reshape how landlords charge tenants — both during a tenancy and after a tenant moves out. The Fair Housing Practices Amendment Act of 2025 (Bill 26-126) amends the long-standing Rental Housing Act of 1985 and, if enacted, will introduce new notice requirements, restrict certain fees, and limit how utility costs are passed along to renters. Here's a plain-language look at what the bill does and what it could mean for you, whether you own rental property or rent your home in the District. A New Process for Charging Tenants After Move-Out One of the bill's central changes adds structure to how landlords pursue money owed after a tenancy ends. Under the new rules, when a tenancy terminates, the housing provider must first ask the departing tenant for a forwarding mailing or email address so that required notices can be delivered. Within 45 days of the tenancy ending, the landlord must notify the tenant in writing — either in person or by certified mail to the tenant's last known address — of any alleged unpaid amounts. Those amounts may include unpaid rent, damage beyond ordinary wear and tear, or charges for removing items the tenant left behind. Critically, the notice can't simply assert a dollar value. It must include documentation supporting the claim, along with a statement informing the tenant of their right to dispute it, and the landlord's contact information. Tenants then have 30 calendar days from the date of service to dispute the charges and provide evidence that the amount is inaccurate or has been wrongly attributed to them. If a tenant does so, the landlord must respond in writing within 10 days. And before any unpaid amount can be sent to a debt collector, the landlord must be able to show that the tenant was served with the required notice at least 60 days earlier. For landlords, the practical takeaway is clear: documentation and timing matter more than ever. No More Service or Administration Fees for Utilities The bill also amends a portion of the Rental Housing Act to prohibit landlords from charging tenants — before move-in, during the tenancy, or after move-out — for services the landlord is already legally required to provide. These are services tied to the implied warranty of habitability and to Titles 12 and 14 of the DC Municipal Regulations. The legislation specifically calls out fees related to utilities, trash, locks, and administrative fees for third-party billing as examples of charges that would no longer be permitted. While housing providers can still charge tenants for utilities based on usage, housing providers are forbidden from adding service or administration fees onto tenants' ledger. Limits on Billing Tenants for Common-Area and Vacant-Unit Utilities Beginning January 1, 2027, landlords — and any third party they contract with — will be prohibited from separately billing tenants, outside of monthly rent, for utilities accrued by a building's common spaces or vacant units. The bill defines common spaces broadly to include lobbies, leasing offices, business centers, pools, and fitness centers. "Utility" is likewise defined to cover electricity, gas, sewage and wastewater service, water, and internet or telephone usage. Importantly, the bill does not ban all utility cost-sharing. It expressly preserves the use of a Ratio Utility Billing System (RUBS), which allocates master-metered utility costs among tenants using a formula, such as one based on square footage, occupancy, or number of bedrooms. In other words, landlords can continue to distribute a building's actual metered utility costs among occupied units. What they cannot do is make tenants pay specifically for empty units and shared amenity spaces. What This Means for You If you own or manage rental property in the District, now is the time to review your lease agreements, fee structures, and move-out procedures so you're prepared well before the amended provisions take effect. Procedures regarding security deposit disposition and sending unpaid rent to collections will need to be updated and standardized. Every situation is different, and the way this legislation applies will depend on the specific facts of your lease and circumstances.
June 16, 2026
Labor and Employment
AI in Predictive Analytics for Employee Performance: Risk vs. Reward
Employers are increasingly deploying artificial intelligence (AI) and data-driven tools in performance management in an effort to promote consistency and reduce human bias. Yet these systems inherit the limitations of the data that fuels them, and workplace performance data is rarely neutral. Importantly, AI models are only as reliable as the information on which they are trained, and when that information reflects historical inequities or includes data correlated with protected characteristics, AI-driven performance metrics may perpetuate patterns that have long disadvantaged certain groups of employees. Performance data also frequently lacks critical context. Metrics such as output volume, response times, or client feedback often fail to account for legitimate sources of variation, including disability accommodations, intermittent or protected leave, caregiving responsibilities, or differences in job assignments. AI systems generally struggle to recognize these nuances, even though performance evaluations commonly inform high-stakes decisions involving promotions, compensation, and terminations. When adverse employment actions are grounded in incomplete or misleading data, employers may find it difficult to defend those decisions, particularly where they have a disparate impact on members of protected classes. The takeaway for employers is not to abandon AI, but to deploy it thoughtfully and lawfully. Employers should routinely audit performance data for bias, understand how AI tools weigh and interpret inputs, and train managers to assess AI-generated insights critically rather than accept them at face value. And always remember: human oversight remains essential.
June 16, 2026
Commercial Litigation
United States Tax Court Delivers Important R&D Credit Win for Architectural Innovation
The United States Tax Court released its opinion today on Smith v. Commissioner, T.C. Memo. 2026-50, and it is a significant R&D credit win for taxpayers that perform sophisticated technical work for clients. I am particularly satisfied with the outcome, having had the privilege of litigating this case. This matter involved research credits claimed by Adrian Smith + Gordon Gill Architecture, LLP, or AS+GG, for research activities performed in connection with large scale architectural projects during the 2008, 2009, and 2010 tax years. AS+GG is known for ambitious, complex, and highly sustainable architectural design. The projects at issue involved supertall towers, zero carbon and low energy design concepts, wind studies, solar orientation analysis, structural and environmental performance issues, and other technical design challenges. This context matters, as the case was not about routine design work. The opinion describes a firm working at the edge of what architecture, engineering, and sustainable design could accomplish. In that respect, the case is a useful reminder that R&D credits are not limited to laboratories, software companies, or manufacturing floors. Innovation also happens in design studios, engineering meetings, building models, wind studies, and iterative technical problem solving. The IRS Conceded the Four-Part Test One of the most important features of the case is what was not in dispute by the time of trial. The IRS ultimately conceded that AS+GG’s claimed business components satisfied the four-part test for qualified research under section 41(d). That concession mattered, and it did not happen by accident. A significant part of the case was devoted to developing the factual record on the nature of AS+GG’s work. Through extensive discovery, the taxpayers built the record showing that the projects involved real technical uncertainty, a process of experimentation, and design work directed at performance, sustainability, structure, energy usage, wind behavior, solar orientation, and other technical objectives. By the time of trial, the government no longer tried the case on the theory that the work failed the four-part test. Instead, the IRS conceded that issue, and the trial focused on the funded research exclusion under section 41(d)(4)(H). That is a major point. For taxpayers in architecture, engineering, design, and other technical service industries, the concession reinforces something important: sophisticated client work can involve qualified research. The remaining fight was not whether AS+GG’s work was research. It was whether the funded research rules limited the credit. The Funded Research Issue The funded research exclusion is one of the most important limitations on R&D credits for companies that perform technical work under customer contracts. Section 41(d)(4)(H) excludes research “to the extent funded” by another person. The regulations generally ask two questions: First, was payment contingent on the success of the research Second, did the taxpayer retain substantial rights in the research The Court applied that familiar framework. The taxpayers argued that, after Loper Bright, the Court should not simply accept the regulatory test and should instead adopt a narrower reading of “funded.” The Court rejected that argument and held that the funded research regulations remain valid. That part of the opinion is important, but it should not obscure the practical taxpayer win. Even applying the regulatory framework urged by the government, the taxpayers prevailed on the central issue that mattered most for four of the six sample projects: substantial rights. The Taxpayer Win: Substantial Rights The heart of the opinion is the Court’s substantial rights analysis. The Court held that AS+GG retained substantial rights in the research performed on four of the six sample projects: Atrium City Tower, Masdar HQ, Atrium City Masterplan, and Plot R2. That holding matters because a taxpayer that retains substantial rights in the research may still claim R&D credits on a reduced basis, even if the Court concludes that payments were not contingent on success. The practical result is that AS+GG was not treated as having simply performed fully funded research for a customer on those projects with no credit available. Instead, the Court recognized that AS+GG retained meaningful rights to use the results of its research in its business. That is a significant result in a funded research case. It is also a lesson in contract drafting. The Court did not treat intellectual property provisions, copyright language, licenses, confidentiality clauses, settlement agreements, and use restrictions as boilerplate. It parsed the language project by project. On some projects, the language preserved enough rights for the taxpayer. On others, it did not. That project-by-project analysis is one of the most useful aspects of the opinion. It shows that small differences in contract language can produce very different R&D credit outcomes. Why this Matters for R&D Credit Taxpayers Smith is especially useful for architecture, engineering, construction, consulting, design, and other technical service businesses. Many of these companies assume that R&D credits are unavailable because they perform work for clients. That assumption is too broad. A customer contract does not automatically eliminate the credit. The funded research rules are more nuanced. The key questions are who bears the relevant risk and whether the taxpayer retains meaningful rights in the research. The opinion reinforces several important points. First, design and architecture can involve qualified research. The Court’s factual findings describe technical work involving sustainability, wind, energy, structure, geometry, performance, and environmental constraints. Those are exactly the kinds of uncertainties that can support R&D credit claims when properly documented. Second, substantial rights matter. A taxpayer does not necessarily lose the credit merely because the customer receives project rights, licenses, or deliverables. The question is whether the taxpayer retained meaningful rights to use the research results in its own business. Third, contracts matter. The funded research analysis is driven heavily by the agreement between the taxpayer and the customer. Taxpayers who wait until audit to think about substantial rights are often too late. Fourth, documentation still matters. The Court left the precise credit amounts to be determined through computation. That is a reminder that winning the legal issue is not enough. Taxpayers also need project level documentation and expense substantiation that allow the allowable credit to be calculated. A Strong, Reasonable Compensation Win The opinion also includes an important win on reasonable compensation, an issue I personally handled at trial, and one of the most satisfying parts of the case. AS+GG’s R&D credit included wage related qualified research expenditures attributable to the partners. The government challenged the partners’ 2008 compensation under section 174(e), arguing for a much lower reasonable compensation amount. At trial, a central part of the taxpayers’ case revealed that the government’s reasonable compensation theory did not fit the economics of the business. That point came through clearly in the expert testimony. The IRS expert advanced a much lower compensation number under a multifactor analysis, but his own independent investor analysis showed that, even after his adjustments, AS+GG generated a 939% return on equity. On that math, he concluded that the partners’ total compensation was not unreasonable. That was a powerful trial point. The government’s expert opinion, when tested against the controlling Seventh Circuit standard, supported the taxpayers. The Court agreed that the independent investor test applied because the case was appealable to the Seventh Circuit. Once that standard governed, the result followed: the partners’ 2008 compensation was reasonable under section 174(e). That holding is meaningful for owner-operated businesses where the people driving the research are also principals of the business. In those cases, the R&D credit often depends not only on whether the work qualifies, but also on whether compensation paid to key technical leaders can be included in wage QREs. Here, the Court accepted the taxpayers’ position and preserved an important component of the credit. Practical Takeaways The biggest takeaway from Smith is that R&D credit planning should begin before the contract is signed. Taxpayers performing technical work for customers should review their agreements for at least three things: First, what happens if the research fails Second, who owns the work product, technical information, drawings, designs, models, methods, and other research results Third, does the taxpayer retain the right to use what it learned and developed in future work Those questions should be addressed in the contract itself. They should not be left to implication, course of dealing, or after-the-fact argument. This case also highlights the importance of project-level documentation. Taxpayers should identify the business components, the technical uncertainties, the process of experimentation, the employees or principals performing qualified services, and the expenses tied to the research. Conclusion Smith v. Commissioner is a significant R&D credit decision and a gratifying taxpayer win. The IRS conceded that the work satisfied the four-part test. The Court held that AS+GG retained substantial rights in four of the six sample projects and allowed the taxpayers to claim research credits to the extent permitted by the funded research rules. The Court also accepted the taxpayers’ position on reasonable compensation, preserving an important wage QRE issue. For taxpayers in architecture, engineering, design, consulting, and other technical service businesses, the message is encouraging: customer contract work does not automatically defeat the R&D credit. But the contract language matters, the retained rights matter, and the record matters.
June 16, 2026
Business
Why the Friendly PC Model Remains Critical to Healthcare Private Equity Transactions with Medical and Dental Practices
Private equity (“PE”) activity in healthcare across the United States has caused continued focus by state legislatures and enforcement agencies on the doctrines of corporate practice of medicine and dentistry (“CPOM” or “CPOD”). Notwithstanding this attention, the often-referenced “Friendly PC” model remains the optimal corporate strategy to ensure post-closing compliance with CPOM and CPOD regulations in most jurisdictions. The following identifies some key considerations for the agreement's ancillary to the purchase of the non-clinical assets by the PE company’s management services organization (“MSO”), which are commonly used to ensure compliance with CPOM and CPOD. Friendly PC Model As a general matter, the term “Friendly PC” model in PE healthcare deals most often refers to a business arrangement where a physician or dentist-owned professional corporation (“PC”) sells all of its non-clinical assets to an entity owned by the MSO (controlled by the PE firm), which then takes responsibility for the PC’s non-clinical business operations. This model complies with fundamental CPOM and CPOD legal requirements, which are designed to restrict non-physicians from owning or controlling medical practices. Such a structure prevents the PE buyer from owning clinical assets or unduly controlling the clinical operations and decision-making of the providers employed by the PC. In the “Friendly PC” structure, the parties designate a single clinical professional to serve as the sole owner of the PC post-closing. This individual is referred to as the friendly physician or dentist (“Friendly Provider”), who is then expected to cooperate with the PE buyer in accomplishing its business goals. Such a transaction requires the drafting of a series of agreements to accomplish the necessary purposes of the arrangement. Although the nature and scope of such agreements may vary slightly based upon preference and applicable state law, below is a brief description of certain key agreements, and their most necessary elements, to ensure the PC’s compliance with CPOM and CPOD laws post-closing. Management Services Agreement The Management Services Agreement (“MSA”) is entered into between the PC and the MSO, which is owned by the PE buyer. Through this agreement, the MSO is responsible for providing and arranging for certain non-clinical administrative, business support, and back-office services on behalf of the PC. The MSA will clearly state that the MSO entity will not play any role in the care of patients and will specify the limitations of the actual services to be provided so as to ensure it will not fall within the applicable state’s definition of the practice of medicine or dentistry. It is also very important that the MSA define the independent contractor nature of this commercial relationship and seeks to avoid creating a de facto partnership between the MSO and the PC.1 Overly lengthy initial contract durations, requirements for minimum operational hours per period, the ability to negotiate payor and other agreements without the PC’s consent, and compensating the MSO through a percentage of the PC’s profits are all commonly mishandled deal points that could create an unintended partnership in the eyes of a regulatory agency.2 As such, legal counsel must carefully tailor these provisions to avoid such a problematic presumption. Equity Transfer Restriction Agreement This agreement establishes a highly restrictive framework which governs the ownership and transfer of the Friendly Provider’s interests in the PC, giving the MSO near-complete control over any change in ownership. As a baseline rule, no transfer of equity—whether voluntary, involuntary, or by operation of law—may occur without the MSO’s prior written consent, which may be granted or withheld in its sole discretion. The central mechanism is a set of transfer events (e.g., death, disability, termination of services, loss of licensure, legal disqualification, divorce, regulatory issues, or breach of agreements), upon which the Friendly Provider’s entire ownership interest is automatically and immediately transferred—without notice or further action—to an MSO–designated transferee. This transfer occurs by operation of contract, is effective upon the triggering event, regardless of administrative formalities and is typically priced at a nominal $1.00. In addition, the MSO typically holds a unilateral call option enabling it to trigger a forced transfer of all equity at any time by delivering notice, which itself constitutes a transfer event and results in the same automatic $1.00 transfer to its designated transferee. Following any such transfer, the Friendly Provider is automatically stripped of all ownership, governance roles, and economic rights in the PC. The agreement further reinforces this control structure through ongoing covenants that prohibit the Friendly Provider and the PC from taking a wide range of corporate, financial, and operational actions without MSO approval, ensuring that both ownership continuity and strategic direction remain fully aligned with the MSO’s interests. Provider Employment Agreement The provider employment agreement is often viewed as the most important by medical professionals who are divesting their interest in the PC. It includes terms and conditions regarding compensation and various restrictive covenants (i.e., non-competition, non-solicitation, confidentiality) that are critical to the clinician’s relationship with the PC. Legal counsel should ensure that the employment agreement also contains specific provisions or guarantees that the clinical professionals will maintain broad autonomy in all clinical decision-making and treatment of patients post-closing.3 Under no circumstances may the PC exercise any undue control over this aspect of their clinical professional employees’ job performance, and expressly stating as such within this agreement may help the arrangement survive future scrutiny.4 Clinical Liaison Agreement Lastly, the Clinical Liaison Agreement (“CLA”), typically entered into by the PE management entity and the Friendly Provider, is a frequently used means to outsource the development and implementation of the medico-administrative services of the PC. As a licensed professional in the state of operation, the Friendly Provider is the only party legally authorized to provide such services as the supervision of clinical staff, the development of clinical policies, and the leadership of patient-related programs and initiatives. The existence of such an arrangement is therefore imperative for the post-closing clinical management of the PC. As with the other agreements, the CLA should involve a reasonable term length and consideration for the Friendly Provider’s time and effort, and it should also protect the Friendly Provider’s necessary autonomy to perform their duties as outlined therein.5 Conclusion As scrutiny of “Friendly PC” transactions continues in light of consumer and legislative concerns over the affordability of health care services, the need for proper separation of clinical and non-clinical management post-closing is likely to be more important now than in years past. As such, PE buyers and their counsel must pay close attention to these frequently overlooked ancillary agreements to ensure the truly independent nature of their post-closing relationships. 1See Warren J. Apollon, D.M.D., P.C. v. OCA, Inc., 592 F. Supp. 2d 906; and OCA, Inc., et al . Kellyn Hodges, D.M.D., M.S., et al., 615 F. Supp. 2d 477. 2Id. 3The definitions of “Practice of Medicine” and “Practice of Dentistry” vary by state, however, guidance provided by the Pennsylvania Board of Medicine provides examples of the types of rights and privileges of licensed providers that must not be interfered with or influenced by unlicensed persons or entities. (See 63 P.S. § 422.1, et seq., 63 P.S. § 120, et seq.) 4Id. 5https://journalofethics.ama-assn.org/article/physician-engagement-private-equity-firms/2025-05
June 15, 2026
Intellectual Property
Trademark Office Actions Explained: Why They Feel Random Yet Aren't
For many in-house legal teams, the most frustrating part of the trademark registration process is the Office Action. A trademark application is filed after discussions with marketing, business leaders, and outside counsel. Clearance (hopefully) were conducted. Filing strategies were approved. Then, after months of silence, a letter arrives from the U.S. Patent and Trademark Office raising objections that can feel technical, unexpected, or disconnected from how the brand actually operates in the marketplace. The reaction is often the same: Why is this happening? Why now? Didn't we already do the work to avoid this? From the applicant's perspective, Office Actions can appear arbitrary. Yet from the USPTO's perspective, trademark examination is one of the most structured parts of the registration process. What feels random to applicants is usually the result of a defined review process applied to imperfect information. Understanding that process can help in-house counsel manage expectations, communicate more effectively with business stakeholders, and make better strategic decisions when issues arise. Why Office Actions Feel Arbitrary Part of the frustration stems from timing. Trademark applications often sit for several months before they are assigned to an examining attorney. During that period, the business has usually moved on. Marketing campaigns may already be underway. Product launches may be approaching. Internal teams assume that no news is good news. Then the Office Action arrives. Because of the delay, the refusal often feels disconnected from the decisions that led to the filing. The individuals who selected the mark may no longer remember the details of the clearance process. New stakeholders may question why the issue was not identified earlier. Budget assumptions may have been based on the expectation of a straightforward registration. The substance of the refusal can compound the confusion. A likelihood of confusion refusal may compare two marks that, from a commercial perspective, seem entirely different. A descriptiveness refusal may target a name that the marketing department considers highly creative. Technical objections regarding identifications of goods and services may appear to focus on wording rather than the underlying business reality. To business teams, these objections can seem detached from common sense. In reality, they reflect the fact that trademark examination occurs within a specific legal framework that prioritizes the contents of the application record over marketplace nuance. How Examining Attorneys Actually Review Applications Trademark examiners do not begin with the applicant's business strategy. They do not evaluate whether the mark was expensive to develop or whether substantial resources have already been invested in a launch. Trademark examiners review applications using a structured analytical process. The examining attorney assesses the mark as filed. They review the identified goods and services. They compare the application against existing registrations and pending applications. They evaluate whether the mark is merely descriptive, generic, deceptively misdescriptive, or otherwise barred from registration under the Trademark Act. They also confirm that the application satisfies various procedural and technical requirements. The examination is therefore limited by the record before the USPTO. Examining attorneys generally do not investigate how the applicant actually uses the mark beyond what is reflected in the application and supporting materials. They do not independently explore the applicant's target consumers, brand architecture, or commercial objectives. They do not assess whether business stakeholders believe confusion is unlikely in practice. Their role is narrower. They apply statutory standards and USPTO guidance to the application as presented. They live in the “Trademark Manual of Examining Procedure.” For in-house counsel, this distinction is important because it highlights how early filing decisions can significantly influence later outcomes. Choices regarding the wording of identifications, the breadth of claimed goods and services, the quality of specimens, and the evidence included in the record can all shape the examination process months later. The Most Common Triggers for Office Actions Although Office Actions often feel unpredictable, most fall into a relatively small number of recurring categories. Likelihood of confusion refusals under Section 2(d) remain among the most common. These refusals frequently arise because the trademark register is increasingly crowded. Even marks that appear distinguishable from a branding perspective may encounter issues when similar marks cover overlapping goods or services. Broad identifications can exacerbate this problem. When an application claims expansive categories of goods or services, the examining attorney must assume that the applicant intends to operate throughout the full scope of those descriptions. This can create conflicts that might not exist if the identification more accurately reflected the applicant's actual business activities. Descriptiveness refusals under Section 2(e)(1) also occur regularly. Marketing teams often gravitate toward names that immediately communicate product attributes or benefits. From a branding perspective, these choices can be compelling because they convey information efficiently. From a trademark perspective, however, they may raise concerns regarding whether the proposed mark merely describes the identified goods or services. Specimen refusals represent another common category. These frequently stem from timing pressures associated with filing. Businesses eager to secure rights may submit materials that do not clearly demonstrate trademark use, or that fail to associate the mark with the relevant goods or services in the manner required by the USPTO. In many cases, these Office Actions do not reflect unusual circumstances or examiner idiosyncrasies. Rather, they are predictable outcomes resulting from how the application was prepared and supported. How to Respond Without Overreacting Receiving an Office Action should not automatically trigger an alarm. Some Office Actions are largely procedural. Amendments to identifications of goods and services, disclaimer requirements, and requests for clarification can often be resolved efficiently without materially affecting the scope of protection sought. Others require more substantive analysis. A likelihood of confusion refusal may warrant consideration of arguments distinguishing the marks, amendments narrowing the identification, coexistence discussions with third parties, or reassessment of the filing strategy. Descriptiveness refusals may prompt evaluation of acquired distinctiveness claims, supplemental registration options, or broader branding considerations. The critical task for in-house counsel is distinguishing between issues that genuinely threaten the viability of the brand and those that simply require thoughtful adjustment. Treating every Office Action as a crisis can create unnecessary friction with business stakeholders and increase legal costs. Conversely, minimizing significant refusals may expose the organization to avoidable risk. A measured approach grounded in an understanding of the examination process allows legal teams to calibrate their responses appropriately. What This Means for In-House Oversight Office Actions should not be viewed solely as obstacles or evidence that something has gone wrong. In many respects, they function as feedback mechanisms. They identify areas where the application record can be improved, where filing assumptions may warrant reconsideration, or where the realities of the trademark landscape impose limitations that were not fully appreciated at the outset. For in-house counsel, this perspective shift can be valuable. Understanding how examining attorneys evaluate applications enables legal teams to set more realistic expectations with marketing and executive leadership. It encourages more deliberate decision-making during the application stage. It also facilitates more productive conversations with outside counsel regarding risk tolerance, filing strategies, and response options. Perhaps most importantly, it reduces the perception that the USPTO operates unpredictably. Trademark examination is not random. It is systematic. But it is a system that relies heavily on the quality and precision of the information provided to it. When businesses recognize that dynamic, Office Actions become easier to understand and manage. They cease to be viewed as unexpected disruptions and instead become part of a broader process aimed at defining the scope of protectable rights. That understanding does not eliminate frustration. Delays will still occur. Disagreements with examining attorneys will remain inevitable. Difficult strategic decisions will still arise. But it does replace uncertainty with context. And for in-house teams responsible for guiding brands through increasingly complex trademark portfolios, that context can make all the difference.
June 15, 2026
Business
Why Real Estate Issues Slow ETA Deals
Most buyers expect environmental issues to be the real estate risk. In many deals, the larger risk is operational disruption. Real Estate Is Involved in Most ETA Transactions Real estate shows up in the vast majority of lower middle market transactions in some form. According to the 2025 Small Business Credit Survey published by the Federal Reserve: approximately 59% of operating businesses with employees operate from leased facilities approximately 17% operate from owned facilities approximately 17% primarily operate from a residence or without a dedicated operating facility That means roughly 83% of entrepreneurship through acquisition transactions involve some form of real estate or occupancy issue. In many deals, the primary issue is not ownership of the property itself. It is whether occupancy, control rights, lease assignment provisions, lender requirements, zoning, or permits could interfere with the business continuing to operate after closing. Those risks often become the primary real estate issues affecting the transaction. Most Buyers Initially Focus on Environmental Risk Environmental exposure absolutely matters. Particularly in: manufacturing industrial logistics automotive fuel-related operations older commercial corridors Phase I and Phase II reports remain critical diligence tools. But many search funders, independent sponsors, and ETA buyers do not place enough weight on operational interruption risk. While the business may technically exist independent of the property, operationally, it often does not. Location Becomes Part of the Business Most of these businesses are highly dependent on their physical operating environment. Examples include: machine shops with specialized electrical infrastructure distributors dependent on loading access and trucking routes contractors relying on outdoor storage rights restaurants dependent on parking and liquor licensing healthcare operators dependent on permitted use manufacturers operating under grandfathered zoning protections The issue is not simply whether the business can move. The issue is: cost of relocation operational downtime customer disruption employee retention permitting risk lender reaction transition timing Many ETA buyers do not fully appreciate this until diligence deepens. Lease Problems Often Surface After LOI One issue that repeatedly appears in ETA deals is whether the business can continue occupying the property after closing under the existing lease arrangements. Many buyers initially assume that the lease will (and can) transfer automatically at the time of closing. That is often incorrect. Most commercial leases contain assignment restrictions, consent requirements, or change-of-control provisions that must be examined carefully during diligence. Buyers need to identify: anti-assignment clauses landlord consent requirements change-of-control provisions expired lease terms undocumented extensions side agreements reflected only in emails use restrictions relocation rights held by landlords personal guarantees tied to the seller While the business operated successfully under these arrangements for years, a transaction introduces scrutiny, diligence, lender review, and operational friction. Lenders Underwrite Real Estate Issues Aggressively Occupancy stability becomes especially important in financed transactions. Particularly: SBA-backed deals owner-occupied industrial acquisitions cash flow sensitive businesses location-dependent operations Lenders often focus heavily on: remaining lease term renewal rights assignability ownership structure related-party lease economics appraised value environmental exposure zoning compliance A business with strong EBITDA but only 18 months remaining on a lease can quickly become a financing issue. Especially if the landlord has leverage during the closing process. Owned Real Estate Creates a Separate Transaction (and Separate Issues) Buyers often assume owned real estate simplifies the acquisition. In reality, it frequently creates a separate parallel transaction with its own diligence process, timeline, costs, and risks. The buyer must now perform diligence on both the operating business and the real estate itself, including: title survey and boundary issues easements zoning environmental exposure permits deferred maintenance tax exposure utility access stormwater compliance shared access arrangements The ownership structure also becomes critical, with many ETA deals using separate entities for the business and real estate. For example: one LLC owns the operating business another entity owns the real estate the operating company leases the property from the real estate holding company That structure often creates cleaner liability separation, financing flexibility, estate planning opportunities, and long-term control over the property. The larger problems often appear when the business and property were never properly separated in the first place. Many older lower middle-market businesses operate under informal ownership structures where: the seller personally owns the property family members own portions of the real estate title ownership differs from operational control there is no formal lease occupancy economics were never documented properly related-party arrangements evolved informally over decades That creates a very different set of diligence and execution risks. Buyers now need to examine: who actually owns the property whether all owners are participating in the transaction whether any family members must consent whether the operating business has formal occupancy rights whether market rent materially changes EBITDA whether lender underwriting changes once rent is normalized whether personal use or mixed-use issues exist whether title, tax, or succession issues affect the property whether post-close disputes could arise around occupancy or control Real Estate Distorts EBITDA More Than Buyers Expect Normalized occupancy costs also frequently change the underwriting. This issue regularly shows up in entrepreneurship through acquisition transactions, causing the business to appear more profitable because the seller owns the building. The company may operate with: below-market rent no formal lease favorable related-party occupancy terms deferred maintenance underreported capital needs Once the buyer normalizes rent, maintenance, taxes, insurance, market occupancy economics, and other carrying costs, the cash flow can compress quickly. That affects: leverage availability DSCR calculations valuation purchase price expectations post-close cash needs This is particularly important in manufacturing, warehouse, automotive, and hospitality acquisitions. Zoning Problems May Remain Hidden Until Diligence It can be a misconception to assume: “The business already operates there, so zoning must be fine.” Not always. A lack of zoning compliance can significantly disrupt operations. Businesses sometimes operate under: grandfathered nonconforming uses historical variances undocumented expansions expired permits improper outdoor storage occupancy inconsistencies signage violations prior approvals tied to historical ownership A transaction can trigger: new permit review lender diligence insurance underwriting review municipal scrutiny updated inspections The business may have operated without issue for years, but that does not mean the use remains protected post-closing. Real Estate Risk Can Show Up Everywhere Real estate issues quickly spread into: financing operations integration employee retention transition planning insurance working capital timing of closing The issues then become larger than the property itself. Real estate issues are most prevalent in lower middle market acquisitions where: documentation evolved informally occupancy arrangements were relationship-driven operational processes were never built for institutional diligence In these ETA deals, the answer to the real estate question ultimately controls: “Can the business continue operating the same way immediately after closing?”
June 10, 2026
Family Law
Protective Orders: Criminal Lawyer or Family Lawyer
It may be best to involve a criminal defense attorney in a protective order case because the consequences often extend far beyond family court. Although protective order proceedings are technically civil matters, they can create significant criminal, constitutional, and long-term legal issues. Hidden Criminal Risks in Protective Order Cases Allegations made during a protective order hearing may expose a person to potential criminal investigation or prosecution. Statements made under oath in a protective order proceeding can later be used in related criminal cases involving assault, harassment, stalking, or violations of court orders. A criminal attorney is trained to evaluate those risks and help avoid admissions that could later expose criminal exposure. In addition, protective orders can carry serious restrictions that resemble criminal sanctions. A final order may require someone to leave their home, lose firearm rights, avoid contact with family members, or face immediate arrest for any alleged violation. Violating a protective order can itself become a criminal offense, even if the underlying family dispute remains unresolved. Protective orders can affect related family law matters, including custody and visitation. Findings of abuse may later influence custody decisions under the “best interests of the child” standard. Because of that overlap, coordination between family law strategy and criminal defense strategy is often critical. Having a family lawyer represent you at a protective order hearing may appear as a posturing tactic to the judge in your family law case. There are also collateral consequences that many people do not initially consider. A protective order can influence employment, professional licenses, military status, security clearances, immigration matters, and housing opportunities, which may impact a family law case or a criminal matter. In most cases, the best approach involves both a family law attorney and a criminal defense attorney working together. Family law counsel may focus on custody, divorce, and long-term parenting issues, while criminal counsel focuses on avoiding criminal exposure.
June 8, 2026
Family Law
Understanding Financial Coercion in Family Law Cases
Representing a financially dependent spouse in a family law case often involves more than simply litigating support or property division. In many cases, the dependent spouse may also be experiencing financial coercion, which is a form of control in which one party uses money, access to resources, or economic pressure to dominate or manipulate the other spouse during the marriage or throughout the litigation process. Common Forms of Financial Control in Marriage Financial coercion can take many forms. One spouse may control all bank accounts, restrict access to funds, monitor spending, cancel credit cards, refuse to provide financial information, provide limited spending budgets, or threaten to stop paying household expenses unless certain demands are met. In some situations, the dependent spouse may have little knowledge of the family’s finances because the other spouse historically managed all income, investments, taxes, and accounts. Legal Challenges Faced by Financially Dependent Spouses These dynamics can place the dependent spouse at a severe disadvantage during divorce litigation. A spouse without access to money may struggle to retain counsel, secure housing, pay experts, or even meet daily living expenses while the case is pending. Fear of financial instability can also pressure a dependent spouse into accepting unfair settlement terms. How Courts Address Economic Imbalance During Divorce Family law courts increasingly recognize that economic control can affect the fairness of the litigation process itself. Requests for pendente lite support, attorney’s fees, temporary use and possession of the marital home, and orders requiring financial disclosures may become critical tools in leveling the playing field. Early intervention is often essential to stabilize the dependent spouse financially before meaningful negotiations can occur. Importance of Financial Documentation and Evidence Documentation is particularly important in these cases. Bank records, account access history, spending restrictions, hidden assets, sudden transfers of funds, and communications involving financial threats may all become relevant evidence. Attorneys may also need to work closely with forensic accountants or financial experts when there are concerns about concealed income, business manipulation, or dissipation of assets. Emotional and Psychological Impact of Financial Coercion Beyond the legal and financial issues, financial coercion frequently has a significant emotional and psychological impact. Many dependent spouses experience anxiety, fear, embarrassment, or a lack of confidence in making financial decisions independently. Effective representation often requires patience, education, and helping the client regain a sense of stability and autonomy throughout the litigation process. Advocating for Fairness and Financial Independence Ultimately, representing a financially dependent spouse involves more than seeking support payments or dividing assets. It often requires addressing an imbalance of power that has existed throughout the relationship and ensuring that the dependent spouse has a fair opportunity to participate in the legal process and rebuild financial independence moving forward.
June 8, 2026
Landlord Representation
HUD’s New Fair Housing Governance Strategies: Accountability, Detection, and Interagency Strategic Targeting
HUD’s unending flurry of announcements, proposed rulemaking, and press releases is neither subtle nor accidental. Over the past 18 months or so, HUD’s announcements have coalesced around three themes likely to shape the next several years of federal housing policy. First, accountability will be operationalized. HUD’s willingness to impose monitorship and assume control of PHAs indicates that compliance failures will increasingly be met with intervention, rather than incremental guidance. Second, civil rights compliance and enforcement remain in flux. As HUD advances regulatory changes and courts inevitably weigh in (over the years to come), housing providers must prepare for a period of doctrinal instability. Third, enforcement will be both targeted and strategic. By selecting high-profile investigations, HUD can influence industry behavior beyond the immediate parties, effectively regulating through example. Taken together, these reflect a deliberate recalibration of federal housing governance, one that blends fair housing enforcement with a renewed emphasis on operational accountability, explicit civil-rights policy, and interagency coordination. The result is a framework that is less about suggested guidance and more about institutional posture: HUD is signaling how it intends to govern, enforce, and intervene for the foreseeable future. From Oversight to Intervention: HUD Reignites Direct Federal Control HUD’s recent actions against local public housing authorities demonstrate a shift from general oversight to direct intervention. The February 2026 placement of the Manhattan Housing Authority into federal monitorship introduced a familiar but newly emphasized tool: the imposition of HUD-appointed “Cure Monitors,” enhanced oversight of procurement and financial controls, and the threat of escalation to full federal possession. That threat materialized mere months later. In May 2026, HUD declared the Little Rock Housing Authority in “substantial default,” dissolved its governing board, and assumed full possession of its programs and assets after finding material violations of a prior recovery agreement. On their face, these actions are rooted in statutory authority (which has long been available to HUD). However, their recent deployment and the speed with which monitorship escalated into possession suggests a revived willingness to unlock this authority. The administrative message is clear: recovery agreements are no longer aspirational. They are enforceable benchmarks, and failure to meet them may trigger immediate consequences. If HUD is prepared to step into the role of operator, the risk of noncompliance becomes substantial. Redefining Civil Rights: From Enforcement Pause to Framework Reset Parallel to this enforcement posture, HUD has undertaken a second, more ideological project: redefining key civil rights concepts within its regulatory framework. In 2025, HUD halted enforcement of aspects of the 2016 Equal Access Rule, signaling a departure from prior interpretations of nondiscrimination obligations in HUD-funded programs. By 2026, that pause had evolved into a proposed rulemaking effort to revise terminology across HUD regulations — removing “gender identity” from interpretations of “sex” and refocusing program requirements on “biological truth.” HUD is not simply deprioritizing enforcement; it is attempting to rewrite the regulatory vocabulary through which compliance is measured. That shift carries consequences not only for shelters and supportive housing providers (where the immediate impact is often most pronounced) but also for any multifamily operator navigating layered federal, state, and local nondiscrimination obligations. The result, at least in the near term, is regulatory fragmentation. Federal program requirements may diverge from state or local law, forcing housing providers into a position of having to simultaneously comply with potentially conflicting regimes. The challenge becomes less about choosing sides and more about engineering policies that can withstand the counterpressure of competing bodies (federal vs. state). The Selective Spotlight: Fair Housing Enforcement Through High-Profile Investigations If HUD’s regulatory proposals define its internal posture, its public-facing enforcement priorities are equally illustrative. The agency’s 2026 decision to open a Fair Housing Act investigation into a planned development in Texas — based on allegations of religious and national origin discrimination — reflects a renewed willingness to bring high-visibility cases that test the boundaries of community identity and exclusivity. The Fair Housing Act has long prohibited discrimination based on those two protected traits. What is notable here is not the legal theory but the emphasis: HUD is scrutinizing how developments are conceived, marketed, and structured, not merely how individual applicants are treated. Allegations involving targeted messaging, financial structures tied to religious institutions, and tiered access mechanisms illustrate HUD’s expansive view of what may constitute discriminatory conduct. This investigation may serve a dual function. It is both an enforcement action and a signaling device, communicating to the market that branding strategies and community frameworks will be evaluated through a fair housing lens, even at the conceptual stage. Interagency Alignment These developments do not exist in isolation. HUD’s participation in broader federal initiatives — including task force activity and coordination with the Department of Justice and Department of Homeland Security — reflects an increasingly strategic enforcement model. This model prioritizes data sharing, coordinated investigations, and multi-agency responses to alleged systemic issues, whether framed as mismanagement, discrimination, or public safety concerns. The practical effect is: issues that once unfolded within a single agency may now trigger parallel scrutiny across multiple federal actors. A Forward-Looking Assessment The way HUD deploys its authority — combining intervention, redefinition, and selective enforcement — signals a more assertive and unpredictable regulatory environment. For multifamily stakeholders, the lesson is less about any single announcement and more about the pattern they form. HUD is not merely administering housing programs; it is actively shaping the conditions under which those programs (and, perhaps, the broader housing market) operate. The prudent response is not reactionary compliance, but anticipatory governance: aligning policies, partnerships, and practices with federal (and state) requirements.
June 3, 2026
Estates and Trusts
Mind the Gap: Naming an “In-Between” Guardian for Your Minor Children
Even the best estate plans can leave an unintended gap. For parents of minor children, that gap may arise between a parent’s death or incapacity and the court’s formal appointment of a guardian. During that in-between period, it may be unclear who is authorized to care for the children, make medical decisions, or handle day-to-day responsibilities. While many parents focus on creating a will, naming beneficiaries, and appointing fiduciaries, they should also consider a temporary guardianship designation. In Maryland, this separate document enables parents to name a trusted person who can step in immediately to care for their children until a permanent guardian is appointed. For any parent, the thought of leaving children behind is understandably difficult. But estate planning is ultimately about making sure your children are cared for if the unexpected happens. A temporary guardianship designation is one of the most practical ways to provide guidance and reassurance during a crisis. The Gap a Will May Not Cover In Maryland, a will can nominate a guardian for minor children, but a will alone may not address the immediate realities after a parent’s death. Before a court formally recognizes the guardian nomination, there may be a period of uncertainty about who is authorized to care for the children and make important decisions on their behalf. A temporary guardianship designation helps fill that gap by providing clear directions as to who should step in immediately. This can minimize confusion among family members, reduce the likelihood of disputes, and help avoid emergency court intervention. It can also help avoid the need for an emergency custody proceeding if a friend or family member must step in unexpectedly without written authority to care for the children. By documenting the parents’ wishes in advance, the temporary designation can provide written authority and practical guidance during an already stressful situation. What Happens Without a Plan Ignoring this issue can create significant practical and emotional challenges. Imagine both parents are unexpectedly killed in an accident. Without temporary guardianship documentation, relatives may disagree about who should care for the children. In some cases, children may even be placed temporarily with social services until the court appoints a guardian. Even a brief period of uncertainty can be deeply unsettling for children already coping with grief and upheaval. By contrast, when parents have signed temporary guardianship documents, the transition is often far smoother. The designated individual—often someone nearby—can step in right away to provide housing, routine, emotional support, and day-to-day care until longer-term arrangements are finalized. Children are more likely to remain in familiar surroundings, continue attending the same school, and maintain important relationships during an extraordinarily difficult time. Choosing the Right Person Selecting a temporary guardian requires careful thought. Parents should choose someone they trust deeply and who shares similar values regarding parenting, education, and discipline. Practical considerations matter as well. The individual should be willing and able to take on the responsibility emotionally, physically, and logistically. Location may also be a factor. While naming someone nearby may reduce disruption, many parents choose out-of-state relatives based on strong relationships or shared values. The best choice is the person best able to provide a stable, supportive environment. Parents should also discuss the role with the proposed guardian in advance. Open communication helps prevent surprises and gives that person an opportunity to ask questions and understand expectations. It is also wise to name one or more alternates in case the primary choice is unavailable. Parents should review these designations periodically as family circumstances and relationships evolve. The temporary and permanent guardians may be the same person, or they may be different individuals. When the same person serves in both roles, the temporary guardianship enables him or her to step in immediately and helps prevent children from remaining in legal limbo until the court formalizes the longer-term appointment. Part of a Bigger Plan A temporary guardianship designation works best as part of a comprehensive estate plan that may also include wills with trust provisions, powers of attorney, and advance medical directives. While a temporary guardian handles a child’s immediate care, a trustee may manage financial resources for the child’s benefit. Coordinating these roles helps ensure that children are both emotionally supported and financially protected. Parents should also understand that Maryland courts ultimately retain authority over guardianship decisions. A temporary designation does not eliminate court involvement, but it does provide strong evidence of the parents’ wishes during a difficult transition. A Simple Step That Makes a Real Difference Too often, parents postpone estate planning because they feel too young, too healthy, or too busy. But emergencies can happen without warning. Naming an “in-between” guardian is one way parents can help ensure that someone they trust is ready to step in when it matters most.
June 3, 2026
Commercial Litigation
The NFL and the Limits of Arbitration Agreements: What Employers Need to Know
Brian Flores, an NFL coach, recently made headlines after the U.S. Supreme Court declined to intervene in a dispute over whether his claims must be arbitrated. Flores asserted race discrimination claims against the NFL and several teams arising from his employment. With the Court denying certiorari on the enforceability of the NFL’s arbitration agreement, those claims will proceed in federal court in the Southern District of New York. This development is notable given the increasing prevalence of arbitration agreements in employment relationships. Many employers require employees to sign arbitration agreements at the outset of employment, often limiting their ability to litigate claims, such as discrimination or wage-and-hour disputes, in court. Because courts frequently grant motions to compel arbitration under these agreements, more disputes are diverted away from judicial forums. However, the NFL’s experience in this case illustrates that not all arbitration agreements will withstand judicial scrutiny. The Federal Arbitration Act (“FAA”) embodies a strong federal policy favoring arbitration, meaning that the vast majority of arbitration agreements will stay a federal suit while the parties proceed in an arbitral forum. Still, that policy is not without limits. Arbitration agreements must preserve a party’s ability to pursue statutory remedies and must, in substance, provide for arbitration, not merely label a process as such. In Flores v. New York Football Giants, Inc., the Second Circuit concluded that the NFL’s arbitration provision did fall under the purview of the FAA. The court emphasized two critical deficiencies. First, the agreement failed to provide for an independent forum for resolving disputes. Instead, it vested authority in the NFL Commissioner to oversee the process. This arrangement fell short of the neutrality expected in arbitration. As the court explained, an arbitration agreement must contemplate an “independent forum that is separate from the parties to the dispute.” A process that requires one party to submit disputes to the “substantive and procedural authority of the principal executive officer” of the opposing party is “an agreement for arbitration in name only.” Second, the agreement lacked sufficient procedural framework. Under the FAA, an arbitration agreement must establish how disputes will be resolved. Although the NFL’s provision granted the Commissioner authority to define procedures, the court found this open-ended delegation inadequate. Thus, the agreement “bore virtually no resemblance to arbitration agreements as envisioned and protected by the FAA.” For employers, the decision provides important guidance. While arbitration remains a valuable tool, its enforceability depends on careful drafting. Key Takeaways for Employers Ensure True Independence of the Arbitral Forum The forum must be neutral and separate from the parties. Employers should avoid retaining unilateral control over the decision-maker or process. Define Clear Procedures Arbitration agreements should outline, at least in general terms, how disputes will proceed — such as rules governing selection of the arbitrator, discovery, and hearings. This can often be done by selecting JAMS, AAA, or another arbitration service. Avoid Unconscionability Procedural fairness matters. Discovery limitations, for example, must not prevent employees from effectively vindicating their statutory rights. As the Fourth Circuit noted in Stinger v. Fort Lincoln Cemetery, LLC, while limited discovery is inherent in arbitration, it cannot be so restrictive as to undermine those rights. Account for State Law Requirements In addition to federal law, state-level unconscionability standards can affect enforceability. Employers should ensure their agreements comply with applicable state law. Ultimately, while the FAA does much of the heavy lifting in enforcing arbitration agreements, the Flores case serves as a reminder that an agreement must actually provide for arbitration in both form and substance. Employers who take the time to draft fair, balanced, and clearly defined arbitration provisions will be best positioned to ensure their agreements are enforceable.
June 3, 2026
Mergers and Acquisitions
When the Deal Gets Personal: The Emotional Inflection Points of Selling a Business
Selling a business is largely viewed as a financial transaction shaped by valuation, structure, diligence, and closing. However, for founders and owners, selling a business is also an emotional journey that can be a highly stressful event. That stress can be compounded when a corporate attorney is brought in late in the process when many sellers have already experienced the early and most precarious stages of the deal. Many sellers work with an investment banker to take the company to market, vet buyers, and there may even be a letter of intent (LOI) on the table before an attorney is brought on board. While the seller feels they are making progress, from a legal and strategic standpoint, this early stage is where complexity and stress begin to escalate and legal counsel is critical. We have discussed the importance of bringing in legal counsel early in the process in multiple posts, and that cannot be emphasized enough. Below, we examine the most stressful components for sellers in any deal and how bringing in legal counsel early can help to ease the burden. Letter of Intent The LOI is one of the earliest inflection points in the deal process. Sellers often underestimate its significance because they see it as non-binding on economic terms. But this is a false sense of flexibility because exclusivity and time restrictions are binding. Once that LOI is signed, the seller is essentially off the market for a determined period and cannot engage in discussions with other interested buyers. This is where leverage begins to shift from the seller to the buyer. The buyer now has two things that are very valuable: time and access. On the other side, the seller is now increasingly invested, both financially and emotionally, in making the deal happen. It is now harder for the seller to walk away from the deal, even if circumstances change. Diligence The leverage shift becomes more pronounced when the deal enters the diligence stage. Buyers are highly disciplined as they approach this phase of the transaction, particularly when they are sophisticated financial sponsors. Diligence is not about buyers just confirming what they have been told, but rather testing assumptions, looking for weaknesses, and then recalibrating valuation based on their findings. It is common for buyers to reassess price or deal structure because of what is uncovered during diligence, and for sellers who entered the process with a clear expectation of value, that can be jarring. The business they have spent years or even decades building is now being evaluated through a different lens. Consistent Performance Another layer that multiplies the pressure on the seller is the expectation that the business continues to perform at the same level throughout the entire process. Entering negotiations to sell does not equate to a pause in operations. It is simply a process that runs parallel to day-to-day operations. Sellers must manage diligence requests, respond to buyer questions, and engage with all their advisors, all while effectively running the company. They cannot afford for performance to dip, even for reasons that have nothing to do with the transaction. That can lead to a reason for renegotiation, with buyers adjusting terms, implementing additional protections, or even revisiting the valuation entirely. This creates constant tension for the seller who is trying to execute the deal and simultaneously maintain the underlying business. Delayed Engagement of Legal Counsel When a seller brings in legal counsel later in the transaction, it can feel disruptive at first. This is because the job of an attorney is to identify and address risks, clarify what has already been agreed to, and ensure that the documents accurately reflect the intended deal. If they are not involved from the jump, they may have to revisit assumptions or unwind understandings that developed earlier in the process. This can feel like friction or a change in direction for sellers, and that can be avoided when counsel is engaged from the start. The issues become even greater when the buyer is a private equity (PE) firm. These repeat players operate with well-established playbooks and experienced deal teams. This is in stark contrast to a first-time seller who sees this as a once in a lifetime event. For a PE firm, this is just a routine transaction. The imbalance this creates can heighten the emotional stakes, particularly when discussing complex deal components. The Personal Dimension The personal dimension of the deal overlays everything. For a seller, their business represents years of work, relationships, and their identity. Their company is not just an asset they are selling; it is often their life’s work. Layer in concerns about their employees, customers, and their legacy, and the personal connection to the business complicates everything. Sellers often carry the weight of the transaction on their own, while they must continue to lead their company, One other very important reality for sellers is that the deal is not done until it is closed. It is easy to get excited and assume that signing an LOI or moving through the diligence process means the outcome is assured. But the truth is that transactions can, and do, change late in the process. Terms evolve, issues emerge, and sometimes, deals fall apart. It is critical to maintain perspective and discipline and attempt to put emotions to the side. The bottom line for sellers is that every transaction must be approached with preparation and support from the start to minimize the significant stress that comes with every stage. Bringing in skilled legal counsel very early in the process can alleviate that stress and help sellers to not only maximize value, but also bring clarity to the many complexities of a sale, resulting in a deal that truly reflects the seller’s goals.
June 1, 2026
Labor and Employment
"The Pitt" is a Hospital Drama. It’s Also a Masterclass in Employment Risk
Like most good TV hospital dramas, "The Pitt" is not really about medicine. It is about pressure. The show captures what happens when employees are overextended, managers are operating in constant crisis mode, and organizational systems begin to strain under the weight of staffing shortages, emotional exhaustion, and impossible expectations. The setting may be a hospital emergency department, but the legal issues are recognizable to virtually every employer. What makes the series especially interesting from a labor and employment perspective is how many of its workplace tensions intersect with real legal obligations. Take burnout. For years, employers treated burnout as a retention problem or a culture issue. Increasingly, however, burnout-related concerns arrive wrapped in legal protections. An employee struggling with anxiety, depression, PTSD, or other mental health conditions may trigger obligations under the ADA. Extended stress-related absences may implicate the FMLA. Complaints about chronic understaffing or unsafe workloads may become protected activity under workplace safety laws or the National Labor Relations Act. The law has not suddenly become more forgiving of operational strain simply because employers are understaffed. If anything, courts and agencies have become more skeptical of workplaces that normalize exhaustion as part of the job. "The Pitt" also illustrates a common but underappreciated source of liability: supervisors under pressure. Employment claims are often shaped less by formal policy and more by how frontline managers respond in moments of stress. A dismissive reaction to a complaint, inconsistent discipline, public criticism, or poorly handled accommodation requests can quickly become evidence in discrimination, retaliation, or hostile work environment litigation. Healthcare settings make this especially visible because the hierarchy is so compressed and the stakes are so immediate. But the broader lesson applies everywhere. Technical excellence is not the same as management training, and many organizations continue to promote high performers into supervisory roles without adequately preparing them for the legal dimensions of people management. The show also reflects the growing legal significance of employee complaints about workplace conditions. Discussions about staffing levels, scheduling, workload, safety, and compensation are often protected under Section 7 of the NLRA, even in non-union workplaces. Employers sometimes frame these issues as morale problems or negativity concerns when, legally, they may constitute protected concerted activity. That distinction matters. Particularly in high-pressure industries, retaliation claims increasingly emerge from situations where employees raised operational concerns, and management responded defensively. Another recurring theme in "The Pitt" is documentation — or, more accurately, the lack of it. In chaotic workplaces, documentation often becomes inconsistent until a complaint arises. By then, employers may attempt to reconstruct performance concerns after the fact, which rarely presents well in litigation. Courts, agencies, and juries tend to view sudden paper trails with suspicion, especially when they appear only after protected activity, leave requests, or accommodation discussions. Perhaps the most modern employment-law lesson embedded in the show is the importance of psychological safety. Employees who fear humiliation, retaliation, or professional consequences for speaking up are less likely to report concerns early, whether those concerns involve discrimination, harassment, or workplace safety. Regulators increasingly expect organizations to create reporting structures that employees actually trust enough to use. Ultimately, "The Pitt" works because it understands something many workplaces still resist acknowledging: prolonged crisis conditions reshape employment risk. Fatigue affects judgment. Stress alters communication. Staffing shortages expose compliance gaps. And cultures built around endurance rather than sustainability tend to create legal vulnerabilities long before litigation begins. The show may be fiction, but the workplace issues are painfully familiar. Just with better lighting and more trauma bays.
May 29, 2026
Business
Post-Close Alignment in Lower Middle Market M&A: Where Deal Stress Begins to Fracture
Most sellers and buyers in lower-middle-market M&A, including search funds, entrepreneurship through acquisition (ETA), and independent-sponsor transactions, begin to suffer from deal fatigue and welcome the post-closing phase of a business acquisition or M&A transaction. No more due diligence, no more negotiations, no more redlines. However, in many cases, the post-close phase is fertile ground for additional disputes to emerge. Most post-closing friction in lower-middle-market M&A deals is not caused by something that was absent from the deal. To the contrary, it is actually related to the negotiated documents governing the relationship between seller and buyer in the post-close transition phase. Consulting agreements, employment agreements, and corporate governance documents in rollover equity transactions seek to govern the relationship, but the relationship is still new in this phase. The parties are experiencing, for the first time, what it is like to work together after the change in dynamics (seller-owner to exited owner; buyer with funding to operator managing debt service and performance expectations). In this example, the seller rolled equity in the transaction and was now an equity holder in the buyer's platform company. The post-closing issues did not stem from a missing provision, but from ambiguities that existed across multiple documents that were meant to align and work together: seller notes, management agreements, and governance documents were all in play and created more confusion than clarity. That pattern is more common than most buyers expect, particularly in search fund, entrepreneurship through acquisition (ETA), and independent sponsor deals where post-close roles and governance tend to be more fluid. The LOI to Close Gap in M&A Transactions Most of these issues are not created at closing. They are created in the window between LOI and signing. At LOI, the parties align on high-level economics and general expectations: The seller will stay involved The business will transition smoothly Equity will keep everyone aligned in the case of rolled equity, or amounts due pursuant to the seller note will incentivize cooperation But those concepts get translated into separate documents depending on the deal: Employment agreement Consulting agreement Operating agreement Purchase agreement Each document answers a different question. Very few processes force those answers to be reconciled into a single operating model. That is where the gap forms. By the time you reach closing, the documents are “complete” but not always aligned. Where Post-Closing Issues Show Up in Business Acquisitions Employment Terms in Post-Closing Transition Buyers often assume that key individuals, particularly a selling owner transitioning into an operating role, will continue “as expected.” The employment agreement is where that expectation either becomes a reality or breaks down. The most common issues include: Role definition is too broad or not tied to actual authority Termination provisions do not reflect how performance issues will be handled Compensation structures do not match the deal model Example: A seller stays on post-close in a senior operating role (e.g., general manager) under a two-year agreement while the buyer installs its own CEO or operating partner. The buyer expects to reshape reporting lines and decision-making authority over time. The agreement, however, includes strong severance protections and defines material changes to duties or authority as “good reason.” Six months in, the buyer begins shifting responsibilities to its operating partner. The seller asserts “good reason” and triggers severance or other protections, despite the buyer viewing the changes as part of the planned transition. Nothing is technically wrong in the document. It just does not reflect how the buyer intended to transition control of the business. Consulting Roles and Transition Services Agreements Consulting arrangements are often treated as secondary or low-risk. In practice, they can drive real execution outcomes. This is especially true in customer transition and institutional knowledge transfer. Where this tends to go wrong: Scope of services is loosely defined Time commitment is not specified Compensation is not tied to outputs Example: A seller agrees to a 12-month consulting arrangement to support transition. The agreement references “reasonable availability” but does not define hours, deliverables, or response expectations. Post-close, the buyer expects active involvement in customer introductions and onboarding. The seller views the role as limited advisory support that can be provided from a remote location and not on-site. The result is predictable. The buyer feels unsupported. The seller believes they are complying with the agreement. Again, nothing is broken in isolation. The expectations were never aligned. Rolled Equity and Post-Close Governance Rolled equity is typically framed as a tool to align the parties in furtherance of a more profitable enterprise. In practice, it can be alignment in concept only, not in execution. Where this tends to go wrong: Different expectations around liquidity timing Limited clarity on governance rights Misunderstanding of distribution mechanics Example: A seller rolls 20% of proceeds into the new structure. The buyer plans to reinvest cash flow into growth and limit near-term distributions. The seller expects periodic cash flow similar to how they operated pre-sale. The operating agreement permits discretion on distributions, but the practical application of that discretion was never aligned. This is not a legal defect. It is an operating mismatch that surfaces quickly once capital allocation decisions begin. Why Post-Closing Misalignment Occurs in M&A Deals During the deal process, these items are negotiated in parallel: Purchase agreement Employment agreements Consulting agreements Equity and governance documents Each document may be internally consistent, but the following question should be asked: Do these documents, taken together, reflect how this business will actually be operated on day one? More specifically: Do they clearly define what the seller is required to do, what authority they retain or lose, how they are compensated for that role, and what happens if those expectations change or break down? If the answer to those questions is unclear, the issue is already embedded in the deal. Practical Considerations Pre-Close in Lower Middle Market Transactions This is almost always easier to address before closing than after. In practice, a strong lower-middle-market post-close package tends to do six things: Define the role with objective deliverables. Move beyond titles. Specify outputs, metrics, and decision rights that tie to how the business will actually be operated. Clearly classify the relationship. State whether the seller is an employee, consultant, or board-level advisor. Blurred status tends to create both operational and legal ambiguity. Precisely frame “cause” and “good reason.” If the buyer retains flexibility to change duties, reporting lines, compensation, or authority, that flexibility should be clearly bounded. Well-defined “cause” and “good reason” concepts are what translate flexibility into enforceable expectations. Separate consulting economics from deal economics. Consulting fees should stand on their own unless the parties intentionally link them to purchase price or earnout mechanics. Unintended overlap often creates disputes about what is being paid for performance versus transition support. Build explicit consequences for disruption. If authority is stripped or termination occurs outside the expected framework, the documents should address the outcome. That can include tolling, acceleration, deemed achievement, or extension concepts tied to equity or earnouts. Preserve a practical enforcement path. Rights are only useful if they can be exercised. Escrow access, information rights, expert determination procedures, and specific performance provisions tend to make these arrangements function in practice. Closing Thought on Post-Closing Risk and Deal Execution These are not technical refinements. They determine whether the post-close relationship functions when conditions change. Most post-closing issues do not come from a single broken provision. They come from small inconsistencies across multiple documents that were never forced to align into a single operating framework. If you are under LOI or in diligence, this is typically the window to fix that alignment without disrupting the deal. After closing, you are no longer interpreting intent; you are operating within the structure you drafted. If you are working through this in a live deal, step back and ask: Do these documents, collectively, dictate how decisions get made, how the seller participates, and how economics actually flow? If not, then the risk is not theoretical. It is already built into the deal.
May 29, 2026
Commercial Litigation
Prejudgment Asset Freezes: Where the Line Is Drawn
In these turbulent times, more and more creditors are pushing for prejudgment asset freezes and restraints. Recent decisions in New York and Florida illustrate when that is possible. A district court in New York was reversed when it granted a preliminary injunction against the assets of guarantors who did not give the creditors any security interest. Interestingly, a bankruptcy court in Florida gave a plan trustee an injunction in a fraudulent conveyance action. The U.S. Supreme Court’s decision in Grupo Mexicano is the common theme. Grupo Mexicano de Desarrollo, S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308 (1999). Grupo Mexicano is considered a departure from practice in the U.K. courts, which issue the so-called Mareva injunctions prohibiting defendants from transferring assets before judgment. See Mareva Compania Naviera S. A. v. International Bulkcarriers S. A., 1 All E.R. 213 (1980). Grupo Mexicano stands for the proposition that an unsecured creditor has no rights, at law or in equity, in the property of his debtor before judgment. New York (Leadenhall v. Advantage Capital – 2d Cir.) The Second Circuit Court of Appeals confirmed that where a creditor has no rights in a debtor’s assets, neither law nor equity shall operate to grant such rights prejudgment, and reversed, as an abuse of discretion, the District Court’s grant of a preliminary injunction against the assets of guarantors. The lenders extended a secured loan to borrower entities and obtained comprehensive collateral from the borrowers, but only unsecured guarantees from affiliated guarantors who pledged no assets. After discovering alleged fraud and default and accelerating roughly $600 million in debt, the lenders sued for breach of contract, fraud, and RICO, and sought to freeze both borrower and guarantor assets prejudgment, based on fears of dissipation. The district court granted the injunction, but the Second Circuit reversed because, as to the guarantors, the lenders asserted only legal claims for money damages, identified no specific property, and held no lien or equitable interest in guarantor assets. Those facts placed the case squarely within Grupo Mexicano. An unsecured creditor with a legal damages claim cannot restrain a defendant’s general assets before judgment, even where dissipation is likely. The absence of any pledged collateral, traceable res, or equitable remedy (such as restitution of specific property) was dispositive. Florida (Vital Pharmaceuticals – Bankr. S.D. Fla.) In a recent decision, Judge Russin held that Grupo Mexicano was inapplicable in a case arising from the bankruptcy of Vital Pharmaceuticals, which was forced into bankruptcy after losing a false advertising lawsuit brought by its competitor, Monster Energy. The debtor’s CEO, while the company faced massive and mounting litigation exposure, caused the company to transfer nearly $10 million of corporate funds to purchase and maintain a specific luxury property titled in a shell entity he controlled, with no consideration flowing back to the company. The transfers occurred as the company was allegedly insolvent or rendered insolvent, and while facing hundreds of millions of dollars in contingent liabilities. After confirmation of a liquidating plan, the trustee brought fraudulent transfer claims seeking to recover that specific real property (or its value), and moved to enjoin further encumbrance or transfer. Critically, the trustee traced estate funds directly into an identifiable res (the property) and pursued equitable relief, avoidance, and recovery of the property itself, not merely money damages. The court granted the preliminary injunction, holding that Grupo Mexicano did not apply because the action fit within the traditional equitable exception. It was an equitable fraudulent-conveyance claim targeting specific property, where the injunction served to preserve the res pending adjudication. The strong factual showing of insider transfers, lack of value, insolvency, and pending litigation exposure further supported both the likelihood of success and the need to prevent dissipation. The recent decisions underscore that Grupo Mexicano remains a firm constraint on prejudgment asset freezes in the United States: unsecured creditors pursuing legal claims for money damages cannot restrain a defendant’s general assets absent a recognized equitable interest. At the same time, courts will grant such relief where the plaintiff can anchor its claim in equity by tracing funds to a specific, identifiable res and seeking recovery of that property. Ultimately, the outcome determinative factors are not urgency or risk of dissipation, but whether the creditors can tie their claim to an identifiable asset or equitable remedy.
May 28, 2026
Title IX and Education
Campus Title IX Hearings: This Isn’t a “Court of Law" but Your Words May Still Have Legal Consequences
Title IX hearings are administrative, educational proceedings designed to address student reports of sexual harassment on campus. They are not intended to simulate a “court of law” and are not held to the same evidentiary or legal standards one can expect from a traditional legal proceeding. Although campus Title IX proceedings are not legal proceedings, students should still be wary of what they say during the process and beyond. While their statements during the campus Title IX process are likely privileged, absolute immunity may not apply to insulate students from defamation liability. Additionally, what students say outside the campus Title IX process is not privileged at all and may carry significant legal consequences. As Title IX matters increasingly intersect with defamation, understanding this overlap is critical. Consider a common scenario: a student is accused of sexual misconduct following an encounter where both parties had been drinking. The accused student believed the interaction was consensual but soon found themselves the subject of rumors spreading across campus, including being labeled a “rapist.” What begins as a private dispute quickly escalates into widespread reputational harm. The accused student experiences social isolation, is asked to step down from organizations, and sees their academic performance decline. Seeking relief, the accused student turns to the university, but institutional responses are often limited. Defamation Basics and Why Title IX Makes Things Complicated The majority of Title IX matters are “he said, she said” situations and often involve competing narratives of what took place during the parties’ encounter. When one party publicly shares their perspective with others, it can sometimes lead to premature conclusions about the other party that have long-lasting and stigmatizing effects. This is where Title IX intersects with the concept of defamation. To establish a defamation claim, a plaintiff must generally show that a false statement of fact was made about them, published to a third party, and caused reputational harm, all without the protection of a legal defense or privilege. However, not every harmful or offensive statement is subject to defamation liability. Opinions and statements made in good faith during the campus Title IX process may fall outside the scope of defamation. In the Title IX context, the line becomes blurred, particularly when statements about another student spread beyond the formal process. Privilege, Immunity, and the Limits of Protection Even when statements are later proven false, they may be protected by privilege if they were made during the Title IX proceeding. In some jurisdictions, a Title IX proceeding qualifies as a “quasi-judicial” proceeding. Certain communications made in quasi-judicial or administrative settings may be shielded from defamation claims, but these protections are not absolute. In fact, very few jurisdictions provide absolute immunity to statements made during the Title IX process. Sometimes, statements are only cloaked by a qualified privilege, which means the speaker must still prove that the statements at issue were made in good faith before the privilege applies. Courts have increasingly been asked to evaluate how these principles apply in university disciplinary proceedings, underscoring the legal complexity surrounding campus speech. How Courts Are Treating Title IX Statements After the Fact As courts begin to weigh in, it has become clear that what is said during a Title IX proceeding, and how those statements are later treated, can have consequences that extend far beyond campus. In Khan v. Yale University and Le v. University of Medicine and Dentistry, the court focused on what happened inside the Title IX process itself. In Khan, the Connecticut Supreme Court concluded that Yale’s Title IX disciplinary process did not function enough like a courtroom to give participants absolute immunity from defamation claims. While the court acknowledged the importance of encouraging students to report sexual misconduct, it held that knowingly false or malicious statements made during the process could still lead to liability. Together, these cases show that statements made during campus disciplinary proceedings may not always be fully protected and can later become the subject of litigation. Statements Outside Title IX Proceedings and Resulting Liability What happens outside of a Title IX proceeding can be just as significant. In Pampu v. Wingo, the defamatory statements at issue were made by two Clemson students outside of the Title IX process. As a result, the statements were not protected by absolute immunity or qualified privilege at all. After a week-long trial examining testimony from five eyewitnesses, the plaintiff and three co-defendants, a twelve-member jury unanimously found the Clemson students liable for defamation and civil conspiracy and awarded Pampu $5.3 million dollars in compensatory and punitive damages1. While the matter is on appeal for reasons unrelated to immunity or privilege, the lesson from Pampu is clear: what a student says about another student can cause lifelong damage and may lead to significant legal liability if a jury determines those statements are untrue. Universities are operating in an increasingly challenging environment. Recent campus controversies involving protests, disciplinary actions, and speech restrictions have heightened the scrutiny of institutional decision-making. Schools must balance competing obligations under Title IX, free speech principles, and due process requirements, often under intense public and legal pressure. In doing so, universities are tasked with protecting the rights, safety, and educational access of all parties, while also managing the reputational and interpersonal fallout that can accompany allegations of misconduct. Ultimately, while a Title IX proceeding may not be a legal proceeding, they are far from consequence-free. What you say about someone during a Title IX proceeding should not be taken lightly and should only be made in good faith. Allegations, responses, witness accounts, and investigative findings can have lasting academic, professional, emotional, and reputational effects, sometimes extending well beyond campus. The safest approach is to treat every statement as if it could matter later, because it very well might. 1See Kimberly Lau Representative Matters, second bullet point
May 27, 2026
Real Estate
Why Delaware Legal Opinions Matter – Part 2: What Delaware Opinions Actually Cover
Welcome to Why Delaware Legal Opinions Matter, a five-part series examining the role of Delaware legal opinions in transactional practice. In this series, you will learn about the scope and purpose of these opinions, the circumstances in which they are required in real-world transactions, how lenders rely on them in real estate finance deals, and practical strategies for obtaining them efficiently without closing delays. For many transactional attorneys and business professionals, the phrase “Delaware opinion” sounds broader and more comprehensive than it actually is. In reality, the Delaware opinion serves a focused and highly specialized role: providing opinions on discrete issues of Delaware law relating to Delaware entities involved in the transaction. Most Delaware opinions address core legal issues such as: The valid existence and good standing of a Delaware entity The entity’s power and authority to enter into the transaction Due authorization, execution, and delivery of the transaction documents Enforceability of the applicable transaction documents against the Delaware entity[1] In certain transactions, perfection or UCC-related matters governed by Delaware law Importantly, the Delaware opinion generally does not address the entire transaction. The opinion does not typically cover the laws of the state where the real estate is located, the economic substance of the transaction, regulatory compliance outside Delaware, or the business terms negotiated by the parties. Instead, the Delaware opinion provides lenders, investors, and transaction parties with comfort that the Delaware entity itself has been properly formed, authorized, and bound under Delaware law. This distinction matters because modern transactions frequently involve multiple jurisdictions and multiple layers of counsel. For example, a real estate financing transaction involving a property in Texas will require a Delaware opinion because the borrower or guarantor is organized as a Delaware LLC. Similarly, an acquisition governed primarily by New York law will require a Delaware opinion because a holding company or acquisition vehicle was formed in Delaware. In these transactions, Delaware opinion counsel operates as part of a coordinated closing team alongside lead transaction counsel, local real estate counsel, borrower’s counsel, and lender’s counsel. The role is specialized but often critical to closing the deal efficiently. Experienced Delaware opinion counsel also helps avoid one of the most common causes of closing delays: opinion requests that are overbroad, inconsistent with customary practice, or disconnected from the actual structure of the transaction. Because Delaware opinion work is highly practice-driven, understanding customary limitations, assumptions, qualifications, and opinion scope is just as important as understanding the Delaware statutes themselves. When handled efficiently, Delaware opinions become a streamlined component of the closing process rather than a last-minute obstacle. [1] An opinion regarding the enforceability of transaction documents against a Delaware entity is limited to the enforceability of such documents against that Delaware entity under Delaware law and should not be interpreted as a general enforceability opinion regarding the transaction documents as a whole or under the laws of any other jurisdiction.
May 20, 2026
Labor and Employment
Beyond Attendance: The Legal Duties of Nonprofit Board Members
Serving as an officer or director of a nonprofit organization is both an honor and a serious legal responsibility. Whether your organization is a large regional association or a small community-based nonprofit, the individuals who sit on the board are held to defined legal standards — standards that exist to protect the organization, its members, and the public it serves. This article outlines the core governance obligations that apply to every nonprofit board member, including the three fiduciary duties imposed by state law, the board’s proper role in organizational management, and several practical obligations that are easy to overlook but carry real legal consequences. Modern Governance Demands Active, Informed Leadership Nonprofits today operate in an environment of heightened public scrutiny, legal complexity, and accountability. The days when a board member could fulfill his or her obligations simply by showing up for quarterly meetings and voting on motions are long past. Effective governance now requires directors to be proactive, to engage with the organization between formal meetings, to participate meaningfully in leadership transitions, and to approach every board communication and decision with deliberation. Passive participation is not just ineffective; it can be a legal liability. A director who sits back, defers entirely to others, and casts uninformed votes risks violating the very duties assumed upon joining the board. The Board Governs — It Does Not Manage One of the most important distinctions in nonprofit governance is the line between policy and management. The board of directors is the organization’s governing body, with ultimate responsibility for its mission and direction. But that responsibility does not extend to the day-to-day administration of the organization. Operational decisions —staffing, program delivery, vendor relationships, and the like — are properly delegated to paid staff, designated committees, or empowered officers. This principle holds even for smaller nonprofits that lack a professional staff. The board’s role is to set policy and ensure that results align with the organization’s mission and governing documents. When boards stray into micromanagement, they create confusion, undermine staff authority, and expose themselves to unnecessary risk. The best boards define clear boundaries, delegate appropriately, and hold leadership accountable for outcomes. The Three Fiduciary Duties State law imposes three legally enforceable fiduciary duties on every officer and director of a nonprofit organization: the duty of care, the duty of loyalty, and the duty of obedience. These duties are not optional — they cannot be waived by agreement, and they apply regardless of whether the organization is large or small, well-funded or volunteer-run. Every decision made in the course of board service should be evaluated against all three. Duty of Care: Be Informed and Engaged The duty of care requires directors to exercise the same ordinary and reasonable diligence that a prudent person would apply in similar circumstances. In practice, this means directors must arrive at meetings prepared, ask questions when something is unclear, seek out information independently when necessary, and engage substantively in board deliberations. A director who attends meetings without reviewing materials in advance, who relies entirely on the representations of other board members without independent inquiry, or who votes yes or no simply to go along with the room is not meeting this standard. The duty of care is an individual obligation; each director is personally responsible for being informed. Duty of Loyalty: Put the Organization First The duty of loyalty requires that when a director acts in his or her capacity as a board member, that director’s allegiance must be undivided and directed entirely to the organization’s interests. Personal interests, outside business relationships, and affiliations with other organizations must not influence board decisions. This duty encompasses two related obligations. First, directors must avoid actual conflicts of interest — situations in which personal gain could be derived from an organizational decision. Second, and equally important, directors must avoid even the appearance of conflicts of interest. The credibility of a nonprofit depends in large part on public trust, and that trust is damaged when there is any reasonable basis for questioning whether a board member’s decisions were made for the right reasons. Organizations should have a written conflict-of-interest policy, and directors should be prepared to disclose and recuse themselves where appropriate. Duty of Obedience: Know and Follow Your Governing Documents The duty of obedience requires directors to act in accordance with the organization’s articles of incorporation, bylaws, mission statement, and any other governing documents, as well as applicable federal, state, and local law. This is not a passive obligation. Directors are expected to have read and understood the organization’s governing documents, and to act consistently with them, even when a director might personally have approached a matter differently. If governing documents are outdated, unclear, or inconsistent with current law, the appropriate response is to pursue a proper amendment, not to ignore the documents or work around them. Counsel can assist with reviewing and updating governing documents to ensure they reflect the organization’s current operations and legal obligations. Additional Obligations Individual Accountability for Fellow Directors’ Conduct Board membership is not a passive credential. Directors have an individual obligation to respond when they become aware that a fellow director, or an officer, is engaging in conduct that is illegal, in violation of fiduciary duties, or otherwise contrary to the organization’s interests. Awareness without action can itself give rise to personal liability. What constitutes an adequate response will depend on the circumstances, but in serious cases it may require raising the issue formally at a board meeting, consulting with legal counsel, or escalating the matter through appropriate channels. Directors who simply look away when misconduct is apparent do so at their own legal risk. Confidentiality: An Absolute Obligation Board deliberations are confidential. Information discussed in the course of board business — whether in formal meetings or in communications among directors — may not be shared with individuals who are not part of the board or otherwise properly within the organization’s governance structure. This obligation applies regardless of how a vote came out and regardless of whether the director agreed with the board’s decision. The reason for this rule is practical as well as legal. Open and candid board discussion depends on the mutual understanding that what is said in the boardroom stays there. When confidentiality is breached, even informally, even with good intentions, it chills future deliberation and can seriously damage the organization. Directors should treat all board communications as confidential by default, and should decline to discuss board matters with family members, professional colleagues, or anyone else outside the governance structure. Written Communications: Assume Everything Is Public In litigation and regulatory proceedings, written communications are among the first materials sought in discovery which includes emails, text messages, board messaging platforms, and any other written communication, regardless of how informal the channel. There is, in practical terms, no such thing as a private electronic communication for a nonprofit director. Directors should bring the same care to their written communications that they bring to formal board proceedings. This means avoiding emotional or inflammatory language, refraining from personal attacks, and thinking carefully before committing anything to writing that would be embarrassing, misleading, or legally problematic if it later appeared in a courtroom or regulatory hearing. When in doubt, a phone call is often the better choice. And when written communication is particularly sensitive, having it reviewed by counsel before sending is a worthwhile precaution. Nonprofit Directors Are Accountable to the Public Unlike the directors of a for-profit corporation, who owe their primary duty to shareholders, nonprofit directors operate in a context of broader public accountability. The tax-exempt status and public-benefit mission of a nonprofit organization mean that its governance is, in a meaningful sense, a matter of public interest. This is the foundation of many of the rules that apply to nonprofits and their directors, and it is why the standards for nonprofit governance are taken seriously by regulators, courts, and the communities these organizations serve. Directors who internalize this principle — who understand that their role is not simply to serve the membership but to advance a mission for the broader public good — tend to govern more effectively and with greater integrity. A Final Word The legal obligations of nonprofit board service are real, and they apply from the moment a director takes office. But they are not burdensome for directors who approach the role with the seriousness it deserves. Directors who stay informed, act in the organization’s best interest, follow the governing documents, communicate carefully, and hold themselves and their colleagues accountable will, in virtually every case, meet their legal obligations and serve their organization well.
May 20, 2026
Business
Virginia Reshapes Franchising with Ban on Post-Term Non-Competes
Franchisors with Virginia locations should prepare to revise their franchise agreements and Virginia-specific disclosure materials. Beginning July 1, 2026, Virginia law will prohibit most post-termination non-compete provisions in covered franchise agreements and will require those agreements to be governed by Virginia law. For franchisees, the amendments create greater post-exit flexibility and reduce the ability of franchisors to rely on out-of-state governing-law clauses to avoid Virginia’s statutory protections. The practical message is straightforward: franchisors should review Virginia-facing templates, renewal and amendment practices, confidentiality and trade secret protections, and enforcement strategies well before making any new offer, sale, renewal, extension, or amendment for a Virginia location on or after the effective date. Implications for Virginia Franchisors and Franchisees These changes matter immediately for drafting and compliance. A franchisor that continues to use a standard national form for Virginia deals without modification risks including provisions that will no longer be permitted once the new law takes effect. Agreements entered into before July 1, 2026, are not automatically displaced, but renewals, extensions, and amendments on or after that date may trigger the new requirements, making it especially important to review not only new-deal documents but also legacy agreements that may soon come back into circulation. Public commentary following the legislation has also noted guidance issued on April 14, 2026, by the Virginia State Corporation Commission’s Division of Securities and Retail Franchising regarding updates to franchise disclosure materials and Virginia addenda, underscoring that compliance will require attention not just to contracts but also to disclosure practice. How Virginia’s New Franchise Non-Compete Law Affects Franchise Agreements The amendments to Virginia’s Retail Franchising Act, enacted through House Bill 69 and the companion Senate Bill 240, apply to franchises that require or contemplate a place of business in Virginia, a concept broad enough to reach more than traditional brick-and-mortar outlets and potentially many service concepts operating in the Commonwealth. Effective July 1, 2026, the law makes it unlawful to offer or enter into a covered franchise agreement that restricts the franchisee’s right to engage in the business of offering, selling, or distributing goods or services at retail after termination or expiration of the franchise agreement. Just as significantly, covered franchise agreements must now be governed by Virginia law, preventing franchisors from selecting another state’s law in an effort to sidestep Virginia’s franchisee protections. Virginia Franchise Non-Compete Exceptions The statute includes a narrow exception when a franchisee voluntarily sells the franchise at a mutually agreed price, whether to a third party or back to the franchisor. In that setting, the franchisor or the buyer may require the selling franchisee to agree to a non-compete that is binding for up to two years after the sale. Outside that sale context, however, post-term non-compete restrictions in covered Virginia franchise agreements are no longer permitted. The law is also expressly prospective: contracts entered into, extended, or modified on or before June 30, 2026, remain unaffected, but activity on or after July 1, 2026, may bring an agreement within the amended statute’s reach. The Business Impact of Virginia’s Franchise Non-Compete Ban and Compliance Steps for Franchisors Taken together, the amendments materially rebalance franchise relationships for Virginia locations in favor of franchisees by eliminating most post-termination non-competes and requiring Virginia law to govern covered agreements. That governing-law requirement may prove especially consequential, because it reduces the usefulness of contract provisions that previously might have directed disputes toward more franchisor-friendly legal standards. It also means that franchisors evaluating renewals, transfers, terminations, and system enforcement in Virginia will need to assess those decisions against Virginia’s franchise-specific statutory framework. For franchisors, the likely response will be to strengthen other forms of system protection that do not depend on a post-term non-compete. Confidentiality provisions, trade secret controls, non-solicitation language where appropriate, access limits on customer data, tighter operational safeguards, and clearer brand-transition requirements may all take on greater importance. The statute does not prevent a franchisor from pursuing monetary remedies when a franchisee breaches contractual obligations during the term, so careful drafting around in-term defaults, de-branding obligations, liquidated damages, and post-termination transition steps may become more important than ever. The new law may also influence how franchisors think about renewal rights in Virginia. If a former franchisee cannot be restricted from competing after expiration in most circumstances, franchisors may revisit whether renewal should remain automatic or broadly available, and whether Virginia-specific renewal provisions should be adjusted to reflect the changed competitive landscape. For franchisees, by contrast, the law creates additional bargaining leverage and a more realistic ability to continue in business after the franchise relationship ends, provided they do so without violating enforceable contractual duties that survive termination. More broadly, Virginia’s action may be an early indication of where franchise regulation is heading in other jurisdictions. Franchisors operating nationally may therefore want to treat these amendments not as an isolated state-law issue, but as a signal to review their broader contract architecture and protective covenants across the system. For now, however, the immediate takeaway is clear: any franchisor with Virginia-facing agreements or pending registration materials should act promptly to align its documents, disclosures, and operational protections with the Commonwealth’s new rules before July 1, 2026.
May 18, 2026
Intellectual Property
Prelaunch Trademark Risk: What In‑House Counsel Should Address Before Product Launch
Most trademark problems do not begin with a refusal from the USPTO or a cease-and-desist letter from a competitor. They begin much earlier during product development and brand naming, often before legal is meaningfully involved. For in-house counsel, pre-launch trademark risk is less about technical doctrine and more about process. Decisions made under time constraints, reliance on incomplete clearance signals, selection of legally weak brands, and launching without a filing strategy all narrow options later and increase the cost of correction. The companies that encounter the most difficult trademark issues are rarely careless. They move quickly, assume issues can be addressed later and underestimate how much momentum limits flexibility once a product is public. This article outlines the most common pre-launch trademark mistakes and explains how in-house counsel can reduce risk without slowing down the business. Trademark Risk Begins Before Legal Engagement Most trademark issues do not originate with the USPTO. They originate months earlier, often before an application is filed and before legal is formally engaged. From an in-house perspective, this distinction matters. When disputes, launch delays, or rebrands arise, the underlying issue is rarely legal uncertainty. More often, it is the result of early decisions made quickly and without a clear understanding of how difficult it will be to unwind later. Product launches compress timelines and concentrate risk. Naming decisions intersect with marketing, product design, domain strategy, packaging, investor communications, and customer-facing materials. Once those elements begin to align around a particular name, even modest legal concerns can feel disruptive rather than protective. By the time a trademark issue surfaces, legal’s role often shifts from risk management to damage control. The objective of pre-launch trademark oversight is not to prevent launches. It is to ensure that risk is identified early enough that the business still has meaningful choices. Naming Is a Business Decision with Legal Consequences Brand naming is often treated as a creative exercise. Teams generate options under tight timelines. Internal alignment forms quickly around a preferred name. That name begins appearing in materials across the organization. By the time legal is consulted, the decision may feel effectively final. The risk is not creativity. It is commitment before clearance. From an in-house standpoint, the most effective intervention is not controlling the naming process but setting expectations. No name is final until trademark risk has been evaluated. That evaluation does not always need to be exhaustive. In many cases, a high-level assessment is sufficient to identify obvious conflicts or structural weaknesses. When legal review is positioned as a standard step rather than an exception, teams are less likely to treat it as an obstacle. Over time, this reframes trademark review as part of launch planning, not a last-minute hurdle. Superficial Clearance Signals Create False Confidence Teams often rely on informal indicators to assess trademark risk, especially under time limitations: a domain is available, a state entity search is clean, a quick internet search shows no obvious conflicts. These signals can create a strong sense of comfort. The problem is that trademark risk does not turn on identical names or identical industries. It turns on the likelihood of confusion, a fact-specific analysis that considers the relationship between goods or services, channels of trade, and overall commercial impression. Those considerations rarely surface through informal searches. From a general counsel perspective, the issue is not that teams perform preliminary checks. It is when those checks are treated as conclusions rather than inputs. When “nothing obvious came up” becomes “this is safe,” the business begins investing in a name based on assumptions that may not hold. Early legal review recalibrates that assumption. It identifies where uncertainty exists and provides context for evaluating risk before additional resources are committed. Clearance Does Not Equal Strength Even when a name clears existing rights, it may still be a poor trademark. Descriptive or highly suggestive names are often attractive because they communicate product features quickly. From a legal standpoint, however, these marks tend to offer limited exclusivity and are more difficult to enforce. This distinction is often overlooked. Many weak marks can be registered. Registration alone does not ensure meaningful protection. In-house counsel plays an important role in distinguishing between registrability and strength. A mark that technically clears may still leave the company exposed to competitors operating nearby in the market. Over time, that exposure can lead to inconsistent enforcement and frustration when legal remedies do not align with business expectations. Framing trademarks as strategic assets rather than filing exercises helps align naming decisions with long-term differentiation. Launching Without a Filing Strategy Narrows Options Speed to market is a legitimate business priority. So is trademark priority. Companies often launch products without deciding which marks warrant protection, how consistently the brand will be used, or how it may expand across products, services or jurisdictions. In some cases, filing decisions are deferred simply because they have not been considered. Once public use begins, options narrow. Changes become more visible and course correction becomes more difficult. Strategy becomes reactive rather than intentional. From an in-house perspective, early planning does not need to be complex. Even a limited pre-launch discussion can clarify key questions: Which names are central to the business, and which are experimental? Is the mark likely to expand beyond a single product? Are international markets realistically in scope? Addressing these questions early preserves flexibility for enforcement, expansion and future transactions. “We’ll Fix It Later” Is Rarely a Strategy A common assumption is that trademark issues can be addressed after launch. Sometimes they can. Often, they cannot. Rebrands are expensive. Enforcement leverage weakens over time. International expansion frequently exposes conflicts that were not apparent at launch. What initially appears to be a manageable legal issue can become a broader commercial problem. By the time the issue is clear, the available options are typically narrower and more costly. Legal solutions may feel misaligned with business momentum. In-house counsel does not need to control naming decisions. They do need to normalize early involvement, set expectations around clearance, and ensure that trademark decisions align with long-term business objectives. Trademark Risk Is a Process Issue Most preventable trademark risks arise before legal engagement. It stems from timing, assumptions, and informal decision-making, not from misunderstanding the law. For general counsel, the opportunity lies in process. Clear expectations around when legal is consulted, how preliminary clearance is interpreted, and when filing strategy is addressed can significantly reduce risk without slowing the business. When trademark considerations are integrated into launch planning early, legal’s role shifts from reacting to problems to shaping outcomes. That shift preserves flexibility, reduces surprises, and allows trademark protection to support business growth. The objective is not perfection. It is awareness, alignment, and control at the point when decisions are still flexible.
May 14, 2026
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