Business
Maryland Franchise Reform Act Passes
The Maryland General Assembly has enacted, by overwhelming majorities, the Franchise Reform Act (Senate Bill 415 & House Bill 730), marking the first significant changes to the Maryland Franchise Registration & Disclosure Law (the “Maryland Franchise Law”) since its enactment in 1981. Governor Moore is expected to sign the legislation into law shortly, and it will become effective on October 1, 2026. The House sponsor and primary driver of the legislation, Delegate Marc Korman, introduced the bill resulting from numerous constituents who had raised concerns about the franchise registration process in Maryland, concerns shared by franchisors nationwide. However, while part of the law will encourage streamlining the Maryland franchise sales registration process, it also provides changes that will be helpful to Maryland franchisees and Maryland-based franchisors. Having focused my practice on franchise law in Maryland for more than 25 years, I was privileged to be asked by Delegate Korman to work closely with him and his staff on the drafting and revising of the legislation, which included conducting workgroup focus meetings with members of the Maryland State Bar Association (“MSBA”) to gather feedback, and testifying on behalf of the MSBA in favor of the legislation multiple times throughout 2025 and 2026. The Maryland Franchise Law protects people considering the purchase of a franchise from being misled or under-informed when deciding whether to buy. The law requires franchisors to prepare a prospectus (called a “Franchise Disclosure Document” or an “FDD”) detailing a wide variety of information and submit it to the Securities Commissioner, who is an officer with the Maryland Office of the Attorney General (the “OAG”), and obtain that agency’s approval to sell franchises in Maryland. That approval, called registration, must be renewed each year in which the franchisor continues to sell franchises to Maryland residents or for the operation of the franchised business in Maryland (collectively, “Maryland Franchises”). Until now, the law has solely addressed the franchise sales process, rather than the ongoing relationship between the franchisor and the franchisee. The Maryland Franchise Reform Act does the following: For the Benefit of Franchisors Generally Following the bill’s initial introduction and passage by the House of Delegates during the 2025 session, the Securities Commissioner established a pilot program intended to expedite franchise registration renewals. The approved law requires the Securities Commissioner to continue the pilot program and to report to the legislature in 2031 on the program’s results, as well providing data on other aspects of the registration process, and an analysis of how Maryland’s exemptions from registration for experienced franchisors compares with those of other states that require registration before sale of a franchise. For the Benefit of Maryland Franchisors The law limits private parties who can sue a franchisor for violation of the Maryland Franchise Law solely to Maryland franchisees. This will eliminate the ability of out-of-state franchisees to use the statute as a weapon in disputes with franchisors that are or were headquartered in Maryland, which has been a deterrent to franchising from Maryland as compared to nearby states. For the Benefit of Franchisees Consistent with the Maryland Franchise Law’s purpose, parts of the law will benefit franchisees. Specifically: For the first time, the Maryland Franchise Law addresses the imbalance of power between franchisees and franchisors within the ongoing relationship, by prohibiting a franchisor from restricting or inhibiting Maryland franchisees from associating with other franchisees within their brand for the franchisees’ common benefit “for any lawful purpose” — which could include collectively raising grievances with the franchisor for the franchisees’ mutual benefit. Maryland franchisees will have the right to sue in Maryland courts for injunctive relief and damage suffered, if the franchisor violates this prohibition. This provision is similar to “free association” laws passed in several other states, including California and Illinois. The time during which a franchisee may bring a private claim for violation of the law’s registration or disclosure provisions has changed in a manner that benefits certain franchisees. Franchisees will now have until the earlier of four years from buying the franchise rights or two years after the date the franchise opened to the public. The limitations period was three years from the date the franchise rights were purchased, regardless of when the franchised business opened. The advantage will be for retail franchises that often take two years or more from buying the franchise to open due to challenges in securing an acceptable site and constructing the franchise, since those owners then will have time after opening to determine the viability of their investment and whether the franchisor violated the Maryland Franchise Law in selling the franchise. For franchises that open within a short time of purchasing the rights, the judgment of the MSBA and the legislature was that two years from opening is sufficient for a franchisee to make that determination and commence a lawsuit.
April 30, 2026
Bankruptcy
From Purdue to Pat McGrath: Are Opt-Out Third-Party Releases Truly Consensual?
Judge Laurel Isicoff’s April 21, 2026, decision confirming the Chapter 11 plan of Pat McGrath Cosmetics LLC answers in the affirmative the question left open by Harrington v. Purdue Pharma: whether third‑party releases imposed through an opt‑out mechanism can be truly consensual. Once valued at more than $1 billion following a 2018 private‑equity investment, the company struggled with chronic inventory shortages and mounting debt, ultimately filing for Chapter 11 in January 2026 to restructure its capital stack and preserve the brand’s core value. Emphasizing that Purdue addressed only nonconsensual third‑party releases and expressly left open the legality of consensual releases, the court held that an opt‑out mechanism may constitute consent where creditors receive clear, conspicuous notice, understand the consequences of inaction, and are afforded a meaningful opportunity to decline the release. Drawing analogies to class actions and core bankruptcy voting rules, the court emphasized that the Bankruptcy Code routinely binds parties based on inaction after adequate notice, and that Purdue deliberately declined to define the contours of “consent.” Creditors who voted to reject the plan, or were deemed to reject, could not be bound absent affirmative consent—underscoring that opt‑out is not a one‑size‑fits‑all solution. The question of whether opt-out releases are consensual is soon going to be reviewed at the Circuit level. In the Second Circuit, Chief Bankruptcy Judge Carl L. Bucki of the Western District of New York found that opt‑out releases are not consensual and therefore prohibited by Purdue. In re Diocese of Buffalo, N.Y., 2026 WL 585099 (Bankr. W.D.N.Y. Feb. 27, 2026). Recognizing the absence of a controlling authority and the issue’s “public importance,” Judge Bucki certified a direct appeal to the Second Circuit under 28 U.S.C. § 158(d)(2), explicitly citing the growing inter‑ and intra‑circuit split. At the end of 2025, District Judge Denise Cote of the Southern District of New York reversed confirmation of an opt‑out plan, holding that the ability to opt out does not itself establish consent to release claims against non-debtors in In re GOL Linhas Aéreas Inteligentes S.A.,675 B.R. 125 (S.D.N.Y. Dec. 1, 2025). The GOL debtor has appealed, with briefing now headed to the Second Circuit. Meanwhile, the Fifth Circuit is confronting the same question from the opposite direction. In Container Store, District Judge Lee Rosenthal upheld confirmation of an opt‑out plan, concluding that the opportunity to opt out rendered the releases consensual and therefore permissible after Purdue. 676 B.R. 356 (S.D. Tex. Feb. 12, 2026). The U.S. Trustee appealed on April 10, teeing up appellate review. The Path McGrath decision adds momentum to a growing body of post‑Purdue case law confirming that consensual third‑party releases remain viable and that opt‑out mechanisms, when properly structured, can satisfy both due process and the Bankruptcy Code. Whether opt-out releases will remain viable is a question now destined for the Second Circuit and Fifth Circuit, and possibly back to the Supreme Court itself.
April 28, 2026
Commercial Litigation
Virginia Moves to Further Restrict Non-Compete Agreements
Virginia continues to restrict non‑compete covenants. On April 13, 2026, Governor Spanberger signed Senate Bill 170 (“SB 170”) SB170 - 2026 Regular Session | LIS, into law. SB 170 will materially limit the enforceability of non‑compete agreements in Virginia moving forward. For years, Virginia courts enforced narrowly tailored non‑compete agreements, and employers adopted non-competes across industries as a risk‑management tool. As of July 1, 2026, any company or employer doing business in Virginia should reexamine the use of non- competes. In many cases, it will no longer make economic or operational sense to use non-compete provisions. Under amended Virginia Code § 40.1‑28.7:8, a non‑compete becomes unenforceable if an employee is terminated without cause and the employer has not provided severance or other disclosed monetary compensation. This rule applies to all employees, regardless of seniority, compensation level, or role. Importantly, the law will not be retroactive, meaning that non-compete agreements in effect, and unmodified, before July 1, 2026, will remain enforceable. For Virginia business owners and HR professionals, the most important takeaway is this: a non‑compete can now be perfectly drafted and still fail entirely based on how the employee’s departure is handled. If your termination process is misaligned with your employment agreements, you may lose the very protection you thought you had purchased. The first practical impact of SB 170 is that termination decisions are now legally intertwined with enforceability. Employers should no longer wait until an employee resigns or is separated to consider whether a non‑compete will achieve the employer’s goals. That analysis needs to happen at the front end, when the employer makes an offer to an employee. Employers should be asking themselves whether they are truly willing to commit, in advance, to paying severance to preserve post‑employment restrictions. Employers should also decide which employees actually present a competitive threat worth that cost, rather than automatically rolling non‑compete language into every offer letter. A second major shift is that SB 170 extends far beyond the “low‑wage employee” focus of earlier Virginia legislation. This law applies just as much to executives, senior managers, sales professionals, and business development employees as it does to entry‑level staff. Employers who assume their leadership team or top performers are insulated from these changes are mistaken. Virginia law no longer treats non‑competes as a default option even at the highest levels of an organization, and employers should revisit every existing assumption about who may be bound by post‑employment restrictions. Unfortunately, SB 170 also leaves critical questions, as key terms in the statute are undefined. For example, SB 170 does not explain what constitutes a “for cause” termination, nor does it specify how much severance—or what type of compensation—is sufficient to preserve enforcement. That ambiguity virtually guarantees litigation. Employers relying on vague termination language, inconsistent cause determinations, or ad hoc severance arrangements are setting themselves up for disputes they are unlikely to win, particularly given that the statute authorizes attorneys’ fees and penalties of up to $10,000 per violation. As a result of SB 170, non‑competes are no longer “free.” Employers who want them to remain enforceable must ensure compliance and planning in all hiring decisions and offer letters. Employers should clearly define what constitutes for cause termination events in employment agreements, commit to severance or other post‑separation compensation in advance, and disclose separation pay or compensation at the time the employee signs the employment agreement and non‑compete. In many cases, once these costs are identified, businesses will decide that a non‑compete no longer makes economic sense for a given role. Between now and July 1, 2026, Virginia employers should take several concrete steps. First, review employment agreements and non‑compete templates for compliance with SB 170. Existing agreements should be inventoried so decision-makers know which employees are subject to post‑employment restrictions and which agreements may be amended or renewed in a way that triggers SB 170. Second, Employers should tighten termination provisions in employment agreements. Consider clearly defining for cause termination events to align with actual business practices and goals. Employers should resist the temptation to automatically renew non‑competes without reevaluating whether they are necessary and sustainable under the new framework. Finally, HR, legal, and management teams should be aligned before any termination decision involving a non‑compete holder is made. If a company intends to rely on a non‑compete provision going forward, it must either have a well‑documented for‑cause termination or pay severance exactly as disclosed in the employment agreement. Deviating from that plan after the fact is likely to render the restriction unenforceable. Beginning July 1, 2026, offer letters and employment agreements must be drafted with SB 170 squarely in mind. Severance obligations should be explicit, termination standards should be unambiguous, and the agreement should integrate cleanly with any separation or release documents the company typically uses. Ambiguity will not benefit the employer under this statute. Finally, as an alternative to non-compete provisions, consider refocusing your post-employment protective strategies. Confidentiality agreements, trade secret protections, data access controls, and narrowly tailored non‑solicitation provisions often provide more reliable and less expensive protection than non‑competes under Virginia’s current legal landscape. For some employers, shifting focus to these tools will reduce litigation risk while still safeguarding key business interests. SB 170 continues Virginia’s clear policy trend favoring employee mobility and limiting post‑employment restraints. Non‑competes are not gone, but they are no longer the default solution they once were. Employers who proactively adjust their agreements and offboarding strategies can still protect themselves effectively. Those who ignore these changes risk expensive disputes, unenforceable contracts, and penalties that could have been avoided with thoughtful planning.
April 28, 2026
Intellectual Property
Knowing Isn’t Enough: The Supreme Court Redefines ISP Liability for Piracy
When users pirate music, movies, or other creative works online, the internet service provider (“ISP”) supplying their connection may know more than you might think. Companies like Cox Communications receive thousands of automated notices identifying exactly which subscriber accounts are associated with illegal downloading — in Cox’s case, such notices accrued over a period of two years. In Cox Communications v. Sony Music Entertainment, decided March 25, 2026, the Supreme Court confronted a deceptively simple question: if an ISP knows a subscriber is using its service to steal copyrighted content and keeps providing that service anyway, is the ISP itself liable? A jury of the lower court said “yes,” issuing relief to the tune of roughly $1 billion. The Supreme Court has now unanimously reversed the jury’s decision, although the Justices aren’t in agreement with respect to their rationale and extent. Writing for the majority, Justice Thomas held that an ISP can only be liable for contributing to its users' infringement if it intended that the provided service be used for infringement, particularly in two narrow circumstances: 1) if the ISP actively encouraged the illegal activity, or 2) if the service itself was essentially designed for piracy. The Court found that Cox never promoted piracy and, in fact, issued warnings to and suspended infringing accounts. The majority made clear that simply knowing about infringement and failing to cut off service to every potential infringing account (and, indeed, the record suggests that Cox did not know with total particularity which accounts engaged in infringement) is not enough. Justice Sotomayor, concurring, agreed Cox was not liable but warned that the majority had gone too far in strictly defining only two theories of “intent.” She argued that the ruling diminishes the DMCA safe harbor, which was specifically designed to give ISPs an incentive to crack down on repeat infringers in exchange for legal protection. If ISPs can't be held liable regardless of the very strictly defined theories of intent, that no longer has material effect. Justice Jackson joined Justice Sotomayor in her concurrence. For technology providers, implementing procedures to warn against infringement, and even taking action such as suspending service, may successfully ward off secondary liability. For copyright holders, particularly in the music, film, and entertainment industries, this decision has the potential to present a significant setback for IP enforcement, as avenues for pressuring ISPs to police their networks have been substantially narrowed. Going forward, rights holders may need to focus enforcement efforts more directly on individual infringers or on platforms that actively facilitate piracy, rather than on the companies providing the underlying internet connections. While the decision is a major win for ISPs, the Sotomayor concurrence reasoning could signal that future litigation (or future legislation) may set new standards.
April 27, 2026
Labor and Employment
Substance Use Policies and Legal Cannabis: Balancing Compliance and Judgment in a Rapidly Shifting Landscape
For years, workplace substance use policies were easy to administer and easy to defend. A positive drug test typically ended the analysis. That is no longer true. Legal cannabis has introduced a level of complexity that many employers have not fully absorbed. The issue is not whether employers can maintain drug-free workplaces. They can. The issue is whether their policies reflect the legal distinctions that matter now and whether their decision-making will hold up under scrutiny. In 2026, the risk is not permissiveness. It is imprecision. The instinct to rely on federal law is understandable, but often misplaced. Cannabis remains illegal under the Controlled Substances Act. For certain employers, particularly those subject to the U.S. Department of Transportation, that fact continues to dictate outcomes. Safety-sensitive roles remain tightly regulated, and state law does not override those obligations. But for most employers, federal law does not answer the questions that actually arise in practice. State law increasingly does. The critical mistake is treating federal illegality as a blanket justification for broad policies or reflexive discipline. In many jurisdictions, that approach is no longer defensible. State law has shifted the analysis in a meaningful way. Across the country, legislatures have moved beyond legalization and into regulation of the employment relationship itself. In practical terms, that means employers are now operating within statutory frameworks that protect lawful, off-duty cannabis use and limit how employers can respond to it. The implications are significant. A positive test result, standing alone, is often no longer enough. Hiring decisions based on off-duty use are increasingly restricted. Policies that fail to distinguish between lawful conduct and workplace impairment are becoming harder to defend. This is not a marginal development. It is a structural change in how substance use issues are evaluated. The legal question is no longer “did the employee use cannabis.” Questioning whether an employee used cannabis is no longer valid. It is whether the employee was impaired at work and whether the employer can prove it. That distinction is where many policies break down. Traditional testing methods detect past use, not current impairment. As a result, employers who continue to rely exclusively on test results are often relying on evidence that does not answer the legally relevant question. State guidance is increasingly explicit on this point. Employers are expected to base decisions on observable, contemporaneous indicators of impairment that affect performance or safety. That requires more than suspicion and more than a laboratory result. It requires judgment, documentation, and consistency. Employers who have not trained managers to identify and articulate those indicators are, in effect, delegating critical legal decisions to individuals who are not equipped to make them. These issues rarely exist in isolation. Substance use questions often intersect with obligations under the Americans with Disabilities Act and parallel state laws. That is where the analysis becomes more nuanced. An employee’s conduct may be unprotected. The underlying condition may not be. Treating those as the same issue is a common and costly mistake. Medical cannabis adds another layer. While federal law does not require accommodation of marijuana use, state law may impose obligations that require a more individualized assessment. Employers who default to categorical rules risk overlooking when the law requires a closer look. This is an area where rigid policies tend to create, rather than reduce, exposure. Remote work has made outdated policies harder to defend. The shift to remote and hybrid work has exposed another weakness in legacy substance use policies. Rules that were drafted with a physical workplace in mind do not always translate well to a workforce that operates across locations and, in many cases, from home. The relevant inquiry is no longer where the employee is. It is whether the employee is fit for duty during working time. That sounds like a subtle distinction. It is not. Policies that focus on presence rather than performance are increasingly out of step with both how work is performed and how the law evaluates these issues. What a defensible approach actually looks like. Employers who are managing this well tend to have one thing in common. Their policies are not just updated. They are deliberate. They distinguish clearly between off-duty conduct and on-duty expectations. They define impairment in terms that can be observed and documented. They use testing in a way that aligns with legal limits rather than as a default response. And they train managers to make decisions that will withstand scrutiny after the fact, not just in the moment. Just as importantly, they recognize when a situation calls for legal analysis rather than a reflexive policy application. The takeaway. This is one of those areas where the law has moved faster than most workplace practices. Employers who continue to rely on familiar approaches are not necessarily being careless. But they are often operating with assumptions that no longer reflect the legal landscape. That is where risk accumulates. A well-drafted policy is part of the solution. It is not the entire solution. Alignment between policy, training, and decision-making is what ultimately determines whether an employer is protected or exposed. In a landscape that continues to evolve, getting that alignment right is not simply a compliance exercise. It is a strategic one.
April 24, 2026
Tenant Opportunity to Purchase Act
In this episode of The DC Rental Act in Three Minutes, Offit Kurman attorneys Brian Dorwin and Gwen Roy Harrison break down how the Rental Act reshapes the Tenant Opportunity to Purchase Act (TOPA) for DC multifamily properties. They explain how TOPA once applied almost universally—often delaying closings and forcing landlords and developers into costly negotiations with tenant associations. The Rental Act changes that by introducing key exemptions that streamline transactions and reduce uncertainty. New construction properties (with a certificate of occupancy issued within the last 15 years), LIHTC properties, certain ownership transfers, and small landlords with two to four units may now be exempt from TOPA. The episode also highlights new notice requirements for current and incoming tenants—and why compliance still matters, even with statutory safeguards in place. The takeaway: these reforms are expected to unlock stalled deals and bring greater efficiency to DC’s multifamily market.
April 24, 2026
Business
Strategic Equity Partners: Expertise vs. Governance Friction
In many platform acquisitions (particularly in search funds, entrepreneurship through acquisition (ETA) transactions, and independent sponsor deals), adding a “strategic equity partner” is framed as a clear positive. There are real benefits like additional capital, operating experience, lender credibility, and often a higher probability of closing. The issue is less about whether to add a partner and more about when and how that partner is introduced. When a strategic partner is brought in after the LOI is already signed, the timeline to negotiate the governance framework is compressed. The narrative and excitement at that stage remain focused on upside, while the governance implications of adding another decision-maker are pushed into later negotiations. The LOI-to-close window is compressed, and incentives shift toward getting the deal done. As a result, governance is frequently finalized under pressure rather than designed deliberately. The impact is rarely economic at the outset. It shows up in execution. As additional partner approvals and consent rights are layered in, decisions that were previously within the operator’s control now require alignment across multiple stakeholders. More stakeholders mean more approvals, and more approvals tend to slow the process. That friction is not always visible during the transaction itself. It becomes more apparent in the first 100 days post-close, when the business needs to move quickly, and the governance structure does not support the pace that was underwritten. This dynamic is more pronounced in roll-ups, including those executed through search funds, ETA platforms, and independent sponsor structures, where speed and repeatability drive returns. Even modest governance drag can change outcomes. A structure that is directionally sound but operationally constrained can often underperform a simpler structure that can execute consistently. There is a counterpoint: more deliberate governance can lead to better decisions. The tradeoff between decision quality and execution speed should be explicit rather than assumed. What “Strategic” Usually Signals Introducing a strategic partner at LOI often reflects a gap in the team rather than a pure enhancement. This is especially common in search fund and independent sponsor transactions, where the operator is building infrastructure in parallel with executing the acquisition. The framing is additive, but the underlying driver is frequently a need to solve for something that is not yet fully built into the platform. This dynamic also mirrors a broader structuring question: where strategic partners sit in the equity stack—at the holdco or portfolio level—can materially impact governance and decision flow, not just economics. In many cases, the platform relies on capabilities that are still developing. Integration experience is a common example. The roll-up model assumes that acquisitions can be absorbed efficiently, but that capability is often unproven at the platform stage. Industry-specific operating knowledge may also be limited, particularly where the operator is entering a new vertical or scaling beyond prior experience. Systems and reporting infrastructure tend to lag the ambition of the strategy, creating a mismatch between what is modeled and what can be executed. The natural response is to introduce a strategic partner to bridge that gap. Lender dynamics often reinforce the decision. In leveraged transactions, the team is underwritten alongside the asset. A strategic partner can strengthen that narrative by adding perceived institutional support and a track record that lenders recognize. In some cases, this improves terms or increases certainty of a close. The partner effectively becomes part of the credit story, not just the equity stack. Integration bandwidth is another driver. Roll-ups assume the ability to absorb add-ons quickly, often without a fully built-out operating platform. A partner is expected to support that integration planning and post-close execution, thereby reducing execution risk. There is also an element of risk sharing. Particularly in first platform deals or more aggressive investment theses, bringing in a partner spreads exposure and introduces another perspective if/when performance deviates from plan. None of this is inherently problematic. In many cases, it is a rational response to real constraints. The consistent consequence, however, is that the partner brings governance, and governance changes how the business operates. The key is to enter the deal with a clear understanding of how that governance will function in practice. The below demonstrates a typical board structure in traditional search fund models. You can explore the different models and board structure further here: https://tinyurl.com/2rh74bk2 Where Friction Shows Up As briefly mentioned above, the friction impact appears in decision-making. As additional consent rights are layered in, more parties must agree before action can be taken. The underwriting model may assume speed and autonomy that no longer exists once governance is expanded. Board composition is often where this dynamic becomes real, because it determines who actually has the ability to approve or block decisions. A balanced board on paper can function as a checkpoint in practice once quorum and voting thresholds are applied. If control is not clearly aligned with the operating model, the board shifts from oversight to gatekeeping. Decisions that would otherwise be routine begin to require formal coordination, special meetings, and sometimes even input from professional advisors representing various stakeholders. Protective provisions compound the effect. In practice, these are the provisions that designate certain actions as “reserved matters” requiring supermajority or unanimous consent at the board or investor level. Common examples include: incurring or refinancing debt, approving capital expenditures above a threshold, deviating from the approved budget or business plan, issuing additional equity, or entering into material contracts or acquisitions. Each of these approvals is reasonable on its own. When each step requires a supermajority or unanimous sign-off, the process shifts from operator-led execution to coordinated approvals across multiple stakeholders, which slows the cadence of decision-making. The issue is not the existence of these rights, but how frequently they are triggered in the normal course of operating the business. Budget approvals can create the same constraint. When budgets require approval and variance thresholds are tight, routine adjustments turn into approval processes, limiting management’s ability to respond in real time. Roll-ups rely on speed, and competitive processes — particularly in lower middle market ETA and independent sponsor deals — tend to reward buyers who can move quickly with certainty. If each add-on requires layered approvals, the platform becomes less competitive. Opportunities that fit the thesis may still be identified, but the ability to act on them is constrained by structure rather than strategy. This is why the friction becomes most visible in add-on acquisitions, where speed is often the deciding factor in winning the deal. Management decisions can also migrate from operator discretion to investor approval. Hiring, compensation, and incentive alignment become slower to execute. Over time, this affects the quality and responsiveness of the team, particularly in periods where rapid adjustment is required. Deadlock and Forced Outcomes As additional stakeholders are introduced, disagreements become more likely. In many structures, those disagreements ultimately point parties toward formal deadlock mechanisms. These can include buy-sell arrangements (often structured as “Russian roulette” or “Texas shootout”), put/call rights, forced sales or buyouts, or redemption rights. These mechanisms are designed to break impasses, but they can be outcome-determinative and, in some cases, harsh to one side. A forced buyout may require a sponsor or the company to purchase an equity stake at a defined price or formula, which can create meaningful cash flow strain at the exact moment the business needs capital to execute. Alternatively, a party may be compelled to sell at a time or valuation that does not align with the original thesis. The key point is not that these provisions should be avoided. It is that once disagreements arise, the path to resolution is often binary and financially significant. If those dynamics are not considered upfront, governance can shift from a tool for alignment to a mechanism that forces outcomes under pressure. Why It Matters More in Roll-Ups Single-asset acquisitions can tolerate some governance friction because the operating model is relatively stable. Decisions are fewer in number and less time-sensitive. In that context, additional oversight may be manageable. A roll-up operates differently. The model depends on pace, repetition, and the ability to act decisively across a sequence of opportunities. Each add-on introduces new variables, and the platform must be able to respond quickly to integrate, optimize, and move forward. When governance introduces multiple layers of approval and frequent investor involvement in operational decisions, the strategy becomes harder to execute in practice. Decisions can still be made, but not at the speed required to maintain momentum. At that point, governance directly affects outcomes and is difficult to unwind without renegotiating core terms. The graphic below shows a sample board composition after numerous acquisitions. Note the increasingly limited decision-making power of the operator. Decision Rights to Resolve Early If a strategic partner is introduced around LOI, whether it be in a search fund, ETA, or independent sponsor context, decision rights should be aligned with how the business will operate in practice. Board control at closing needs to be explicit and consistent with the intended operating model. Ambiguity at this stage tends to create friction later. It is also worth recognizing why these protections exist. Investors are seeking to protect capital and, in many cases, bring real experience that can improve outcomes. A well-constructed board can provide discipline, identify risks early, and prevent decisions that would otherwise impair value. The goal is not to remove oversight, but to calibrate it to support execution rather than impede it. Management authority should allow day-to-day decisions without repeated escalation. The distinction between strategic oversight and operational control needs to be clear in both concept and documentation. Add-on acquisition parameters should be defined in advance, so execution does not depend on real-time approvals. Debt capacity should align with the expected capital strategy rather than restrict it. Budget processes should allow for adjustment as conditions change, rather than lock the business into a static plan. Management should retain sufficient control to build and adapt the team required to execute. Deadlock provisions should be evaluated based on how quickly they can resolve disagreement, not simply how balanced they appear. These are execution variables that ultimately determine whether the strategy can be implemented as underwritten or whether governance constraints begin to reshape the outcome. Structuring to Preserve Speed These dynamics point to a few practical governance principles. First, align control with the operating model. If the thesis depends on speed, decision rights should enable timely action at the management level. Second, reserve approvals for truly fundamental matters, not routine operating decisions that occur frequently. Third, define thresholds that reflect how the business will actually run, including pre-approvals for expected activities like add-ons and incremental leverage. Fourth, make approval processes workable in real time, not just balanced on paper. This is where experienced counsel matters. In this context, “sophisticated governance” means more than drafting protections; it involves translating the investment thesis into a decision-rights framework that will function under time pressure. That includes calibrating reserved matters, setting practical thresholds, designing board composition and quorum rules, and stress-testing deadlock outcomes against realistic scenarios. The goal is to preserve investor protections while ensuring the company can execute without repeated escalation. Closing Thought Strategic partners can add value, particularly where they address real capability gaps or strengthen the financing narrative. In many cases, they improve the quality of the deal and increase the probability of closing. But they also introduce a second layer of governance that must align with how the business will operate after closing. If that alignment is not addressed before close, it tends to be addressed afterward, when decisions need to be made quickly and flexibility is limited. That is where execution risk increases and the original thesis begins to drift. Not because the strategy was flawed, but because the structure does not support it. If you are navigating this dynamic in a live deal, it is worth addressing decision rights early and in practical terms — before they become constraints in the first 100 days.
April 23, 2026
Real Estate
Why Delaware Legal Opinions Matter – Part 1: Delaware Law at the Core of Modern Lending Transactions
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. In today’s transactional landscape, Delaware is not just a preferred jurisdiction; it is often embedded in the structure of deals that have little or no other connection to the state. A borrower formed in Delaware. A guarantor organized as a Delaware LLC. A holding company sitting at the top of the structure. When that happens, core legal questions in the transaction, existence, authority, and enforceability, are governed by Delaware law, regardless of where the deal is negotiated or the assets are located. That is where Delaware opinion counsel becomes essential. One of the most common misconceptions is that Delaware legal opinions are only relevant to Delaware-based transactions. They often arise when the property or transaction is geographically nowhere near the State of Delaware. For example: property located in Arizona, a loan negotiated by Nevada counsel, or a borrower formed as a Delaware LLC. Even though the transaction is otherwise local, the lender’s ability to rely on the borrower’s existence, authority, and execution is a Delaware law question. At its core, a Delaware legal opinion addresses a defined set of entity-level issues, including whether the: Entity validly exists and is in good standing Entity has the power to enter into the transaction Transaction has been properly authorized by the entity’s governing documents Operative loan documents are enforceable (subject to customary limitations) These are not abstract concepts—they directly address whether the transaction is legally binding on the entity. From a lender’s perspective, these opinions serve as a risk allocation tool. They provide comfort that the borrower is properly formed, authorized, and bound by the transaction documents. In institutional lending, particularly in real estate finance, this is a standard closing requirement. Accordingly, Delaware counsel typically reviews organizational documents, confirms authority and approvals, coordinates with deal counsel, and delivers the opinion on closing. Handled properly, Delaware counsel operates as a seamless extension of the deal team. Delaware entities are used heavily in structured real estate finance and multi-entity borrower structures, where separateness and authority are critical. If your transaction involves a Delaware entity, the key questions are when to engage Delaware counsel and how to do so efficiently. Delaware legal opinions are a core component of modern transactional practice. They are not simply a formality; they are a targeted legal analysis that ensures a transaction is legally effective under Delaware law.
April 22, 2026
Labor and Employment
Non-Discrimination Training: What In-House Counsel and HR Executives Need to Do Now
Non-discrimination training is no longer simply a best practice; it is increasingly a legal imperative. Across the country, states, and municipalities are imposing affirmative obligations on employers to implement, document, and periodically refresh training programs to prevent workplace discrimination and harassment. For companies operating in multiple jurisdictions, the array of requirements presents both compliance complexity and potential litigation risk. This advisory is directed to in-house legal counsel and human resources executives. Its purpose is straightforward: if your organization does not currently have a structured, recurring non-discrimination training program in place, you need one — and the time to act is now. The Legal Landscape: A Jurisdiction-by-Jurisdiction Overview The following summary reflects the current state of non-discrimination training requirements and formal recommendations across key jurisdictions. This is not an exhaustive survey, but it illustrates the breadth of regulatory attention employers face. California California imposes an affirmative duty on employers to take reasonable steps to prevent and promptly correct unlawful discrimination and harassment. While the statute does not establish a single universal periodic training mandate for all protected categories, it does require certain employers to provide regular sexual harassment training. Critically, California law also requires that any training program leading to employment be administered in a nondiscriminatory manner. Employers with California operations who are not already conducting regular, structured anti-discrimination training should treat this as a compliance gap requiring immediate correction. New York City The New York City Human Rights Commission recommends that employers implement antidiscrimination policies specifically addressing gender identity and expression and provide ongoing training for employees and agents. In the context of New York City’s historically aggressive enforcement posture—including substantial administrative penalties and individual liability exposure—these recommendations carry significant practical weight. In-house counsel should treat the commission’s guidance as a strong indicator of what regulators will scrutinize in the event of a complaint. Philadelphia The Philadelphia Fair Practices Ordinance guidance recommends that employers provide training to managers and employees before problems arise—particularly regarding gender identity and expression. This proactive framing is significant: Philadelphia regulators are signaling that reactive training (i.e., training only after a complaint is filed) is insufficient. Employers with Philadelphia operations should build training into their standard onboarding and periodic compliance calendars. San Francisco San Francisco imposes some of the most explicit affirmative obligations. The San Francisco Human Rights Commission requires all agencies, businesses, organizations, city contractors, and city departments to clearly communicate the city’s non-discrimination laws. It further recommends ongoing training for all management, employees, and volunteers on gender identity issues. Washington The Washington State Human Rights Commission recommends that employers educate all employees about non-discrimination policies, with particular attention to gender identity and expression. The commission further suggests that employers consider bringing in outside consultants to provide specialized training on gender identity sensitivity and awareness. For organizations with a significant Washington workforce, this consultant recommendation reflects regulatory awareness of the limits of generic training—and should prompt a review of whether your current training program is sufficiently tailored. District of Columbia The District of Columbia mandates compliance with non-discrimination laws and requires that employer programs contribute to the elimination of sex stereotyping and barriers to employment. While current guidance does not specify a universal periodic training interval for all employers, the District’s substantive mandate is clear, and employers operating there should not interpret the absence of a specific training schedule as an option to forgo training altogether. Why “Recommendations” Carry Real Legal Risk In-house and outside legal counsel sometimes draw a sharp distinction between legal requirements and regulatory recommendations, treating the latter as aspirational and optionally advisable. In the employment discrimination context, that distinction can be misleading and potentially costly. When a regulatory body with enforcement authority—such as the New York City Human Rights Commission, the Philadelphia Commission on Human Relations, or the San Francisco Human Rights Commission—issues guidance recommending employer training, that guidance typically reflects the standard against which the agency will measure employer conduct when adjudicating a complaint. An employer who ignored formal training guidance from an enforcement agency will face a significantly more difficult defense posture than one who followed it. Beyond agency enforcement, you should consider the evidentiary implications in civil litigation. Plaintiffs’ counsel regularly introduce evidence of an employer’s failure to conduct training, or to conduct it adequately, as evidence of a discriminatory or hostile work environment. Courts have consistently recognized training programs as a component of an employer’s affirmative defense in harassment cases. The absence of training, by contrast, can undermine an employer’s ability to invoke the Faragher-Ellerth defense or its state-law equivalents. A Practical Action Plan for Legal Counsel and HR The following steps represent a baseline compliance framework for organizations operating in one or more of the jurisdictions addressed above. Legal counsel and HR executives should assess their current programs against each item. Conduct a Jurisdictional Audit Map your workforce to the specific jurisdictions where employees work or are supervised. For each jurisdiction, identify applicable statutes, ordinances, and agency guidance. Pay particular attention to gender identity and expression requirements, which appear consistently across the surveyed jurisdictions. Establish a Training Calendar Several jurisdictions emphasize ongoing or periodic training—not one-time programs. Build a recurring training schedule into your compliance calendar, with defined intervals for managers and employees. Tie training events to onboarding, annual compliance cycles, and promotion into supervisory roles. Differentiate Manager and Employee Training Management-level training should address investigation obligations, reporting duties, and liability implications that differ from general employee instruction. Several jurisdictions specifically call out training for managers and agents, ensure your program reflects this distinction. Address Gender Identity and Expression Explicitly Every jurisdiction reviewed here specifically references gender identity and expression as a training focus. Ensure your curriculum addresses these protected categories with specificity, not merely as a line item in a broader protected-class list. Consider Specialized Consultants Washington State’s recommendation that employers engage outside consultants for gender identity training is worth noting for employers in any jurisdiction. Where internal training capacity is limited, or where a workforce has complex dynamics, outside expertise can improve both the quality and the credibility of your training program. Document Training records should be maintained systematically. Document attendance, training content, delivery dates, and any acknowledgment forms signed by participants. In the event of an administrative complaint or civil litigation, contemporaneous documentation of a robust training program is among the most valuable evidence an employer can produce. The Bottom Line Non-discrimination training requirements are not static, and the regulatory trend is clearly toward more specificity, more frequency, and more accountability—not less. Employers who treat training as a one-time orientation task, or who have allowed their programs to go stale, are accumulating legal exposure that is relatively inexpensive to address proactively and potentially very costly to address reactively. In-house counsel should elevate this issue with HR leadership and, where appropriate, the executive team. A well-designed, regularly delivered, and carefully documented training program is one of the most straightforward investments a company can make in its employment law compliance infrastructure—and one of the most defensible positions it can establish when regulatory or litigation exposure materializes. Employers should consult qualified employment counsel to evaluate compliance obligations applicable to their specific circumstances and jurisdictions.
April 21, 2026
Construction
The Saga of Economic Volatility Continues — Construction Contract Approaches for Potential Economic Issues Arising from the Iran Military Conflict
Six years ago, the COVID pandemic caused a shutdown of the economy. Since then, continued issues of economic volatility have occurred: supply chain woes; inflation and cost escalation; tariffs; and various other natural disasters. Now, with the Iran military conflict, specific materials and oil prices appear to be at risk. This article presents approaches for addressing these risks in construction contracts. As a starting point, military conflict is a typical type of force majeure event. But that alone does not necessarily dictate a remedy or relief for impacts. Generally, the best approach is for the construction contract to specifically address both the issue and the afforded relief. One initial issue in negotiating such contract clauses is the definition of the Iran military conflict itself. Does the military conflict constitute a war? Does the clause protect from war, terrorism, or a specifically identified military conflict? Does the current conflict constitute an unusual, unforeseen event? What if you sign a contract today—at this point, does it still remain an unforeseen event? Because of these complications, it is best to specifically address the issue with a custom contract clause. Instead of relying solely on vague or broad language, any negotiated clause should specifically identify the issue and all broad concerns—impacts of any terrorism, vandalism, armed conflict, military conflicts, or any widening military or government action, including but not limited to, events arising from the Iran/U.S. military conflict. And it should identify the potential problems (price escalation and delay of materials) and the respective relief (increase in price and extension of time through a change order). Even if a standard construction contract form includes a force majeure clause for “war,” it might not cover all incidents or events. And it might only afford relief of a time extension, but not necessarily additional compensation for price issues. Relying upon generic common law doctrines, such as commercial impracticability are risky because a court might rule that the issue was foreseeable, especially if the contract is signed while the pending conflict is developing. And a court might rule that the impacts from the event do not rise to the level of commercial impracticability. Also, when the issue of concern is economic volatility, the more that the event is known as a potential issue at the time of contracting, the more reason to specifically identify the issue and the mechanisms for relief. This is generally true for all the economic issues identified in this article—pandemics; supply chain issues; inflation and cost escalation; and tariffs. If an event is known to exist and might impact the project, best practice is to specifically address the event with a clause that affords either an extension of time, increase in price, or both. Other specific clauses to consider include: Price escalator clauses for either tariffs, price increases, or specified categories of materials (e.g., specific oil-based materials or fuel price increases) Contingencies or allowances for materials of concern or tariff costs Greater flexibility for substitutes or alternatives to allow for the sourcing of differing materials Extensions of time if materials are difficult to source Termination for convenience clauses if projects become impracticable due to any war-time orders or governmental orders that severely impede the project Segregated pricing by agreement for time-and-material budgets for carved-out scope packages that might be more volatile Prompt procurement, buy-out administration, and warehousing of goods in advance to avoid potential volatility on specified goods Value-engineering during the preconstruction phase to identify different (more easily accessible) materials Increased buffers in the contract price to account for the risk of potential tariff impositions When negotiating and drafting custom contract clauses to address risk on projects, or if litigating claims for equitable adjustments or change orders, best practice is to consult with trusted, experienced counsel that is knowledgeable on the intricacies of construction law. JEFFREY C. BRIGHT is a Principal attorney in Offit Kurman’s Construction Practice Group and maintains a multi-state construction law practice, representing contractors, subcontractors, owners, construction managers, design-builders, and design professionals. He is licensed and active in construction law matters in PA, MD, DC, VA, and CA. In addition to handling construction litigation and project disputes, including time impact claims for liquidated damages, delays, or disruptions, he regularly advises on the preparation, revision, and negotiation of construction contracts for various project delivery systems. He can be reached at jeff.bright@offitkurman.com.
April 21, 2026
Commercial Litigation
Developments in IEEPA Refund Process: CAPE Portal Now Live
This is an update to our previously published article, "Developments in IEEPA Refund Litigation" posted April 15, 2026. U.S. Customs and Border Protection (“CBP”) has taken a significant step forward in implementing a formal refund process for duties imposed under the International Emergency Economic Powers Act (“IEEPA”). With the launch of Phase 1 of the Consolidated Administration and Processing of Entries (“CAPE”) portal within ACE, importers now have an operational mechanism to begin submitting refund claims. While this development signals meaningful progress, eligibility is currently limited, and importers must continue to take proactive steps to preserve their rights. CBP Update: CAPE portal Now Open (Phase 1) At present, CAPE filings are limited to: Unliquidated entries Entries within 80 days of liquidation Entries outside of this scope will be rejected under current validation rules, and CBP has not yet provided guidance on when additional categories of entries will become eligible under future phases. The CAPE system allows for: Submission of multiple entry numbers in a single claim Automated validation of entry eligibility Batch processing of refund claims (currently up to 10,000 entries per form) Based on initial use, the system is generally intuitive and efficient when claims are properly vetted. While some minor system delays have been observed, likely due to high user volume, the submission process itself has proven to be relatively seamless. CIT Update: Continued Importance of Protest Rights As discussed in our prior update, the Court of International Trade (“CIT”) has emphasized the continued importance of administrative remedies. Specifically: CBP has been directed to address:Unliquidated entries; and Entries not yet final The CIT has highlighted that importers “should be aware” of protest rights under 19 U.S.C. § 1514 This remains a critical point. While CAPE provides a new refund pathway, it does not eliminate the need to file protests where applicable. Entries outside the CAPE eligibility window, particularly those more than 80 days post-liquidation, must still be addressed through traditional protest procedures. However, it was made clear that any entry that currently has a pending protest is NOT available to submit a declaration through CAPE, which seems to create hesitation with filing protective protests. Either way, importers and their representatives need to be assessing the risk and planning of action. Inaction could prove costly. Key Takeaways for Importers Categorize Entries Immediately Importers should identify and classify entries into: Unliquidated entries (currently CAPE eligible) Entries ≤ 80 days post-liquidation (currently CAPE eligible) Entries within 180-day protest window (protective protest eligible) Entries beyond 180 days (potential risk, but addressed by CIT order) CAPE Eligibility is Limited Phase 1 is restricted, and CBP has not yet announced timing for broader “Phase 2” eligibility. Importers should not delay action in anticipation of expanded access. Protests Remain a Safeguard The CIT has not resolved whether refunds will be available for entries that are final and beyond the protest period. Filing a protest remains a prudent “belt and suspenders” approach where timing permits. Prepare Claims Carefully Before Submission to Avoid Validation Errors CAPE validations are strict. Entries will be rejected if they: Fall outside eligibility windows Do not contain qualifying IEEPA HTS provisions Are not properly associated with the importer account Looking Ahead CBP’s CAPE portal represents a meaningful advancement in processing IEEPA refund claims, but the current framework remains incomplete. Importers should prioritize: Immediate identification of affected entries Submission of CAPE claims for eligible entries Preservation of protest rights where applicable At this time, there is no indication when additional CAPE filing phases will be implemented, and uncertainty remains for entries outside the current eligibility parameters.
April 21, 2026
Family Law
When “I Do” Turns Into “You Owe”
Marriage is a partnership — but under the Internal Revenue Code, it is also a financial alliance with serious consequences. Only spouses can file a joint tax return under I.R.C. § 6013(a). And when they do, they are jointly and severally liable for the full tax bill. Not half; not a proportional share; but the whole thing. If taxes aren’t paid, the IRS can track down or sue either spouse for 100% of the debt. For many couples, filing jointly offers lower taxes. But when a return has errors, omissions, or unpaid balances, a joint filing can suddenly become a source of unintentional, and profoundly unfair, exposure. Innocent Spouse Relief enables a “requesting spouse” to obtain relief from tax obligations that rightfully belong to the other spouse. I.R.C. has three pathways for relief. § 6015: (i) Traditional Relief; (ii) Separation-of-Liability Relief; and (iii) Equitable Relief. With each of these paths, however, there is a threshold rule: there must be a joint return. Traditional Relief Traditional relief is appropriate when a joint return includes an understated tax liability resulting from errors made by the other spouse’s unreported income received or improper deductions or credits claimed. In the real world, scenarios can be shockingly audacious: the deduction of business expenses never paid; nondeductible state fines disguised as business write-offs; and personal pet costs described as “home office security.” To be eligible, the requesting spouse must demonstrate that they didn’t know and had no reason to know about the understatement when they signed the return and that it would be inequitable to hold them responsible for 50% of the liability. Traditional relief is an issue for the spouse who legally signed the return in good faith and did not know the numbers were erroneous. The alleged innocent spouse running around using the other spouse’s corporate credit card to pay for household groceries, children’s clothing, and private school tuition can claim to be “innocent.” The request for Traditional relief typically must be made within two years of the IRS beginning collection activity. Separation-of-Liability Relief Separation-of-Liability Relief can be used by spouses whose marriage is ending or has ended. For this relief, a spouse wishing to claim is required to be divorced, legally separated, or widowed; have lived apart from the other spouse for at least 12 months before filing the request. The timing for relief under Separation-of-Liability Relief matters, too. The election must be made within two years of the start of collection activity by the IRS. The IRS can use Separation-of-Liability Relief to appropriately and equitably allocate the deficiency between the spouses based on who was responsible for its occurrence. Equitable Relief Sometimes, a spouse doesn’t qualify neatly under the technical rules of Traditional or Separation-of-Liability Relief. Equitable relief is available for hard, more human situations where the rules lack the flexibility to capture unfairness. To be eligible, the requesting spouse needs to have filed a joint return, be ineligible under the other two provisions, file a timely claim (generally within the 10-year collection period), not been involved in fraud, and not engaged in fraudulent asset transfers. Equitable relief exists even if a piece of liability is technically attributable to the requesting spouse, especially in situations involving abuse, financial control, or coercion. The IRS assesses all facts and circumstances, no single factor prevails. Marital status Economic hardship Knowledge or reason to know the tax would not be paid Legal obligations in a divorce decree Whether the requesting spouse significantly benefited Subsequent tax compliance Mental or physical health In cases of abuse, especially when a spouse controlled finances or instilled fear of retaliation, the scales can tilt heavily in favor of relief. Conclusion A joint tax return is not a piece of paper. It’s a legal imperative with actual repercussions. It's a wise financial move to consider. For some, it becomes an unpredictable liability tied to acts they didn't take in the first place and sometimes didn't even know were possible. Innocent Spouse Relief is there to correct that. It understands that fairness is important. And under good circumstances, it offers a powerful remedy for those who signed in trust but were stuck with the bill. Marriage can be shared, but injustice does not have to be.
April 21, 2026
Landlord Representation
Avoiding FLSA Pitfalls When Offering Onsite Housing and Rent Discounts
Onsite housing and rent discounts are common benefits in the property management industry, but federal wage-and-hour litigation makes clear that these arrangements can create significant Fair Labor Standards Act (FLSA) exposure if they are not carefully structured. The central question courts ask is not how the benefit is labeled, but whether onsite living primarily benefits the employer and whether it results in unpaid or underpaid work. When housing benefits blur into compensation or operational control, employers face heightened risk of overtime liability, off‑the‑clock claims, and retaliation allegations. Keep Housing Truly Voluntary Housing benefits pose the least FLSA risk when employees are free to live onsite by choice rather than necessity. Requiring onsite residence as a condition of hire or continued employment strongly suggests that the arrangement exists for the employer’s benefit. Employers should ensure that employment offers, policy documents, and actual practices make clear that living onsite is optional and that declining housing has no effect on wages, scheduling, or job security. Separate Housing Benefits from Compensation Rent discounts must remain clearly distinct from wages. When discounts vary by job title, seniority, or responsibility, courts are more likely to view the housing as compensation rather than a fringe benefit. Uniform discounts—or discounts that are demonstrably unrelated to performance or availability—are easier to defend. Employers should avoid structuring housing benefits in ways that resemble pay incentives or substitutes for overtime compensation. Avoid Creating Implicit On‑Call Obligations Employees who live onsite are often perceived—by management or by tenants—as naturally available after hours. Even absent a formal on-call policy, this expectation can give rise to compensable work time. Employers should clearly define work hours, limit after-hours requests, and avoid relying on employees’ proximity as a substitute for staffing. Where on-call work is required, it must be clearly documented and compensated in accordance with the FLSA. Use Arms-Length Leasing Practices Treating employee residents the same as non-employee tenants reinforces the non-compensatory nature of housing benefits. Requiring standard rental applications, background checks, and lease agreements supports an arms-length relationship and reduces the argument that housing is a condition or incident of employment. Special treatment, guaranteed units, or waived leasing requirements undermine that distinction. Pay for All Time Worked—Including After Hours After-hours responses to maintenance calls, tenant complaints, or emergencies frequently constitute compensable work time. Employers should implement reliable timekeeping procedures that allow employees to record this work and should train supervisors to avoid discouraging accurate reporting. Failure to capture and pay for after-hours work remains one of the most frequent sources of FLSA liability in the property management context. Evaluate Whether Rent Discounts Affect the Regular Rate When onsite living primarily benefits the employer—by ensuring immediate coverage, enhanced security, or continuous availability—the value of a rent discount may be required to be included in the regular rate of pay for overtime calculations. Employers should evaluate housing arrangements holistically and seek legal guidance before excluding rent discounts from overtime calculations, particularly where onsite residence is expected or strongly encouraged. Bottom Line Onsite housing can be a lawful and effective benefit, but only when it functions as a voluntary perk rather than an operational necessity. When housing is mandatory, compensation-linked, or tied to unpaid availability, FLSA risks increase substantially. Careful program design, clear policies, and consistent compensation practices are essential to minimizing wage-and-hour exposure.
April 20, 2026
Understanding Pleading Technicalities Under the DC Rental Act
In Episode 3 of The DC Rental Act in Three Minutes, Offit Kurman attorneys Robert Donahue and Brian Dorwin break down one of the most consequential—and least understood—changes in the new law: how courts handle pleading technicalities. They explain that, under the prior legal framework, any defect in a filing—no matter how small—required the court to dismiss the case. A missing attachment, an outdated form, or a minor clerical error could derail a case at any stage, including on the morning of a jury trial after months of preparation. This rigid “shall dismiss” standard created costly delays and forced landlords to restart cases from scratch for issues that often had no impact on the merits. The Rental Act fundamentally reshapes this process. Judges now have discretion to determine whether a defect actually causes prejudice to either party. Instead of automatic dismissal, courts may allow amendments or permit the case to proceed when the issue is minor—such as a decade‑old RAD form with a technical flaw. For landlords, this means fewer restarts, fewer duplicative filings, and more efficient resolution of disputes. Robert and Brian emphasize that this shift—from shall dismiss to may dismiss—is one of the most practical improvements in the statute. It empowers judges to apply common sense, reduces unnecessary litigation costs, and allows attorneys to advocate more effectively when technical issues arise.
April 17, 2026
Labor and Employment
Responsible AI in HR Starts with Transparency and Trust
Artificial intelligence (AI) is increasingly positioned as a tool to help businesses better understand workforce trends, predict retention risk, and improve performance. Yet from the employee perspective, these same tools can feel intrusive. AI systems often pull sensitive data directly from HRIS platforms including, personal information, performance metrics, engagement signals, communications, and behavioral indicators. Without clear communication, employees may be left wondering what data is being collected, how it is being interpreted, and whether it could be used against them. In this context, transparency is essential: employees should understand not only what data is gathered, but why it is necessary and how it benefits both the business and the workforce. Employers, meanwhile, face their own set of risks. Many AI-driven workforce tools rely on third-party vendors, raising important questions about data ownership, retention, and security. Is employee data being stored indefinitely? Is it being used to train models beyond the scope of the employer’s relationship with the vendor? These concerns make careful contract review critical, particularly around data usage rights, confidentiality, and security safeguards. A practical guiding principle is data minimization: if data is not essential to achieving a clear business purpose, it should not be collected. Excessive data collection can increase legal and regulatory exposure without delivering proportional value. Ultimately, the issue of AI-driven employee monitoring extends beyond compliance to governance, risk management, and organizational trust. When employees believe they are being surveilled without sufficient guardrails and transparency, morale can erode and retention risks can grow. Businesses that use AI responsibly limit data collection and communicate openly with employees are better positioned to maintain employee confidence and foster a culture where technology supports, rather than undermines the workforce.
April 16, 2026
Labor and Employment
Jury Awards Employee $22.5 Million For Employer’s Improper Denial of Pregnancy Accommodation Request
When dealing with injured, sick, or pregnant employees, employers must exercise extreme diligence when denying an accommodation request; it is not as clear-cut as it might appear. The courts (and juries) tend to favor employees. Employers are simply playing with Fire with a capital “F” if an accommodation is denied without first consulting with experienced labor counsel. Take the Ohio state court case discussed below. On March 18, 2026, an Ohio jury awarded an employee $22.5 million dollars for her wrongful death claim against her employer for the loss of her child arising from the denial of her request for a pregnancy-related work accommodation. The jury found that the employer’s initial denial, of only two days, from her work-from-home request, was a substantial factor resulting in her baby’s death. The employee, a fairly new claims associate for a logistics company, was prescribed bed rest by her doctor after she suffered a serious complication related to her pregnancy; this was not in dispute. When she requested a temporary work-from-home accommodation, as was allowed to others, and provided supporting medical documentation, the company denied the request. Instead, it placed her on unpaid leave of absence. Because she and her family depended upon her paycheck and continued medical benefits, she was unwilling to forgo any paychecks and the employee quickly returned to in-office work. At the end of her second day, after the work-from home-denial, the employer reconsidered and said she could work from home. However, unfortunately, that night, after the second day of in-office work, she suffered severe medical complications resulting in her child being born too early; six hours after being born, her baby girl died. The employer’s counsel, we believe, of course, with hindsight, chose a disingenuous defense strategy that obviously offended and inflamed the jury, resulting in the huge verdict. Employer’s counsel conflated the employee having her mother drive her to work so she could ask her supervisor if she could work from home (which the supervisor said she could) and to pick up her computer so she could work at home, by saying she came to work and worked that day of her own volition. Then, when the human resources department overruled the supervisor and denied the employee’s request to work-from-home, it placed her on unpaid leave. When the employee, needing her pay and medical benefits, felt she had to come into work, the employer’s counsel faulted the employee for coming into the office rather than staying on unpaid leave. It became clear that the employer made an error and wrongfully considered the employee’s request as one for unpaid leave of absence. The baby’s estate filed a wrongful death lawsuit in February of 2023: Larkin v. Total Quality Logistics, LLC, (Hamilton County, Ohio). There is no reported decision, and the above alleged facts have been assembled from copies of the complaint and motions filed in the case; it will likely be appealed. We highlight this extreme case because it shows the real danger and consequences of the improper handling of an employee’s good-faith request for a reasonable work accommodation. If the employee suffers physical harm as a result of the denial, or even the unreasonable delay in approval, the employer may be on the hook not only for lost wages, but also the damages that flow from the denial/delay, including wrongful death, medical bills and costs, and pain and suffering. As this employee was relatively new and did not appear to even qualify for FMLA leave, which is unpaid leave, the employer was offering a leave of absence instead of allowing the employee to work from home. However, she had other causes of action under federal and state law. Under the Americans with Disability Act (ADA), 42 U.S.C. §12101 et seq., the Family Medical Leave Act (FMLA), 29 U.S.C. § 2601, et seq. and the Pregnant Workers Fairness Act (PWFA), 42 U.S.C. 2000gg et seq., covered employers are required to assess, through an interactive process with a covered employee, whether a suggested accommodation may allow an employee to fulfill their required job duties in a manner least burdensome on the business. To legally justify denying a reasonable accommodation request, an employer must demonstrate the accommodation would impose an undue hardship, meaning a substantial cost or difficulty, as determined by factors such as the nature and cost of the accommodation, the employer’s financial resources, and the impact on business operations. An employer does not have to create a new position for the employee, but where the disabled/pregnant employee could perform the essential functions of the job by working from home, an employer (especially a large employer, as this was) will have a difficult time justifying a denial. This case serves as a reminder that the stakes of these employment decisions are very high, and mistakes can lead to drastic consequences for both employee and employer. Employers should review employee job descriptions for accuracy and train supervisors on the accommodation process and what is required under the ADA, FMLA, and PWFA. As always, documentation is key. Experienced labor and employment counsel can help successfully navigate this process and should be contacted as soon as there is any discussion about the denial of an accommodation. A short phone call or two (or emails) with labor counsel before a denial could greatly increase the chances of avoiding liability, six figures of attorney’s fees, and serve to avoid harming an employee and his/her family.
April 16, 2026
Mergers and Acquisitions
M&A Nuggets: Take It Personally - It's Goodwill
A common quandary facing sellers taxed as C corporations is the double tax that will result from a sale structured as an asset purchase — one level of tax to the corporation on the sale of its assets and a second level of tax to the stockholders on distribution of the net proceeds from the sale. This double tax can equal close to 50% of the total purchase price. The best way to avoid the double tax is to convince the purchaser to engage in a stock sale. That, however, is not always possible. In that case, serious consideration should be given to whether a portion of the purchase price can be allocated to the personal goodwill of the seller’s owners, as opposed to company goodwill. Any part of the purchase price allocated to personal goodwill will be subject to one level of tax. An additional benefit to the seller is that amounts allocated to personal goodwill are subject to capital gains tax rates. From the purchaser’s viewpoint, it can deduct amounts attributed to personal goodwill over 15 years, which is the same result as with amounts allocated to company goodwill. Personal goodwill is the goodwill of the individual owner of the seller that results from the person’s unique expertise, reputation or relationship with vendors and/or customers. Personal goodwill does not exist in every business. Before agreeing to an allocation to personal goodwill, an analysis should be made to determine the likelihood that the allocation will withstand any challenge by the Internal Revenue Service. The most quoted personal goodwill legal case involved a distributor of ice cream products who sold part of his business to Häagen-Dazs. In that case, the court recognized that the most valuable asset of the business was the owner’s business relationships with the business’s customers; the success of the business depended entirely on the owner. Another important factor was that the owner did not have a non-compete agreement. The court held that the owner, not the company, sold his assets to Häagen-Dazs. If the factors identified by the court in the Häagen-Dazs case apply and personal goodwill exists, a seller can obtain a significant tax benefit. That would be a very nice dessert on top of the main event of the business sale.
April 16, 2026
Immigration Law
Understanding the EB 5 Program’s Critical Deadlines: What Investors Need to Know
The EB‑5 Immigrant Investor Program continues to be one of the most reliable pathways for families seeking permanent residency in the United States through investment. But with the passage of the EB‑5 Reform and Integrity Act (RIA), timing has become more important than ever. Two key dates—September 30, 2026, and September 30, 2027—now shape the strategic landscape for investors. Understanding the difference between these deadlines can help you protect your immigration process, secure your place in line, and avoid unnecessary risk. History of the EB‑5 Immigrant Investor Program The EB‑5 Immigrant Investor Program was created by Congress in 1990 to stimulate the U.S. economy through foreign investment and job creation, offering eligible investors and their families a path to permanent residency in exchange for investing in a new commercial enterprise that creates at least 10 full‑time U.S. jobs. In 1992, Congress introduced the Regional Center Program, allowing investors to participate in pooled, federally designated projects and count indirect job creation, which dramatically expanded the program’s reach and popularity. Over the decades, EB‑5 has undergone significant reforms, most notably the 2022 EB‑5 Reform and Integrity Act, which modernized oversight, increased investment thresholds, and introduced strong integrity measures. September 30, 2026, Grandfathering Deadline Under the RIA, any EB‑5 Regional Center petition filed on or before September 30, 2026, receives powerful “grandfathering” protection. This means: USCIS must continue processing your petition even if the EB‑5 Regional Center Program expires in the future Your case remains valid under the rules in place at the time of filing You are shielded from political uncertainty, program lapses, or regulatory changes that could otherwise disrupt your immigration process For many families, this date represents the safest window to file. Submitting an I‑526E petition before the 2026 deadline locks in today’s requirements and ensures your case cannot be altered by future program interruptions. September 30, 2027, Program Authorization Deadline The EB‑5 Regional Center Program is currently authorized through September 30, 2027. Investors may still file after the 2026 grandfathering deadline and before the 2027 program expiration. However, filings made between October 1, 2026, and September 30, 2027, do not receive the same guaranteed protection. If Congress fails to reauthorize the program after 2027: Petitions filed after September 30, 2026, may be paused or left unprocessed Investors could face delays, uncertainty, or the need to refile under new rules Investment thresholds or program requirements could change In short, you can file until 2027, but only filings made by 2026 are guaranteed protection. Why Investors Should Act Before 2026 Filing before the September 30, 2026, grandfathering deadline offers several advantages: Guaranteed case processing, regardless of future political developments Earlier priority dates, which matter for investors from backlogged countries Protection from future rule changes, including potential increases in investment amounts Reduced risk of delays caused by last‑minute filing surges Given the long‑term nature of the EB‑5 process, securing stability early is often the most prudent choice. Investment total increases and potential fee increase in 2027 January 1, 2027, is another critical date for potential EB-5 investors, as at that point, the USCIS can increase the investment totals under RIA. In addition, new fees and changes to the program are also possible. What This Means for You If you are considering the EB‑5 program, the next 18–24 months represent a uniquely important window. Filing before the 2026 deadline provides the strongest legal protections available under current law. Filing after that date remains possible but carries more uncertainty. Whether you are just beginning your EB‑5 journey or evaluating project options, now is the time to understand your timeline and prepare your strategy.
April 16, 2026
Commercial Litigation
Developments in IEEPA Refund Litigation
Through multiple court filings, the U.S. Customs and Border Protection (CBP) and the U.S. Court of International Trade (CIT) have identified significant updates affecting importers seeking refunds of additional ad valorem duties imposed under the International Emergency Economic Powers Act (IEEPA). These developments signal meaningful progress toward a structured refund process, while also highlighting critical compliance steps importers must take now to preserve potential recovery. CBP Update: CAPE Refund Functionality Progress CBP continues to develop a new refund-processing capability within the Automated Commercial Environment (ACE) collections framework, officially named the Consolidated Administration and Processing of Entries (CAPE). This system is designed to automate and streamline the administration of IEEPA-related duty refunds. As of March 19, 2026, CBP reported the following progress: Claim portal: 73% complete Mass processing: 45% completeOngoing development includes ACE validations and event history tracking Review and liquidation/reliquidation: 80% complete Refund processing: 63% complete Once implemented, CAPE is expected to significantly improve efficiency, with CBP estimating a reduction of over 4 million labor hours compared to manual processing. The system is intended to facilitate more timely and accurate refunds for importers. CIT Update: Continued Stay and Guidance on Entry Status On March 20, 2026, the CIT issued an order continuing its prior stay (initially imposed March 4, 2026) and provided further clarification regarding treatment of entries. CBP is directed to reliquidate: Unliquidated entries; and Entries liquidated but not yet final (i.e., within 90 days of liquidation) For entries approaching or within the 180-day protest window:The CIT emphasized that importers "should be aware" of available protest remedies (under 19 U.S.C. § 1514(a)) Scope Expansion:The court amended its prior orders to encompass all IEEPA duties imposed, including those on imports from Brazil and India Notably, the CIT did not resolve whether refunds will be available for entries that are already liquidated and beyond the 180-day protest deadline, where a protest was not filed. It is important to note that the implication before this order indicated that liquidation dates were no longer relevant, however the court’s specific reference to 19 U.S.C. § 1514(a) seems to signal that failure to file a protest COULD result in forfeiting your claim. Therefore, get documents early, and file the protest if you are within the 180-day window to avoid uncertainty. Ultimately, it is a “belt and suspenders” remedy that is worth the extra time. Key Takeaways for Importers Categorize Entries Immediately The availability of refunds may depend on the liquidation status of entries. Importers should promptly identify and classify entries into the following categories: Unliquidated entries Entries liquidated within the 180-day protest period Entries liquidated beyond 180 days:With a filed protest Without a properly filed protest Current law generally provides: CBP may reliquidate within 90 days of liquidation Importers may file protests within 180 days After 180 days, liquidation is typically considered “final and conclusive” Accordingly, entries beyond the protest period may face significant barriers to recovery. Prepare for CAPE by Confirming Electronic Refund Capabilities on the ACE Portal CBP’s Interim Final Rule on Electronic Refunds (effective February 6, 2026) requires that all refunds be issued electronically. Despite approximately 330,000+ importers having paid IEEPA duties or deposits, only about 21,400 entities had completed electronic refund setup as of early March. CBP has already been unable to process 7,700 refunds for nearly 2,900 importers due to incomplete or improper setup. Important to Note Refund claims will be rejected if the importer has not enabled electronic refund capability in ACE. Importers should immediately confirm: ACE portal access Banking and payment configurations Coordination with customs brokers, where applicable Access the Electronic Refund Enrollment in CBP's ACE Portal here. Looking Ahead CBP’s CAPE system represents a major step toward modernizing the refund process for IEEPA duties, but key legal and procedural uncertainties remain, particularly regarding entries that may already be final under U.S. customs law. In the near term, importers should prioritize entry review and classification, preservation of protest rights where applicable, and completion of ACE electronic refund setup.
April 15, 2026
Commercial Litigation
When Small Disputes Become Big Lawsuits — and How to Avoid Them
Lawsuits don’t just appear out of thin air. They begin as ordinary disagreements that, with the right handling, can, and should, often be resolved quickly. But once litigation is filed, particularly against someone who did not choose the fight, even a “simple” dispute can escalate far beyond its original scope. A recent matter illustrates this issue. What began as a delay in closing on the sale of an investment property, typically a straightforward transaction, quickly spiraled when the other side refused to negotiate and instead filed suit. Once litigation began, control shifted immediately. A third party was involved, attorney’s fees became an issue, and what should have remained a limited dispute turned into multiparty litigation with rising costs and complexity. At that point, the defendant had no ability to simply walk away. How Could This Have Been Prevented? One of the most misunderstood aspects of litigation is once a lawsuit is filed, defendants generally cannot unilaterally end it. Even weak or disproportionate claims require a formal response, legal expense, and tolerance for uncertainty. Delay for its own sake becomes leverage, particularly when one side can impose costs without bearing them equally. As communication breaks down, distrust grows, and positions tend to harden rather than soften. Several steps could have prevented this dispute from escalating, with early engagement being critical. Transparency about contributing factors and consistent documentation of communications would have reduced uncertainty and suspicion. Even though the underlying issue could not be immediately resolved, a solutions‑oriented dialogue focused on timing, contingencies, or limited accommodations might have preserved trust. Instead, silence and rigid positioning filled the gap, creating space for assumptions that ultimately drove the decision to litigate. There are common warning signs that a manageable disagreement is becoming something more dangerous: Communication may slow and then stop altogether Deadlines are ignored or used strategically Tone shifts from cooperative to adversarial Demands become rigid rather than exploratory Positions are framed in absolutes rather than options Recognizing these red flags early creates an opportunity to intervene before litigation becomes the default, not because it is the best solution, but because it feels like the only one left. In this case, progress came only after the focus shifted away from fault and toward risk, cost, and practicality. Once all parties understood what continued litigation meant, namely the expense, time commitment, and uncertainty of trial, the dialogue reopened. That reframing made it possible to resolve the dispute without going to court, an outcome none of the parties truly desired and one that would not have materially benefited anyone. The outcome did not turn on who was right. It turned on what made sense. The Takeaway Small disputes rarely explode overnight. They escalate through silence, an insistence on being “right,” and missed opportunities for early, practical resolution. For defendants who cannot simply dismiss a case at will, early engagement and a clear‑eyed assessment of real‑world consequences are often the most effective tools to prevent a manageable dispute from becoming something far larger than it ever needed to be.
April 15, 2026
Estates and Trusts
LGBTQ+ Estate Planning —A Tale of Two Couples
Chris and Jason would never leave anything to chance. They ordered their movie tickets online in case the show sold out before they got to the theater. They always bought travel insurance, on the off chance their vacation plans didn’t pan out. They flossed daily, replaced smoke-detector batteries annually, and changed their furnace filters every six months. Their friends Bill and Trevor often teased them about being so conscientious. But then Bill and Trevor took a different approach to life. When Bill got a flat tire and needed to use the spare, he discovered that it was flat, too. They once ran out of heating oil because Trevor forgot to order more. And they still laugh about the time they missed their cruise ship departure after enjoying one too many rum swizzles at a pub in Bermuda. These differences extended to the way they approached estate planning, too. Chris and Jason went to an estates and trusts attorney who was a fellow member of the LGBTQ+ community. After getting to know them, the attorney prepared wills that left everything to the survivor in case Chris or Jason died. He also drafted a power of attorney and advance healthcare directive for each of them. These documents would be essential, the lawyer explained, if Chris or Jason became incompetent and needed the other spouse to manage his finances or health care. Chris and Jason knew this paperwork was important and were glad to have it prepared by a professional. What they didn’t know was that there was more to estate planning than that. The lawyer included language in their documents to cover their digital assets—things like frequent-flyer miles, social media accounts, and online shopping. The lawyer had them make an inventory of these assets, including their usernames and passwords, so the other spouse could access them if necessary. The inventory even included passwords for things like their laptops, smartphones, and iPads. They were also told to make sure the beneficiaries on their life insurance and retirement accounts were up to date to replicate the provisions in their wills. Once the documents had been signed, Chris and Jason slept better. They knew they were as ready as they could be for whatever lay ahead. Bill and Trevor, by contrast, did none of these things. They hadn’t gotten married or registered as domestic partners, thinking that having “a piece of paper” wouldn’t improve their relationship. They had been meaning to get wills but thought the process would be difficult and expensive. They also didn’t want to think about the worst-case scenarios an estate plan was meant to cover. Then the unexpected happened. On a rainy Sunday afternoon, Bill’s car skidded off a slippery road and into a tree. His death was instant, and Trevor was suddenly faced with the very scenario he had been so reluctant to confront. Because he had no will, Bill’s estate passed through “intestacy.” This meant that as an unmarried partner, Trevor inherited none of Bill’s assets, except the house they owned jointly. Surprisingly, his car and bank accounts went to Bill’s mother. Bill had failed to name a beneficiary on his IRA, and because he and Trevor had never married, the money went to Bill’s estate. This meant that Bill’s mother also received this substantial asset. Bill had life insurance through his job, but he had set it up before he and Trevor met. The beneficiary was Bill’s ex-boyfriend, so Trevor was entitled to none of the payout. To add insult to injury, Trevor had no way to access Bill’s laptop or iPad, which were both password-protected, or to listen to the messages that friends had left on Bill’s phone when they heard about the accident. It has been said that hindsight is always 20/20. If Bill and Trevor could start over, what would they do differently? They still might have stayed for that extra rum swizzle at the pub in Bermuda—that made for a good story. But they would definitely have called their friends’ lawyer and had him prepare an estate plan for the two of them, rather than leave anything to chance.
April 15, 2026
Intellectual Property
Spring Cleaning Your Trademark Portfolio: A Plain-English Guide for In-House Teams
Most companies accumulate trademark assets gradually and unevenly. New products are launched, old brands linger, and registrations are filed opportunistically rather than strategically. Over time, the portfolio reflects history more than the current business. For in-house counsel, this creates a familiar challenge. The company technically owns trademark rights, but it is often unclear which marks still matter, which are vulnerable, and which quietly create risk. A portfolio that appears “complete” on paper can hide gaps, inconsistencies, and inefficiencies that surface at the worst possible moment: during enforcement, diligence, licensing, or an international expansion. Spring provides a useful opportunity to take stock. The goal is not to rebuild the portfolio from scratch; it is to bring it back into alignment with how the business actually operates. This kind of annual review helps ensure that legal protection supports the company’s current operations and future plans rather than merely documenting past decisions. Do Your Core Marks Still Reflect Actual Use Trademark rights are tied to use, not intention. Branding evolves. Logos are refreshed, taglines change, and product names drift. Registrations often lag behind these shifts. The risk is not that branding has evolved. The risk is relying on registrations that no longer reflect what customers actually see in the market. When a registration does not match current usage, enforcement becomes more difficult, and internal teams may assume protection exists where it is uncertain. A basic review should confirm that the most important marks are being used in substantially the same form as registered. It should also check that the listed goods or services accurately describe the current business. Marks that are materially altered, extended beyond their registered scope, or used in ways not captured by the registration require attention. This step turns trademark oversight into a practical, operational exercise rather than a purely administrative task. Which Marks Are Still Worth Keeping Many portfolios contain registrations for discontinued products, legacy brands, or marks that were filed defensively and then forgotten. Every registration carries cost and maintenance obligations. Beyond the expense, unused or marginal marks can complicate enforcement strategy and raise questions during due diligence or audits. Spring cleaning is an opportunity to categorize the portfolio. Identify which marks are core to current business operations, which are legacy or historical, and which can be allowed to lapse without meaningful risk. This process helps focus resources where they matter most and avoids creating confusion for internal teams or third parties. Marks that are no longer strategically relevant can be retired deliberately, reducing administrative burden and clarifying enforcement priorities. Where Are the Coverage Gaps Business growth almost inevitably creates gaps. New products are launched under existing brands, services expand beyond their original scope, and companies enter new jurisdictions without confirming local protection. Gaps often remain invisible until a triggering event, such as a competitor conflict, a transaction, or an international rollout brings them to light. For in-house counsel, the goal is not to eliminate every potential gap. It is to understand where gaps exist, evaluate their significance, and determine whether they matter given near-term business plans. Some gaps may be acceptable if they pose minimal risk in the short term, while others require immediate action to preserve enforceable rights. Early awareness allows counsel to advise the business proactively rather than reacting to surprises later. Is Internal Usage Undermining Your Rights Even strong registrations lose value when internal usage is inconsistent. Teams may shorten, alter, or combine marks with other terms. Brand names are sometimes used as nouns or verbs. Third parties within the company or among partners may be permitted to use marks without clear guidance. None of this creates immediate failure. Over time, however, inconsistent or uncontrolled use can weaken distinctiveness and enforcement posture. Marks lose their legal strength if they are not used deliberately and consistently. A portfolio review should include a high-level assessment of whether the company is applying its most important marks intentionally, across products, marketing materials, packaging, digital channels, and communications. Ensuring consistent internal usage is often as important as confirming the technical legal status of the registration. Would the Portfolio Make Sense to a Third Party A useful thought experiment is to imagine a buyer, lender, or auditor reviewing the portfolio for the first time. Would the portfolio tell a coherent story about the business or raise questions that require explanation? Would the marks, filings, and strategic choices make sense in the context of current operations and future plans? Spring cleaning is less about perfection and more about narrative. A portfolio that clearly reflects current operations and priorities is easier to defend, easier to budget, and easier to explain in high-stakes settings. It signals to third parties that the company manages its brand assets deliberately, maintains consistent internal practices, and aligns legal protection with business strategy. For in-house counsel, this type of review does not require specialized trademark expertise. It requires judgment, prioritization, and coordination with business teams. Done annually, it reduces surprise risk, strengthens enforcement leverage, and makes downstream trademark decisions easier. It also provides a documented rationale for why certain marks are maintained, altered, or allowed to lapse, which can be invaluable during diligence, licensing, or strategic planning. Turning Review into Action The value of a portfolio review lies in translating findings into actionable steps. Examples of typical follow-up actions include: Confirming continued use and alignment of core marks with registrations Retiring or abandoning legacy marks that no longer support the business Flagging gaps that could affect new products, services, or international expansion Providing clear internal guidelines for consistent usage and escalation Prioritizing filings for marks that require additional protection or international coverage This does not need to be complicated. Even a lightweight process ensures that legal and business teams share the same understanding of which marks are critical, which are optional, and which require attention in the coming year. A Strategic Perspective for General Counsel Most general counsel do not need to manage every registration or conduct searches themselves. They do need to understand where risk accumulates quietly and intervene before it becomes material. Annual portfolio reviews place trademark oversight in a strategic context rather than a reactive one. They provide clarity on enforcement priorities, highlight potential risks, and align the portfolio with the company’s current business objectives. A clean, well-aligned portfolio preserves flexibility. It makes enforcement more straightforward, supports licensing and expansion, and provides confidence in transactions or audits. By establishing a structured, annual review process, general counsel will ensure that trademark assets function as living business tools rather than static records of past filings. The Objective of Spring Cleaning The objective is not perfection; it is awareness, alignment, and control. It is ensuring that the portfolio accurately reflects the business, highlights strategic priorities, and allows legal protection to support, not hinder operations and growth. When conducted annually, spring cleaning transforms the trademark portfolio from a collection of filings into a coherent, actionable asset that contributes to the company’s long-term value.
April 13, 2026
Landlord Representation
Deregulation Is Not Immunity: How Fragmented Federal Enforcement Is Reshaping Fair Housing Compliance
One of the most overlooked developments in 2026 is how enforcement has splintered across federal agencies—each operating independently of HUD’s policy posture. HUD’s rescission of numerous guidance documents and the federal government’s recalibration of civil rights priorities do not eliminate risk for housing providers. Instead, the landscape has shifted and spider-webbed across multiple agencies, a few of which are outlined below along with their impact on multifamily housing. HUD Office of Inspector General (OIG) HUD OIG operates under a statutory mandate untethered from HUD’s guidance priorities. Its recent semiannual report* reflects aggressive audit and enforcement activity, including: 64 administrative sanctions Over $219 million in questionable spending Nearly $600,000 recommended for better use of funds OIG audits routinely examine tenant files, eligibility determinations, and internal controls. Poor site-level documentation by housing providers can trigger repayment demands and referrals. Social Security Administration (SSA) The SSA has ramped up investigations into identity fraud in housing, issuing subpoenas and, in some jurisdictions, executing search warrants connected to benefit misuse and rental fraud schemes. Property management companies may soon find themselves caught in SSA investigations due to fraud perpetrated by applicants who use misappropriated or manufactured documents. Department of Homeland Security (DHS) and Immigration Verification HUD has recently proposed increasing citizenship and immigration verification requirements for occupants in federally assisted housing, seemingly, promptly after compiling a joint eligibility report with DHS. HUD’s February 2026 proposed rulemaking would require eligibility verification for all household members regardless of age, effectively ending prorated assistance for mixed‑status households. This push in enforcement carries serious fair housing risks. While housing providers must follow federal eligibility rules precisely, selective enforcement, retaliation, or national‑origin discrimination remain unlawful under the Fair Housing Act. Providers must ensure uniform application and airtight communications with residents. HUD’s Criminal Screening Rules Changed—The Risk Didn’t HUD’s withdrawal of several guidance documents—most notably its criminal screening and assistance animal guidance—reflects a policy shift, not a legal repeal. The Fair Housing Act (“FHA”) remains the governing statute and courts have previously upheld judicial decisions grounded in disparate impact, reasonableness, and evidentiary justification. Criminal screening remains one of the most common fair housing complaints, particularly because criminal history policies may disproportionately affect certain protected classes. However, HUD has formally rescinded its 2015–2022 criminal screening guidance, including its Office of General Counsel memoranda emphasizing individualized assessments and discouraging reliance on arrest records. In addition, HUD has signaled a renewed focus on safety in federally assisted housing and stricter enforcement of criminal activity at these properties (e.g., “one strike” rules). However, housing providers should not misread the recent rescission as a green light for blanket bans on criminal history. Courts, and state-level administrative enforcement agencies, continue to rely on the same legal frameworks that underpinned the rescinded guidance. Judicial decisions still reject universal criminal history bans, require a logical nexus between a criminal conviction and potential housing risk, and scrutinize whether a policy is necessary to achieve a legitimate interest. Providers that assume HUD’s silence equals judicial approval do so at their peril. Practical Considerations for Applicant Criminal Screening Avoid blanket exclusions based on “any conviction” Tie disqualifying convictions to specific, defensible housing risks Consider the offense severity and recency of the conviction Document individualized decision‑making and review mitigating evidence Ensure screening vendors follow lawful, jurisdiction‑specific processes Most enforcement actions do not originate in boardrooms; they begin with frontline interactions in leasing offices. Preparing for the Next Enforcement Cycle—Not Just This One The safest compliance posture in 2026 is continued adherence to existing statutes and regulations, not shifting with agency guidance. Providers should assume that every decision may one day be reviewed by a different agency, or a different administration. Strong policies grounded in law, evidence, and consistency future‑proof operations against political change, regulatory whiplash, and reputational harm. Sub‑regulatory guidance can be rescinded quickly by HUD, but it can be reissued just as easily by a future administration. Conduct occurring today will still be evaluated under existing statutory and case law standards. Providers that loosen policies now may face substantial exposure later through private litigation, changes to state and local enforcement, or renewed federal scrutiny. Change is the name of the game in 2026. Risk has shifted, not vanished. Housing providers that confuse deregulation with immunity may face harsh consequences when enforcement resurges. *Semiannual Report to Congress For the Period April 1, 2025, to September 30, 2025
April 13, 2026
Labor and Employment
How to Use Contractors and Gig Workers Safely: Navigating DOL Classification Standards in a Changing Enforcement Climate
The use of independent contractors and gig workers remains an attractive and, in many industries, essential component of modern workforce strategy. Flexibility, cost control, and scalability continue to drive businesses toward non-employee labor models. At the same time, the legal framework governing worker classification has become more exacting, more nuanced, and more actively enforced. Misclassification is no longer a technical compliance issue. It is a material risk with significant financial and reputational consequences. Understanding how to engage contractors safely requires more than a surface-level application of outdated tests. It requires a disciplined, fact-specific analysis grounded in current U.S. Department of Labor standards and enforcement priorities. The DOL’s Economic Reality Test: Substance Over Form The governing framework under the Fair Labor Standards Act is the economic reality test, as refined by recent Department of Labor rulemaking. The inquiry is not determined by contractual labels or the parties’ stated intentions. It turns on whether, as a matter of economic reality, the worker is dependent on the business or is operating an independent enterprise. While the analysis remains holistic, several core factors consistently guide the determination. The degree of control exercised by the company is often central. Where a business dictates how, when, and where work is performed, classification as an independent contractor becomes increasingly difficult to sustain. Equally significant is the worker’s opportunity for profit or loss based on managerial skill. Independent contractors typically can increase earnings through initiative, investment, or business judgment. Workers paid on a fixed or standardized basis, without meaningful entrepreneurial discretion, present heightened risk. The permanence of the relationship also carries weight. Open-ended or indefinite engagements resemble traditional employment relationships, particularly where the worker is integrated into ongoing operations. Investment in tools and resources, the degree of skill required, and whether the work is integral to the business’s core function all further inform the analysis. No single factor is dispositive. However, in practice, patterns emerge. Where multiple factors point toward economic dependence, the likelihood of misclassification findings increases substantially. Why Misclassification Risk Is Rising Recent enforcement trends reflect a clear and consistent priority. Federal and state agencies are increasingly aligned in scrutinizing contractor arrangements, and plaintiffs’ counsel continue to leverage classification issues as a gateway to broader wage-and-hour claims. Misclassification rarely exists in isolation. It often gives rise to allegations involving unpaid overtime, minimum wage violations, failure to provide benefits, and tax exposure. In collective or class contexts, liability can scale rapidly. In addition, state law frameworks, including ABC-style tests in certain jurisdictions, impose stricter standards than federal law. A classification that may be defensible under federal guidance can nonetheless fail under applicable state requirements. This layered regulatory environment requires a coordinated approach. A one-size-fits-all model is no longer viable for employers operating across multiple jurisdictions. Common Missteps That Create Exposure A recurring issue in contractor engagements is the reliance on form over function. Well-drafted independent contractor agreements, standing alone, do not establish compliance. Agencies and courts consistently look beyond contractual language to the realities of the working relationship. Similarly, classification decisions driven by business preference rather than legal analysis create significant exposure. The fact that a contractor model is operationally convenient, or industry common does not insulate it from challenge. Another frequent concern arises where contractors are treated, in practice, like employees. Requiring adherence to internal policies designed for employees, imposing rigid schedules, or integrating contractors into core teams without distinction undermines the independence necessary to support proper classification. Finally, the use of long-term, exclusive contractor relationships presents elevated risk, particularly where the individual does not meaningfully market services to other clients. Practical Strategies for Structuring Compliant Relationships Mitigating classification risk requires alignment between documentation and day-to-day operations. Engagements should be structured to reflect genuine independence. This includes defining project-based scopes of work, preserving contractor discretion in how services are performed, and avoiding unnecessary control over scheduling or methods. Compensation models should, where appropriate, allow for variation based on performance, efficiency, or business judgment, rather than mirroring employee wage structures. Businesses should also evaluate whether contractors are making meaningful investments in their own operations, including tools, equipment, or business infrastructure. Regular audits are essential. Classification determinations made at the outset of a relationship may become outdated as the engagement evolves. Periodic review allows employers to identify and address risks before they mature into liabilities. Importantly, compliance strategies must account for both federal and state standards. Where stricter state tests apply, those frameworks should govern the analysis. The Strategic Imperative The continued expansion of the gig economy ensures that contractor relationships will remain a focal point of regulatory and litigation activity. Employers who approach classification as a static, check-the-box exercise are increasingly vulnerable. Those who treat it as an ongoing, strategic consideration are better positioned to manage risk effectively. The distinction between an employee and an independent contractor is, at its core, a legal conclusion drawn from operational realities. Aligning those realities with governing standards requires careful planning and informed judgment. For organizations seeking to preserve flexibility while minimizing exposure, experienced counsel is not simply beneficial; it is essential. Proactive structuring, informed by current enforcement priorities, remains the most reliable way to avoid costly disputes and to ensure that workforce models withstand scrutiny when it matters most.
April 10, 2026
Landlord Representation
Navigating DC's Rental Act: Changes in Eviction
In Episode two of The DC Rental Act in Three Minutes, Offit Kurman attorneys Brian Dorwin and Gwen Roy Harrison examine key changes to eviction procedures under the new Rental Act, with a focus on public safety cases. They explain how, under the prior law, landlords were required to issue a 30‑day notice with an opportunity to cure—and often had to wait for repeated misconduct—before filing an eviction. In situations involving violent or dangerous behavior, this left landlords and residents with limited immediate protection. The Rental Act introduces a major shift: a 10‑day notice to vacate with no cure provision for tenants alleged to have committed a dangerous crime or crime of violence. Landlords are no longer required to wait for a criminal conviction before acting, allowing for faster responses to serious threats. Brian and Gwen also note that many questions remain. Because the Act took effect so quickly and reshaped nearly every part of landlord‑tenant court, DC Superior Court and agencies are still interpreting how these provisions will work in practice. Early rulings in 2026 will be critical in shaping how the law is applied.
April 9, 2026
Family Law
What Happens to Debt in Divorce if a Spouse Files Bankruptcy?
Divorce and bankruptcy are both stressful on their own, but when they overlap, things can become especially complicated. Understanding how these two legal processes interact is critical, particularly when dividing debt. Divorce cases are handled in family court, where a judge determines how marital property and debt should be divided. Bankruptcy, on the other hand, is handled in federal court and focuses on eliminating or restructuring debt. Because these are separate legal systems, one does not automatically control the other, but bankruptcy can significantly impact the outcome of a divorce. In many states, debts incurred during marriage are generally considered marital debt, regardless of whose name is on the account. The court may assign responsibility for certain debts to one spouse, but bankruptcy may impact things. If your spouse files for bankruptcy, especially Chapter 7 or Chapter 13, it may affect debts addressed in your divorce. For instance, if your spouse is assigned a marital debt in the divorce but later files for bankruptcy, they may be able to discharge (eliminate) their obligation to pay. Even if the divorce decree says your spouse must pay a debt, creditors are not bound by that order. If your name is also on the account, the creditor may still pursue you for payment. If your spouse discharges the debt in bankruptcy, the creditor may turn to you for full payment, even if the divorce said otherwise. Not all debts may be discharged through bankruptcy. Under federal law, certain divorce-related debts, like child support, alimony/spousal support, and some other obligations arising from a divorce agreement, may not be dischargeable. The timing of a bankruptcy filing is also important. Filing for bankruptcy before filing for divorce may simplify the divorce by eliminating certain debts ahead of time, or it may appear fraudulent and complicate the matter. A bankruptcy filing can pause parts of the divorce proceedings, particularly those involving property division. A spouse may try to discharge debts assigned to them, potentially shifting financial responsibility back to the other spouse. If bankruptcy is a possibility in your divorce, you should discuss strategies with your family and bankruptcy attorneys, such as closing joint accounts, refinancing/transferring debt into one name when possible, and seeking indemnification clauses in the divorce agreement. While a divorce decree may assign responsibility for debt, it does not eliminate your liability to creditors. If your spouse files for bankruptcy, you could still be on the hook for joint debts, regardless of what your divorce agreement says.
April 8, 2026
Healthcare
The CMS ACCESS Model and FDA TEMPO Pilot: Outcome‑Based Payments and Digital Health Innovation
The Centers for Medicare & Medicaid Services’ ("CMS") Advancing Chronic Care with Effective, Scalable Solutions ("ACCESS") Model is a Center for Medicare and Medicaid Innovation ("CMMI") initiative testing outcome-aligned payments ("OAP") tied to measurable improvements in clinical and patient-reported outcomes for Medicare Part B providers. The Food & Drug Administration’s ("FDA") Technology-Enabled Meaningful Patient Outcomes ("TEMPO") pilot program is aligned with and runs concurrently with ACCESS, creating a digital-health technology for Medicare and supporting the introduction of new digital-health technologies so they can be used to support the measurable outcomes for ACCESS. It is important to note that although technology is a crucial component of these models, care delivery remains the core of the model, with digital tools positioned as enablers rather than substitutes. All ACCESS participants must be Medicare Part B enrolled and in good standing, with no flexibility on this requirement. Participants must also designate a Medicare-enrolled medical director responsible for clinical oversight and patient safety. For many digital-health companies, enrolling as a Medicare provider or supplier could represent a significant shift in compliance requirements, including a commitment to ongoing compliance with state and federal laws, as well as heightened fraud, waste, and abuse risks associated with federal healthcare programs. It is likely that CMS may favor ACCESS applicants with prior patient volume, including Medicare-eligible populations, and geographic reach, particularly those that demonstrate operational readiness and the ability to scale. Participation in ACCESS requires full accountability across clinical tracks and comorbidities. Those organizations which participate must be able to manage all conditions within each selected track and report required clinical data, emphasizing “whole person care” and guideline-based management to account for the fact that many chronic conditions are comorbid and occur in the same beneficiary. Participants must also be able to escalate care when necessary, which CMS frames as a patient-safety feature of the model. ACCESS's payment structure introduces substantive downside risk and favors financially stable organizations by providing quarterly, per-beneficiary payments during a 12-month care delivery period, but only 50% of the OAP is paid upfront. The remaining 50% is withheld and subject to reconciliation. During the reconciliation period, CMS will apply a downward adjustment to the withheld amount based on the larger of: Clinical-outcomes performance (up to a 50% reduction of the full OAP), or Substitute-spend impacts (up to a 25% reduction of the full OAP). This structure allows CMS to support care delivery with predictable payments while maintaining accountability for outcomes and spending. Due to the payment structure, CMS is likely to favor applicants that can absorb the associated financial risk. Under TEMPO, manufacturers may request temporary FDA enforcement discretion for certain regulatory requirements when devices are used in ACCESS, which could allow some digital-health devices to be used within the model prior to full FDA authorization. The FDA is contemplating discretion related to premarket authorization and certain investigational device exemption, informed consent, or institutional review board requirements, but has not indicated that such discretion would extend to core device controls such as quality-system or adverse-event reporting obligations. Manufacturers may email the FDA to express interest, identify their device’s current regulatory status, and specify which requirements from which they are seeking relief. Participation is limited to 10 United States-based manufacturers per clinical track and is only available to manufacturers with devices in the four clinical access areas. Manufacturers must collect and share real-world data with the FDA during the pilot.
April 7, 2026
Intellectual Property
USPTO Issues Final Rule Requiring U.S.-Registered Patent Practitioner Representation for Foreign Applicants and Patent Owners
The United States Patent and Trademark Office (USPTO) has issued a Final Rule, published March 20, 2026, requiring all foreign-domiciled patent applicants, inventors, and patent owners to be represented by a U.S.-registered patent attorney (a lawyer who has passed the patent bar exam) or patent agent (a non-lawyer who has passed the patent bar exam) for all submissions made to the Office. U.S.-domiciled applicants, inventors, and patent owners may still proceed pro se. Beginning July 20, 2026, the USPTO will enforce a major procedural change that affects any patent application listing even one inventor, applicant, or owner whose domicile is outside the United States. If any named party is foreign-domiciled — even if others are U.S.-based — the entire application will now require representation by a U.S.-registered patent attorney or patent agent. Foreign law firms and companies with global R&D teams, cross-border collaborations, foreign subsidiaries, international research fellows, or joint development partners must ensure that a registered U.S. practitioner is engaged from the start. Many organizations will be surprised to learn that “foreign” is defined not by citizenship, but by where an inventor or entity legally resides or operates their principal place of business. A single foreign-domiciled contributor on a project can trigger the new representation requirement. The rule is designed to curb fraud, increase filing accuracy, and harmonize U.S. practice with nearly all major foreign patent offices — and it represents one of the most significant shifts in U.S. patent procedure in a decade. It parallels (but is distinct from) the USPTO’s 2019 trademark rule requiring U.S. counsel for foreign trademark applicants, reflecting a broader USPTO effort to reduce fraudulent pro se filings and strengthen enforcement. Key Features of the Final Rule Mandatory U.S.-Registered Practitioner Representation Foreign-domiciled applicants and owners, defined by domicile rather than citizenship, must be represented by a registered practitioner in good standing before the USPTO. Domicile includes a natural person’s permanent legal residence and a juristic entity’s principal place of business. The requirement applies broadly to new applications as well as to amendments, Information Disclosure Statement (IDS) submissions, Application Data Sheet (ADS) filings, petitions, priority and benefit claims, and micro-entity certifications. Only registered practitioners who have passed the USPTO examination may represent others in patent matters. Filing Date vs. Substantive Requirements A foreign-domiciled inventor may still obtain a filing date without practitioner representation, but key components of the application, such as priority claims, ADS information, micro-entity filings, and other required papers, will not be accepted until a U.S. practitioner is appointed. This creates an important procedural distinction between patent and trademark practice. Enforcement Mechanisms The USPTO will enforce the rule through several mechanisms. Unsigned or improperly signed filings will not be entered into the record, and the Office may issue Notices of Non-Compliant Representation requiring the applicant to appoint a practitioner within a specified period. Fraud mitigation is a central driver of the rule, as requiring registered practitioners allows the USPTO to pursue misconduct even if an application is later abandoned. Efficiency and Resource Allocation The rule also reflects a focus on efficiency and resource allocation. By reducing the number of procedurally defective filings submitted by foreign pro se applicants, the USPTO aims to decrease the examiner time spent correcting errors and to lessen the burden on the Office of Patent Application Processing. Why the USPTO Implemented This Rule The USPTO has identified several reasons for implementing this change. First, the rule promotes global harmonization, as most major intellectual property offices, including those in Europe, Japan, China, and Korea, already require foreign applicants to be represented by locally authorized practitioners. Second, it addresses a growing trend of fraud and misrepresentation, including false micro-entity certifications, inaccurate inventor or owner listings, and filings submitted through unregulated intermediaries overseas. Because registered practitioners are subject to ethical rules, reporting obligations, and disciplinary oversight, the USPTO gains enforcement leverage that is not available when dealing with foreign pro se filers. Third, the rule is intended to improve accuracy and efficiency, as pro se filings often require correction, clarification, or substantial examiner intervention, and representation at the outset improves application quality and reduces delays. Comparison With the 2019 USPTO Trademark Counsel Rule The USPTO’s 2026 patent rule closely mirrors the 2019 trademark counsel requirement in purpose, as both are designed to reduce fraudulent filings, improve compliance with U.S. legal and procedural standards, ensure accuracy in submissions, and eliminate foreign pro se participation. However, the rules diverge in key ways. The trademark rule requires representation by a U.S.-licensed attorney (though, as a practical matter, it remains advisable to engage counsel with meaningful trademark experience), while the patent rule imposes a more specialized requirement of a USPTO-registered patent attorney or agent. They also differ procedurally: trademark applications generally will not be accepted without proper counsel, whereas patent applications may still receive a filing date but will be considered incomplete until compliant representation is secured. The scope of who qualifies as “foreign” is broader in the patent context, applying if any applicant, inventor, or owner is foreign-domiciled, compared to trademarks, which focus on the domicile of the owner alone. Finally, while both rules address fraud, the patent rule more directly targets specific abuses, such as false micro-entity claims, improper priority assertions, and fraudulent correspondence filings, reflecting a documented rise in these issues in foreign-originating applications. Practical Implications for Foreign Applicants and Patent Owners Foreign-domiciled individuals and entities should take proactive steps to ensure compliance. They should retain a U.S.-registered patent practitioner as early as possible, particularly if they plan to file U.S. patent applications in or after July 2026. They should also review existing portfolios for upcoming deadlines that will require practitioner signatures, ensure that ADS filings, micro-entity certifications, petitions, and follow-on submissions are properly executed by a registered practitioner, and anticipate USPTO notices requiring representation in applications that were filed before the rule’s effective date.
April 6, 2026
Mergers and Acquisitions
Financial Readiness: Fixing the Problems Before Going to Market
When a business owner is considering a sale, financial statements are often the first point of contact with a potential buyer. Before any discussions commence regarding strategy, growth potential, or culture, buyers are going to ask the question, “Can we see your financials?” Your financials tell the story of your business. When they are clear, credible, and well-prepared, they create momentum and instill confidence in the buyer. But when they are inconsistent, unclear, or require significant explanation, the transaction may stall or halt before it ever really started. Or it could result in an offer that doesn’t meet the seller’s expectations. Carefully prepared financials are critical to any transaction, and this must be handled before entering the market. It is one of the most important steps a seller can take to protect valuation and keep the deal on track. The First Test for Buyers When reviewing a potential acquisition, buyers are going to first evaluate two fundamental issues: the historical earnings of the business and its future earning potential. The historical performance is the foundation for determining valuation. This means the financial statements must clearly demonstrate profitability and reliable cash flow. When there is uncertainty, it can translate into a discounted offer or a decision to walk away. Sometimes the issue is not that a business is underperforming, it is just that their financial statements are not clearly reflecting the true earning power of the business. Addressing “Add-Backs” It is common for many privately held businesses to run a variety of expenses through the company that are not directly tied to operations. When this happens, it can distort the financial picture if these are not identified and adjusted. This can include personal expenses that are run through the business, vehicles or travel not tied to operations, above-market owner salaries, compensation to family members that are not active in the business, and more. When preparing for a sale, these kinds of expenses will typically be “added back” to EBITDA to reflect the company’s normalized operating performance. When add-backs are properly documented, it can significantly improve the evaluation of the business. But they must be adjustments that are credible and clearly supported, or it can lead to additional concerns and a slower negotiation process. Quality of Earnings Reports Within the past few years, Quality of Earnings (QoE) reports have become increasingly common early in the process to review the company’s financial performance. Sellers are now commissioning these reports before entering a sale process as opposed to a buyer conducting this analysis during the due diligence process. Because an independent accounting firm is conducting the analysis, it lends a level of third-party legitimacy and validation to the company’s earnings profile. This serves to further reduce uncertainty and can help accelerate the process overall. It can also help to instill confidence for the buyer that can lead to stronger initial offers. Preparation is Key in Today’s Market We have noted in previous posts looking at the current M&A climate that today’s buyers are more disciplined than ever. They are focused on financial clarity and risk management, and they are spending more time evaluating every aspect of a target’s financials. When a seller enters the market with well-prepared financial statements, along with supporting analysis from a third-party, they are often able to move through the diligence process more efficiently and have even greater leverage in negotiations. It is more important than ever to engage legal and financial advisors very early in the process. This allows ample time to clean up financial statements, resolve inconsistencies, identify areas of adjustment, and prepare supporting documentation. Presenting these kinds of financials that clearly demonstrate historical performance, and future potential allows buyers to justify a higher valuation. Part of every transaction is storytelling, and your financials must tell a credible story for buyers to have confidence in where the business has been and where it is going. Addressing any issues early in the process, well before going to market, is going to help eliminate surprises and strengthen the position of the seller. This is key to positioning the company for a successful transaction.
April 6, 2026
Intellectual Property
The Lion King Chant Roars Into Federal Court
Most people know the opening chant of Disney's "The Lion King," even if they can't quite place the words. That chant, "Nants'ingonyama bagithi Baba," was composed and originally performed in 1994 by Grammy-winning South African artist Lebohang Morake, known professionally as Lebo M. Its meaning, as published in the 2019 soundtrack liner notes, is a royal Xhosa proclamation: "All hail the king, we all bow in the presence of the king." On March 16, 2026, Lebo M filed a federal lawsuit in the Central District of California against Zimbabwean-born comedian Learnmore Jonasi, who told millions of podcast and social media viewers that the chant actually translates to "Look, there's a lion. Oh my god." The complaint, seeking over $20 million in damages, raises an unusual and provocative question: when does a comedian's viral joke cross the line into actionable harm to an artist's livelihood and legacy? The lawsuit brings four distinct claims. The first invokes Section 43(a) of the Lanham Act, arguing that Jonasi's false "translation" amounts to a misleading description of Lebo M's commercially significant creative work. The remaining three claims concern state law: 1) defamation per se, alleging the joke implies that a celebrated, award-winning composition is meaningless gibberish; 2) trade libel, targeting the disparagement of the composition itself as a commercial product; and 3) tortious interference with prospective economic advantage, based on Lebo M's concern that the viral mockery could jeopardize his decades-long working relationship with Disney. Notably, the complaint does not include a copyright infringement claim, as Jonasi never reproduced the composition itself. Therefore, the theory of harm here is reputational and commercial, not about unauthorized copying of protected works. Ultimately, the case will hinge on the tension between intellectual property protections and the First Amendment. Jonasi's legal team is likely to argue that a humorous riff on a song lyric's meaning is protected speech, comprising an opinion or parody, not a provably false "statement of fact" as defamation law requires. But the complaint lays groundwork to counter that defense: it alleges that Jonasi presented his translation in an informational podcast setting (as opposed to, for example, a stand-up special where such humor is expected as a matter of course), that Lebo M personally contacted Jonasi with the correct translation, and that Jonasi explicitly refused to retract. If the court finds those facts credible, the case for actual malice (and potentially significant damages) becomes much more compelling. For creators, brand owners, and anyone whose professional reputation is tied to a specific body of work, Morake v. Mwanyenyeka is a case worth watching as it develops.
April 6, 2026
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