Bankruptcy
When the Subsidiary Fails: Litigation Risks for Officers and Directors of Parent Companies
A recent decision in an adversary proceeding in Delaware, arising from the Chapter 7 liquidation of Rosetta Genomics, Inc., serves as a cautionary tale for corporate officers and directors — especially those of parent companies operating across borders. In Beskrone v. Berlin (In re Rosetta Genomics Inc.), 18-11316 (Bankr. D. Del. July 14, 2025), the complaint, which survived a motion to dismiss, underscores how fiduciary and fraud-related claims can reach beyond the immediate debtor to implicate leadership at the parent level, even when that parent is based outside the United States. Rosetta Genomics, Inc., a Delaware corporation, was a wholly owned subsidiary of Rosetta Genomics, Ltd., an Israeli biotechnology company. The U.S. entity was created to commercialize diagnostic tests in the American market. The parent company developed new diagnostic tests based on various genomics markets, including DNA, microRNA, and protein biomarkers, using various technologies, including qPCR, microarrays, Next Generation Sequencing (NGS), and Fluorescent In Situ Hybridization. The complaint alleges that the Delaware subsidiary’s most significant assets were its subsidiaries Minuet Diagnostics, Inc. and GynoGen, Inc., as well as the diagnostic test RosettaGX Reveal (“Reveal”). The latter accounted for the vast majority of the debtor’s revenue (up to 85%). The Israeli parent company owned another diagnostic test RosettaGX Cancer Origin Test. In 2012 Medicare established a reimbursement rate for Cancer Origin and published a formalized coverage decision through a Local Coverage Determination. This meant that the debtor and/or parent received approved automatic payments for claims submitted to Medicare and private insurers for Cancer Origin. The Reveal test was rarely reimbursed, but it was often billed under the coding for Cancer Origin. Central to the claims is the alleged miscoding of RosettaGX Reveal, which led to inflated revenues. Despite learning of Medicare scrutiny in mid-2017, the executives allegedly failed to disclose the issue to investors and continued to raise capital, ultimately contributing to the collapse of both entities. According to the complaint, Sabby Healthcare and Sabby Volatility Warrant Master Funds (collectively “Sabby”) and a potential merger partner incorporated financial statements that allegedly misrepresented the true source of revenue, omitting the coding irregularities. After the merger partner walked away, the Delaware subsidiary was placed in a Chapter 7 proceeding in 2018. Years after the subsidiary was put in a Chapter 7 proceeding, the trustee, Don Beskrone, initiated litigation not only against the officers of the debtor but also against the executives of the Israeli parent. Interestingly, a lawsuit was first commenced in the Southern District of New York in 2021, and the case was dismissed without prejudice for lack of personal jurisdiction. What facilitated the litigation was an assignment of claims from the Israeli parent’s liquidator and Sabby, which had invested nearly $8 million in the parent company under securities purchase agreements signed. The lawsuit asserts a number of causes of action, including breach of fiduciary duty, gross negligence, fraud, and negligent misrepresentation on behalf of the bankruptcy estate, against Kenneth Berlin (CEO of the parent and sole director of the debtor), Ron Kalfus (CFO of both entities), and Brian Markison (chairman of the parent’s board). All are U.S. citizens, yet their roles in the foreign parent did not shield them from liability in the U.S. bankruptcy court. The defendants in their motion to dismiss emphasize that Rosetta, Ltd. operated in the intensely competitive and rapidly changing biotechnology marketplace, and it had a consistently disclosed history of losses, as well as extensive disclosures in its public filings detailing the many risks inherent in investment (including, but not limited to, the risks inherent in Medicare billing determinations). Its failure was a risk that was clearly disclosed both early and often. Sabby, on the other hand, was a sophisticated investor that well understood the risks associated with investment in biotechnology and healthcare startups. The defendants challenged the complaint on numerous procedural grounds, including lack of subject matter jurisdiction, statute of limitations, forum non-conveniens, and failure to state claims. Nonetheless, the court allowed the case to proceed, signaling that directors and officers, even of foreign parents, can face serious litigation exposure when a U.S. subsidiary fails. This case is particularly instructive because it highlights how liability can extend across borders and corporate structures, exposing parent company officers to U.S. litigation and broadening the scope of claims through investor and liquidator assignments.
September 26, 2025
Labor and Employment
The Heat Is On: OSHA’s Proposed Heat Safety Rule Advances with June 16 Hearing
Update: OSHA Extends Post-Hearing Comment Deadline On September 17, 2025, OSHA extended the deadline for submitting post-hearing comments on its proposed Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings rule. Chief Administrative Law Judge Steven Henley granted a 30-day extension, moving the deadline to October 30, 2025. As a reminder, OSHA published the proposed rule in the Federal Register on August 30, 2024 and held an informal public hearing from June 16 through July 2, 2025. The agency has received more than 43,000 comments to date. Only stakeholders who filed a Notice of Intent to Appear at the hearing may submit post-hearing comments at this stage. Submissions, including supporting data, must be filed electronically through www.regulations.gov (Docket No. OSHA-2021-0009). What this means for employers: Employers who are eligible to file post-hearing comments should review their earlier submissions and consider whether supplemental comments are warranted before the October 30 deadline. Even if not eligible, employers should continue to monitor this rulemaking closely, as OSHA is moving forward quickly with finalizing the heat standard. Proactive compliance planning — including assessing current heat-illness prevention measures — will help employers stay ahead of regulatory changes. Original article published on June 19, 2025 As summer temperatures soar, so does the urgency for workplace safety measures to protect employees from heat-related illnesses. On July 2, 2024, the Occupational Safety and Health Administration (OSHA) unveiled its proposed rule, “Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings,” a groundbreaking step toward establishing the first nationwide standard to combat excessive heat in workplaces. With a public hearing scheduled to begin on June 16, 2025, this proposed rule is poised to reshape how employers across industries manage heat hazards. OSHA will hold the hearing virtually, and it will continue through July 2, 2025. The purpose of the hearing is to gather public input on the proposed rule, which aims to protect workers from hazardous heat exposure. What is the Proposed Rule? OSHA’s proposed standard is a comprehensive framework designed to protect approximately 36 million workers in both indoor and outdoor settings. The rule applies to all employers and activates when the heat index hits 80°F for more than 15 minutes during any 60-minute period — termed the “initial heat trigger.” At 90°F, the “high heat trigger” introduces additional requirements. Here’s a snapshot of what employers would need to do: Written Heat Injury and Illness Prevention Plan (HIIPP): Employers must develop and implement a tailored, written plan to evaluate and control heat hazards. This includes designating a heat safety coordinator to oversee compliance. Temperature Monitoring: Outdoor employers must monitor temperatures frequently to assess heat exposure accurately. Indoor employers need to identify areas where the heat index may reach 80°F and incorporate a monitoring plan into their HIIPP. Mandatory Breaks and Cool-Down Areas: At the initial heat trigger, employers must provide access to drinking water and break areas. At the high heat trigger, mandatory 15-minute breaks every two hours and observation systems (similar to buddy systems) to monitor for heat illness symptoms are required. Training and Acclimatization: Employees must receive training on heat hazards, emergency responses, and acclimatization protocols to gradually build tolerance to higher temperatures, especially for new or returning workers. Hazard Alerts and Signage: Employers must issue heat hazard alerts before shifts or when high heat is recognized, using accessible communication methods that are easily understood by all employees. For indoor areas frequently exceeding 120°F, warning signs are mandatory. This isn’t just a suggestion—it’s a specification standard, meaning employers have little wiggle room to deviate from OSHA’s requirements. The rule’s scope is vast, covering general industry, construction, maritime, and agriculture; however exemptions apply to work with no reasonable expectation of reaching the initial heat trigger or areas consistently air-conditioned below 80°F. Why This Rule Is a Big Deal OSHA’s push for a federal heat standard has been simmering since 2021, fueled by President Biden’s Executive Order 13990 on climate change. The agency’s National Emphasis Program on heat hazards, launched in April 2022, underscored the need for action, though citations under the General Duty Clause have been sparse and often overturned in litigation. This proposed rule aims to close those gaps, providing clear, enforceable requirements to protect workers from heat-related illnesses, which can range from heat exhaustion to life-threatening heatstroke. The timing is critical. Rising temperatures are no longer just a summer concern—record-breaking heat waves are hitting year-round, especially in regions like the Southwest. States like California, Minnesota, Oregon, and Washington already have heat illness prevention standards, and California’s recent indoor heat rule (effective July 23, 2024) shares similarities with OSHA’s proposal. For employers with existing plans, the good news is that OSHA’s rule doesn’t mandate changes if your program already includes the proposed elements. However, aligning your plan with OSHA’s requirements could be a smart move to avoid General Duty Clause violations. The Public Hearing: Your Chance to Shape the Future The public hearing begins on June 16, 2025 (and continues through July 2, 2025), offering a platform for employers, industry groups, and workers to weigh in. Only those individuals who filed a timely Notice of Intention to Appear (NOITA) will be allowed to testify or ask questions at the hearing. The comment period, which closed on December 30, 2024, saw robust engagement, and this hearing is the next step in refining the rule. Recent Supreme Court decisions, such as Loper Bright Enterprises v. Raimondo, have raised questions about the authority of federal agencies, potentially impacting OSHA’s rulemaking. Additionally, the Trump administration’s “Regulatory Freeze Pending Review,” issued on January 20, 2025, could delay or alter the rule’s trajectory, though its impact on ongoing rulemaking remains unclear. The hearing will be a critical moment to gauge the rule’s momentum and OSHA’s response to these dynamics. Practical Tips for Employers While the rule is still in the proposal stage, proactive employers can get ahead of the curve. Here’s how: Review Existing Plans: If you have a heat illness prevention program, compare it to OSHA’s proposed elements. Gaps in training, monitoring, or break policies could expose you to future citations. Engage in the Hearing: Attend the hearing (even if you failed to submit a timely NOITA) to stay informed and, if able, to voice practical concerns, especially if your industry faces unique challenges (e.g., indoor heat in manufacturing or outdoor work in construction). Train Your Team: Start training supervisors and employees on heat hazards and acclimatization now. Early adoption can reduce risks and demonstrate compliance readiness. Monitor State Standards: If you operate in states with existing heat rules, ensure compliance while preparing for potential federal alignment. California’s indoor rule, for example, has trigger points at 82°F and 87°F, slightly different from OSHA’s. The Heat Is On—Are You Ready? OSHA’s proposed heat injury and illness prevention standard is a wake-up call for employers to prioritize worker safety in a warming world. With the public hearing kicking off on June 16, 2025, now is the time to engage, prepare, and adapt. Whether you’re a small business or a multinational corporation, this rule could redefine your workplace safety obligations.
September 25, 2025
Sports Entertainment and Media
Court Reinstates Jury Finding in Disney Motion Capture Copyright Dispute
The Ninth Circuit recently issued a partial reversal of a grant of summary judgment to Disney in a dispute stemming from the misuse of motion capture software. This case arose when Disney's visual effects contractor, Digital Domain 3.0 “DD3,” allegedly used Rearden's copyrighted MOVA motion capture software without authorization during production of the 2017 Beauty and the Beast film. While a jury found Disney vicariously liable and awarded $250,638 in actual damages plus $345,098 in profits, the district court granted Disney's motion for judgment as a matter of law, concluding that Disney lacked the ability to supervise DD3's directly infringing conduct. The ability of Disney to supervise DD3’s misuse constitutes a necessary element of vicarious liability. The Ninth Circuit disagreed on appeal, holding that sufficient evidence supported the jury's finding that Disney had the practical ability to supervise and control DD3's conduct. The court rejected Disney's arguments that it was impractical to conduct due diligence on every piece of software used by vendors and that it had no way to identify the infringement, finding that the jury could reasonably conclude Disney had the reasonable ability to identify DD3's potentially infringing use of MOVA. However, the court affirmed the district court's decision to treat the jury's profit award as advisory, ruling that there is no jury trial right for profit remedies under the Copyright Act. This decision has the potential to motivate large studios such as Disney to rethink their due diligence obligations in cases involving large-scale productions with multiple vendors and complex technological workflows.
September 25, 2025
Mergers and Acquisitions
Finding the Right Deal Partners: Why Pace and Fit Matter
Selling a business is never just about numbers on a page, it’s about preparation, people, and navigating the unexpected. Mike Mercurio presents a compelling series of conversations with client and former Fireline owner Anna Gavin, as she shares the real story behind her company’s sale. From the private moment she first decided to sell, to the surprise challenges of disclosure schedules, and the essential role of trusted advisors, Anna offers a rare, inside look at what the process truly feels like. Whether you’re years away from a sale or already planning one, her journey provides invaluable lessons on timing, team, and trust. In Part 2 of our Selling Your Business series, Anna Gavin dives into one of the most overlooked but critical aspects of selling a business: choosing the right partners for the deal. She discusses with her deal counsel, M&A attorney Mike Mercurio, that from legal advisors to teammates, not everyone is the right fit for every situation. From the sell side perspective, she shares how important it was to align not just on expertise, but on pace, communication style, and approach. Keeping things simple, focused, and moving forward became the guiding principle and it made all the difference.
September 25, 2025
Labor and Employment
Visa Uncertainty: The Presidential Proclamation on H-1Bs and a $100,000 for New Petitions
On September 19, 2025, the Trump administration issued a Presidential Proclamation “Restriction on Entry of Certain Nonimmigrant Workers,” effective at 12:01 a.m. September 21, 2025. The Presidential Proclamation specifically targets H-1B Visa Holders who are outside of the United States. Any H-1B visa holder attempting to enter the United States after the effective date must be accompanied by proof of payment of an additional $100,000 fee. This action created panic among large H-1B employers and employees as employees scrambled to return to the United States before the effective date and time. The Administration, through United States Citizenship and Immigration Services (USCIS), U.S. Customs and Border Protection (CBP), and the Press Secretary’s office, had to “clarify” that their rule was only effective for new H-1B petitions. USCIS Statement attempting to clarify the situation: This proclamation only applies prospectively to petitions that have not yet been filed. The proclamation does not apply to aliens who: are the beneficiaries of petitions that were filed prior to the effective date of the proclamation, are the beneficiaries of currently approved petitions, or are in possession of validly issued H-1B non-immigrant visas. All officers of the United States Citizenship and Immigration Services shall ensure that their decisions are consistent with this guidance. The proclamation does not impact the ability of any current visa holder to travel to or from the United States. Accordingly, individuals in H-1B status in the United States are unaffected. The vast majority of H-1B cases pending for this cap year will also not be affected. Individuals traveling outside of the country with valid H-1B visas or seeking to obtain renewal of an H-1B visa, will also be unaffected. Instead, the focus will be on certain key groups. The first major group will be the new H-1B cap applicants in 2026. These applicants will be required to demonstrate payment of a $100,000 fee before filing their petition with the USCIS. Also, the effective date of the order will directly impact cap-exempt employers looking to hire new workers in H-1B status. These employers tend to be in research, medical, academia, and related fields. It should be noted that there is currently no guidance on how to make the fee payment. Exemptions are also built into the order, but they are not specific. Currently, it appears that they may exist for an individual, a company, or potentially a whole industry, if DHS determines that it is in the national interest of the United States and does not pose a threat to the security or welfare of the United States. Crucially, the Proclamation does not address whether the fee and restriction apply to cap-exempt H-1B workers outside of the U.S., who are typically exempt from the majority of H-1B fees. What should employers do? We currently believe that international travel will not be affected for the vast majority of H-1B visa holders. We recommend all non-immigrant visa holders consult with counsel before international travel, given the current climate. Employers and individuals looking to apply in the 2026 H-1B lottery or seeking employment with a Cap Exempt H-1B employer should seek legal advice immediately. How long is this effective for? The Presidential Proclamation is effective for a period of 12 months. What Happens in the future? The proclamation is likely to face legal challenges as it directly contradicts the will of Congress in the issuance of the H-1B visa program and its implementing regulations, including the introduction of application fees without notice and comment. Entry of nonimmigrants, however, is controlled by the executive branch, so potentially a modified version of this proclamation will continue.
September 22, 2025
Family Law
A Game-Changer for Divorcing Homeowners in Maryland
One of the biggest challenges for divorcing clients is determining how to handle the marital home. Even when both parties agree on who will remain in the home, the refinancing hurdle often proves to be insurmountable, especially given the recent climb in interest rates. Starting October 1, 2025, a new Maryland law will give divorcing homeowners the chance to stay in their home without refinancing. Same loan. Same interest rate. Same mortgage payment. But goodbye to financial entanglement with your spouse. For years, I have counseled homeowner clients on how to keep their home while removing their spouse from liability. Most people can’t pay off their entire mortgage, so it meant having to refinance into a new loan, which often involved higher interest rates, closing costs, and the challenge of qualifying alone. If refinancing wasn’t an option, homeowners would either have to sell the home or convince their spouse to stay financially connected on the mortgage. The options weren’t ideal. Starting October 1, 2025, Maryland is changing the game. A new law requires certain mortgage lenders to allow a divorcing spouse to assume the mortgage, that is, take over the mortgage without refinancing. (House Bill 1018). The spouse assuming the mortgage can keep their same mortgage payment and avoid refinancing fees such as closing costs and appraisals. The law applies to new loans but can also be retroactively applied to loans obtained prior to October 1, 2025, if the divorce decree is entered on or after October 1, 2025. Of course, every law has exceptions. The new law applies to most conventional mortgages, which are commonly used by Maryland families when purchasing a home. It doesn’t automatically cover government-backed loans like FHA, VA, or USDA, or mortgages from major national banks such as Wells Fargo, Chase, or Bank of America. That said, assumption may still be possible with those loans. In fact, we have helped some clients successfully arrange assumptions even before this law has gone into effect. Even though lenders will be required to offer assumption, homeowners will still have to meet the lender’s requirements to qualify for the loan. A skilled family law attorney can assist with crafting a settlement or obtaining a judgment that improves the chances of qualifying and gives families the best opportunity to stay in their home. This new law helps Maryland families worry about one less thing when getting divorced. The law will help families stay in their home, keep children in their same schools, and maintain a sense of normalcy during a time of change.
September 19, 2025
Labor and Employment
The Social Media Aftermath of the Charlie Kirk Assassination – Can An Employer Fire An Employee for Offensive Social Media Posts?
In an article in the September 16, 2025, edition of The Washington Post, the lead paragraph read as follows: “The wave of companies and other institutions firing or suspending employees over what they’ve said in reaction to last week’s killing of conservative influencer Charlie Kirk has expanded in recent days, as some of his supporters in and outside the government amp up a push against speech they say crosses lines.” Thus, the question that arises in the minds of both employees and employers related to the voluminous publicity surrounding the recent Kirk assassination is whether an employee’s social media post, which is deemed to be offensive, can justify the potential termination of such an employee. The short answer to this inquiry is that in the private sector, as opposed to the arena of public employment, where First Amendment protections may be applicable, employers have wide discretion to discipline and even fire employees for posts which are deemed to be unduly offensive, inflammatory, or violative of their cultural or internal policies. The caveat for private sector employers is that employees enjoy statutory protections under the National Labor Relations Act for speech of a political or social nature when such speech or posted comment is related to such employee’s workplace’s wages, hours or terms and conditions of employment. Furthermore, employees also enjoy protections under Title VII of the federal Civil Rights Act if, for instance, their social media posts protest discrimination in the workplace, when that alleged discrimination refers to any protected status, such as religion, national origin, race, disability, etc. Private employers would be well-advised in this incendiary political climate to analyze each situation based on the facts and circumstances of the post in question, and to evaluate whether such post is violative of its internal policies, is deemed to be overly inflammatory and/or offensive to a person(s), is disparaging or defamatory to the employer or its employees or customers, is damaging to the company’s reputation or cultivated image, or is deemed to be simply inconsistent with civilized and acceptable societal discourse. In any situation where termination may be predicated upon a social media post and where uncertainty may exist regarding potential legal exposure and/or a looming public relations crisis, it is always advisable for the employer to consult with competent employment counsel and/or a public relations crisis expert. Howard Kurman is a founder of Offit Kurman, a AmLaw 200 law firm. He is a principal in the firm’s labor/employment practice and regularly counsels employers on all facets of employment and labor relations law and practice. To contact Howard, he may be emailed at hkurman@offitkurman.com, or by phone at his office: 410-209-6417.
September 18, 2025
Estates and Trusts
Planning for Responsible Inheritance: What "Brewster’s Millions" Can Teach Us About Estate Planning
The plot of the 1985 comedy “Brewster’s Millions,” starring Richard Pryor and John Candy, centers around Montgomery Brewster, a minor league baseball player who stands to inherit $300 million from a previously unknown great-uncle. The catch? To receive his inheritance, he must spend $30 million[1] within 30 days without receiving any assets in return, and without merely giving away all the money. If Brewster does not spend the entire $30 million in 30 days, he will inherit nothing. Hijinks ensue. At its core, the movie is a satire on capitalism and consumerism, playing on the common fantasy of inheriting a life-changing fortune from a wealthy relative. However, the film also explores a common concern that many clients have when making their estate plans. They are worried that their beneficiaries will squander their life’s savings and exhaust their inheritance on luxury items or speculative investments. These clients consider how they can ensure that their beneficiaries will responsibly manage a significant inheritance. Brewster’s great-uncle explains that his contest is not an arbitrary one. He wishes to teach Brewster a lesson, to hate spending money so much that he will learn to manage his inheritance wisely. By forcing Brewster to exhaust a fortune, he teaches Brewster to think very carefully about how he spends his money, making strategic and methodical decisions in pursuit of a singular goal. While the movie’s plot is exaggerated for comedic effect, in reality, there are several well-established estate planning techniques a client may consider to instill fiscal responsibility in a beneficiary without going to such extremes. Staggered Distributions and Trustee Discretion It is common sense that a client would not wish for a minor beneficiary to receive an outright inheritance, and virtually all wills and trusts will provide that a minor’s share will be held in trust until a milestone birthday. This ensures that a beneficiary will not receive their inheritance outright until they attain a mature age. To further mitigate the risk of a beneficiary squandering their inheritance, a client may stagger distributions over a significant period of time. For example, the client may direct that the beneficiary’s inheritance be held in trust until the beneficiary turns 25, at which time one-third of the trust assets will be distributed outright. A second distribution of one-half of the assets may be made at 30, with the assets becoming fully distributable upon the beneficiary's attainment of age 35. This approach enables beneficiaries to mature into their inheritance gradually. While the assets remain in trust, distributions may still be made by an independent trustee pursuant to an ascertainable standard, such as for the beneficiary’s health, education, maintenance and support (the “HEMS” standard). The trustee is empowered to decide if, when, and how much to distribute to the beneficiary. If, like Monty Brewster, the beneficiary appears to be recklessly spending their inheritance, the trustee can act as a stopgap and cease making distributions. Incentives Another common strategy is to incentivize the beneficiary to achieve specific goals to receive distributions. By dangling a “carrot” in front of the beneficiary, the client can guide and influence their beneficiary’s personal development and early career path. For example, the client may direct that the beneficiary will only receive a distribution upon obtaining a bachelor’s degree; if the beneficiary does not obtain a bachelor’s degree, their inheritance could be withheld for a longer period or even redirected to a charity. A client might further direct that distributions be made to the beneficiary for every year that they maintain full-time employment. A client could also include directions requiring a trustee to make distributions provided that they are used toward some productive goal, such as the purchase of a home. The client may encourage a beneficiary to keep a family home or vacation house in the family by providing an annual stipend for every year that the premises are maintained in good order. If the client is uncomfortable with such rigid, dead-hand influence over their beneficiary’s actions, they may still consider imparting some non-binding guidance or wisdom. For example, a client may express a preference for their beneficiary to use a portion of their inheritance for charitable purposes or to support a worthy cause. A client might also suggest, but not require, that their beneficiary employs a trusted family financial manager or accountant to assist them with managing their inheritance. Designating the Beneficiary as a Co-Trustee Another great strategy to foster fiscal responsibility is to name the beneficiary as the co-trustee of their trust fund until it is fully distributable. The client will then name a trusted individual or financial institution to serve as co-trustee together with the beneficiary. The beneficiary may be permitted to make distributions pursuant to the HEMS standard, but would not be permitted to participate in making discretionary distributions. This strategy provides greater flexibility and management over the beneficiary’s inheritance and the timing of distributions, while allowing the beneficiary the opportunity to manage their funds under the guidance and mentorship of a more experienced party. This may be especially valuable when the beneficiary has had little to no financial education or experience managing large sums of money. Conclusion Estate planning is much more than merely transferring assets; it is about preserving the client’s values and ensuring appropriate stewardship of the assets they leave upon their death. Estate planners have a variety of techniques and tools that can be employed to protect beneficiaries from themselves, oftentimes used in conjunction to maximize their effectiveness. The key is thoughtful and deliberate planning, exploring with the client the myriad of methods that can be used to achieve their goals and ensure preservation of their legacy. [1] Adjusted for inflation, this $30 million bequest would be approximately $90 million in today’s dollars.
September 18, 2025
Mergers and Acquisitions
What Really Happens When You Decide to Sell Your Business?
Selling a business is never just about numbers on a page, it’s about preparation, people, and navigating the unexpected. Mike Mercurio presents a compelling series of conversations with client and former Fireline owner Anna Gavin, as she shares the real story behind her company’s sale. From the private moment she first decided to sell, to the surprise challenges of disclosure schedules, and the essential role of trusted advisors, Anna offers a rare, inside look at what the process truly feels like. Whether you’re years away from a sale or already planning one, her journey provides invaluable lessons on timing, team, and trust. In Part 1 of our Selling Your Business series, client and former Fireline owner Anna Gavin shares her personal and professional journey that followed her pivotal decision to sell her business. From quietly sitting with the decision for a year to finally voicing it to her spouse, she walks M&A attorney Mike Mercurio, who served as her counsel and deal attorney, through the early steps she took to get informed and prepared. By attending panels, listening to expert advice, and beginning the groundwork a year in advance, her story highlights the importance of planning and just how early that planning really needs to begin.
September 18, 2025
Labor and Employment
The FTC’s Noncompete Ban Is Dead – But Enforcement Is Alive and Well
The Federal Trade Commission has officially withdrawn its appeal in Ryan, LLC v. FTC, putting an end to its controversial attempt to ban noncompete agreements through agency rulemaking. That effort may be over, but the commission has made clear that employers are not free to impose noncompetes “willy-nilly.” As FTC Chair Ferguson recently cautioned, the failure of the Biden Administration’s sweeping ban does not mean the agency is abandoning the field. From Rulemaking to Case-by-Case Enforcement Rather than pursuing broad regulations, the FTC has pivoted toward an enforcement model. On September 4, the commission announced a complaint against Gateway Services, Inc. over its use of noncompete clauses. Alongside the complaint, Commissioners Ferguson and Holyoak issued a joint statement emphasizing a new philosophy – using targeted enforcement to signal to the market what the FTC views as unlawful practices. In their words, a “steady stream of enforcement actions” provides transparency and nudges employers toward compliance without sweeping rulemaking. This case-by-case strategy echoes traditional antitrust enforcement – send a clear warning through precedent, not regulation. Public Input Still Matters At the same time, the FTC issued a Request for Information (RFI) seeking data about how noncompetes are used, justified, and experienced across industries. While the agency insists this is not a return to rulemaking, the RFI will likely shape enforcement priorities, especially sector-specific initiatives. Employers with legitimate business interests in protecting trade secrets or client relationships should consider submitting comments before the November 3 deadline to ensure their perspective is not drowned out by opponents. Healthcare in the Crosshairs The FTC has already signaled special scrutiny of healthcare employers. On September 10, Chair Ferguson sent letters to large health systems and staffing firms urging them to review restrictive covenants in their employment agreements. The move is striking given that states already regulate healthcare noncompetes more aggressively than nearly any other sector – dozens of new bills have been proposed in the past year alone. Why the added federal attention? One explanation may be the flood of public comments targeting healthcare during last year’s failed rulemaking process. In other words, political pressure and anecdotal evidence may be driving the FTC’s focus more than labor market data – where healthcare remains one of the strongest employment sectors nationwide. How Employers Can Avoid the “Willy-Nilly” Label The Gateway Services complaint and other FTC actions provide insight into what will draw scrutiny. Employers should work closely with counsel to design noncompete and restrictive covenant programs that focus on legitimate interests rather than blanket employee control. Key considerations include: Legitimate purpose: Use restrictive covenants to prevent unfair competition and protect confidential information, not merely to retain employees or block mobility. Role-specific tailoring: Reserve noncompetes for positions where they are truly necessary (e.g., senior executives, client-facing sales roles). Apply different restrictions for different levels of employees. Narrower alternatives: Consider whether non-solicitation, confidentiality, or customer protection clauses can adequately protect the business. Reasonable scope: Draft restrictions that are proportionate in duration, geography, and covered activities. Agreements that prevent someone from working for a competitor “in any capacity” – say, even as a janitor – are likely to raise red flags. Compliance with state law: Many states have already tightened restrictions on noncompetes. Ignoring state law not only risks invalidation but may also invite FTC scrutiny. The Bottom Line While the federal ban is off the table, the FTC is not retreating. Employers should expect enforcement actions to continue, particularly in sectors like healthcare, and should take this moment to review their agreements. A thoughtful, legally sound approach to restrictive covenants will make it much harder for regulators to paint your practices as “willy-nilly.”
September 18, 2025
Estates and Trusts
Trust Issues: Did the Clippers’ Leonard's Aspiration Deal Skirt the NBA Salary Cap?
As a trust and estates attorney for professional athletes, I was shocked when news broke that fintech start-up Aspiration owed the LA Clippers small forward, Kawhi Leonard’s personal LLC millions of dollars heading into its bankruptcy. At first glance, it sounded like a straightforward endorsement dispute. However, buried in the otherwise mundane bankruptcy filings was a “companion trust,” another name for an LLC, one that I have drafted for clients, but which has certainly raised some questions. The biggest question of all was whether the LLC was just a conduit for the Clippers’ clumsy attempt to boost Leonard’s income outside the NBA’s salary cap? The Players and the Paperwork Aspiration was founded as a banking platform invested heavily in by Clippers owner, Steve Ballmer. Leonard, a talented 10-year veteran, was already paid well by the Clippers on a max contract with the team. Then in 2022, he signed a four-year, $28 million “endorsement” deal through his personal limited liability company called KL2 Aspire. According to bankruptcy records, a “companion trust,” namely Leonard’s personal LLC, was set up to receive payments from Aspiration. That trust reportedly included a clause voiding the deal made with Leonard and any future payments if Leonard left [1]the Clippers. It should be noted that I draft LLCs and trusts for players all of the time; both can be an integral part of a properly drafted estate plan. Athletes, like all my clients, use trusts and LLCs for probate avoidance, creditor protection, privacy, and tax efficiency. In Leonard’s case, it seems that the LLC was instead drafted to function as a private channel to funnel money received from a company partly funded by the Clippers’ owner into a vehicle controlled by Leonard. The contract then tied the payments specifically to Leonard’s role with the Clippers[2]. Why It Matters Under NBA Rules The NBA’s collective bargaining agreement forbids “salary-cap circumvention”: a team is prohibited from channeling extra compensation to a player under the guise of a third-party deal. The use of a trust or an LLC to marshal assets or income does not change that rule. If the pay by a third party is well above market value for actual promotional work expected of the athlete, or contingent upon staying with the team, it still fits the bill as “compensation” and therefore a violation. It seems there is no evidence that Leonard performed any promotional duties that one would expect of a professional athlete paid millions of dollars. According to podcast host and journalist Pablo Torre, former Aspiration employees have said the marketing component was minimal. Despite the lack of service provided by Leonard, so far, the Clippers and Ballmer have denied any involvement with the generous arrangement. However, the combination of Ballmer’s hefty investment, reportedly in the tens of millions, the team-service clause, and the LLC’s transfers, provides the NBA with plenty to investigate. To be clear, the question is not whether the use of LLCs and trusts to hold players’ assets, or even income, is legal—they are—but whether this one was used as a poorly drafted device to mask Leonard’s compensation as an end-run around the cap rules. If investigators find that the LLC collected “endorsement” distributions meant to keep Leonard in Los Angeles playing for the Clippers, the repercussions will be steep, resulting in hefty fines, loss of draft picks, or perhaps even voided contracts. Until the league finishes its review, the Aspiration deal and Leonard’s LLC remain a cautionary tale to all in the professional sports world and their lawyers. Estate-planning tools like LLCs and trusts are perfectly legitimate and appropriate, but when the use of these documents intersects with team ownership and conditional contracts, these documents may look less like tools in a properly drafted estate plan and more like an end-run around the salary cap. [1] Report - Kawhi Leonard paid after Clippers partner's investment - ESPN [2] Kawhi Leonard situation explained as NBA investigates Clippers
September 18, 2025
Family Law
I Want The House! What It Takes to Keep It After Divorce
For many couples going through a divorce, the marital home is not only their most valuable asset but also their most sentimental asset. If one spouse wants to keep the home, they may need to “buy out” the other spouse’s marital interest. There are several ways to accomplish this, depending on finances, the mortgage, and the overall settlement strategy. The most common way to buy out a spouse’s share is through refinancing the mortgage. The spouse keeping the home applies for a new mortgage in their own name. The new loan pays off the existing joint mortgage. At closing, they may also borrow enough to pay the other spouse their share of the home’s equity. The other spouse is removed from the mortgage and is no longer liable for the debt. The spouse keeping the home gains financial independence and certainty, however they must qualify for the new loan independently, based on their own income, credit score, and debt-to-income ratio. Higher interest rates may also affect affordability. In some cases, a lender may allow an assumption of a mortgage. Instead of refinancing, the spouse keeping the home formally “assumes” the existing mortgage. They take over responsibility for the loan under its current terms. This allows the spouse to keep the existing interest rate and loan terms, which can be especially valuable in a rising interest rate environment. Not all mortgages are assumable, and the lender must approve the assumption. The spouse taking over the loan must still prove they qualify. Some jurisdictions, such as Maryland, are enacting laws that specifically require lenders to allow an assumption incident to divorce, provided the party meets applicable credit and underwriting standards. In Maryland, it also applies retroactively to existing loans (with nuances for conforming vs. jumbo loans). Check your local laws. Sometimes, the buying spouse can offset the other spouse’s equity interest without immediately changing the mortgage. This works when one spouse keeps the home and relinquishes other marital assets of equal value, such as retirement funds, investment accounts, or cash. This avoids immediate refinancing or sale and allows for a creative settlement tailored to the family’s circumstances. The spouse leaving the home may remain on the mortgage unless it is refinanced later, which can impact their credit and borrowing ability. If neither spouse can afford to keep the home,or if it makes more sense financially, the couple may decide to sell. In this scenario, the home is listed for sale, and the proceeds (after paying off the mortgage, costs of sale, and any liens) are divided according to the divorce agreement. This provides a clean break and cash that can help each spouse move forward and eliminates ongoing joint financial ties. However, this can be emotionally difficult, especially if children are still living at home. The timing of the real estate market may also impact the value received. Every family’s situation is different, and the right approach depends on finances, loan eligibility, and long-term goals. Whether through refinancing, assumption, offsetting with other assets, or sale, it’s important to consider both the short-term affordability and the long-term financial implications. Consulting with both a family law attorney and a mortgage professional can help you choose the option that best supports your future stability.
September 17, 2025
Family Law
Will My Spouse Get My Inheritance in Divorce?
Oftentimes, inheritances are considered separate property and are not divided in divorce. That means if you received money, real estate, or other property through an inheritance that was left specifically to you, it usually remains yours alone. There are important exceptions you need to be aware of: Commingling. If you mixed your inheritance with marital funds, such as depositing inherited money into a joint account or using it to pay for a jointly owned home, it may lose its separate character and be treated as marital property. Using the Inheritance for the Marriage. If inherited funds were used to benefit the family (paying down the mortgage, covering household expenses, or investing in a shared business), a court might find that some or all of the inheritance should be shared. Appreciation or Growth. Even if you kept the inheritance in your own name, any increase in its value during the marriage may be subject to division, especially if your spouse contributed to that growth. For example, if you inherited a rental property and your spouse helped manage or renovate it, part of the appreciation might be considered marital. Prenuptial or Postnuptial Agreements. If you and your spouse signed an agreement about inheritances, the terms of that agreement will generally control. There are actions you can take to protect your inheritance. For instance, keep inheritances separate from marital accounts, title inherited property in your sole name only, keep clear records that trace the inheritance, and consider a marital agreement to define how inherited property is treated in the event of a divorce. Inherited property can become vulnerable if it was commingled or used for marital purposes. Because state laws vary, it’s important to talk with your divorce attorney about your specific situation.
September 17, 2025
Estates and Trusts
More Than Money: Planning for Jewelry, China, and Sentimental Belongings
When most people think about estate planning, their minds often go straight to the big-ticket items: the family home, retirement accounts, life insurance, and investments. In reality, it is almost always the personal belongings—jewelry, family heirlooms, artwork, collections, and sentimental items—that cause the most conflict among loved ones after someone passes away. If anyone followed the news surrounding the highly contested estates of Robin Williams, Aretha Franklin, or Casey Kasem, most of the strife related to the decedent’s personal property and how it should be distributed. The days of itemizing every item that you own in your Will are gone; nonetheless, it is still vital to thoughtfully address personal property in your estate plan. A well-drafted plan ensures that your wishes are clear, disputes are prevented, and your loved ones are provided guidance during a time when tensions often run high. Why Personal Belongings Matter in Estate Planning Personal belongings often symbolize a connection to the person who died or even to an entire family legacy. While these items may not always have a significant monetary value, they often carry deep sentimental significance. Who inherits your grandmother’s wedding ring, your father’s guitar, or the family photo albums may matter more than who receives a brokerage account. Unfortunately, without clear instructions, these items can spark tension, disagreements, and litigation. How New York Law Treats Personal Property Under New York law, your personal belongings (referred to as “tangible personal property”) are part of your estate, just like your financial accounts and real estate. Unless you provide specific instructions in your Last Will and Testament, tangible personal property will be distributed under the general terms of your Will. If you do not have a Will or another estate planning document, those items are then distributed pursuant to New York’s intestacy rules. That means: If you simply leave “all of my tangible personal property” to a beneficiary, the beneficiary is entitled to keep all of it or decide how to divide or distribute those items to others If you leave the distribution to the discretion of the executor, then the executor can distribute it as equitably as possible to your beneficiaries – no easy feat If there’s no Will, New York’s intestacy laws determine distribution, which may not reflect your wishes and can lead to further discord Using a Separate Personal Property Memorandum One estate planning tool used in many states is a personal property memorandum (sometimes called a “memorandum of personal property”). This is a separate list where you detail who should receive specific items, such as a watch, artwork, or family china. In some states, these memorandums are legally binding if referenced in the Will. In New York, however, the law does not automatically recognize a memorandum as enforceable unless strict requirements are met. That means: It is recommended that you instead list items directly in your Will, which can make updating the list more cumbersome since it requires executing a new Will or codicil in New York Alternatively, you can create a revocable trust, which permits a “pour-over” bequest in your Will to a trust. The trust must be executed and acknowledged by the parties, prior to or contemporaneously with the execution of the Will, and the trust must be identified in the Will. Practical Tips for New Yorkers Be specific in your Will. If you know who should inherit a particular item, name the person and the item directly in your Will. Work with your attorney on a memorandum. Ask your estate planning attorney if incorporating a personal property memorandum into your Will makes sense for you. Keep the list updated. Life changes and so do dispositions of your belongings. Review your instructions periodically. Communicate with your loved ones. Talking about sentimental items in advance can help avoid surprises or conflicts later. Don’t overlook digital property. Photos, social media accounts, and digital collections are increasingly valuable and should be addressed in your estate plan as well. Thoughtfully considering your personal belongings in your estate plan is not just about protecting financial value, it is about protecting relationships and honoring memories. By thoughtfully planning for your tangible personal property, you will prevent disputes, provide clarity, and ensure that the items that matter most are passed on with intention. If you live in New York and are updating or creating your estate plan, be sure to discuss with your attorney the best way to handle your personal belongings. A little foresight can bring a lot of peace of mind.
September 15, 2025
Labor and Employment
Getting Paid for Nothing? The Legal Risks of No-Show Jobs
From political scandals to organized crime cases, the phrase “no-show job” is often associated with something shady. Think HBO’s The Sopranos, where Tony Soprano’s crew collected paychecks on construction sites without having to lift a finger. The idea of being paid well for doing very little — or nothing at all — might sound like a dream job, but it often comes with strings attached. And now, with recent reporting about NBA star Kawhi Leonard’s alleged $28 million endorsement deal, the “no show job” is back in the headlines. What Exactly Is a “No-Show Job”? A “no-show job” is a position where someone collects a paycheck without actually doing meaningful work. In some cases, the person is officially listed on the payroll but may not be expected to report or perform the same duties as other employees or contractors. These arrangements can take many forms, but typically include symbolic titles, roles specifically created for family or friends, or mechanisms for shifting money outside traditional channels. No-Show Jobs in the Private Sector In the private sector, employers have greater latitude to structure compensation as they wish. Executive contracts, retainers, and consulting agreements may guarantee pay, regardless of performance. Still, such arrangements can become problematic if they involve misuse of company resources, breaches of fiduciary duty, or violations of payroll and tax laws. Public Sector and Organized Labor With taxpayer funds, the line is far clearer. “No-show jobs” funded with public money are often the target of federal investigation and have led to convictions for fraud, embezzlement, and corruption. In labor relations, the practice of “featherbedding” (requiring payment for unnecessary work) has been unlawful since the Taft-Hartley Act of 1947, which prohibits unions and employers from agreeing to pay for work not actually performed. Where Sports Money Gets Complicated In professional sports, the legal issues surrounding “no-show jobs” differ from those in ordinary employment. In the NBA, the primary concern is salary cap circumvention. The league’s Collective Bargaining Agreement (CBA) requires that all compensation related to a player’s services be disclosed and counted toward the salary cap, promoting competitive balance among teams. That’s why recent reports involving Kawhi Leonard are drawing attention. According to investigative reporting and bankruptcy filings brought to light by sports podcaster Pablo Torre, a now-bankrupt fintech company allegedly promised $28 million to a Leonard-managed entity in exchange for endorsement duties that Leonard never performed. That company was reportedly tied to Los Angeles Clippers owner Steve Ballmer, which prompts speculation about whether the deal was merely an off-the-books way to supplement Leonard’s NBA compensation with the Clippers. Notably, even if this would be considered a lawful private agreement under general contract law, a hidden “no-show job” arrangement of this kind could be interpreted as an attempt to skirt NBA salary rules. If proven to be the case, the league has the authority to impose penalties, including heavy fines or the loss of draft picks. For now, both Ballmer and the Clippers have denied any wrongdoing. The NBA launched a formal investigation on September 3, but NBA Commissioner Adam Silver recently said the league is not rushing to judgment. Still, the story highlights how compensation structures in sports or business alike can blur the line between creative deal-making and questionable circumvention. Lessons Beyond the NBA For businesses outside the world of professional sports, the Kawhi Leonard headlines offer a reminder that “no-show jobs” can trigger serious problems for employers. Shareholders may view it as misuse of company funds, regulators may question classification of workers, as well as payroll and tax compliance, and company reputation and trust may be at risk. The best practice for all employers is to have a clear record of what each employee on payroll is doing to earn their compensation.
September 11, 2025
Intellectual Property
Lawsuit Against AI Giant Anthropic Settles
A class action copyright infringement lawsuit brought by U.S. authors against the AI company Anthropic has reached settlement, avoiding a trial set to begin in December. The class of plaintiff-authors alleged in the suit that Anthropic used millions of pirated books without authorization to train its popular Claude AI assistant. This case has had an unusual path to settlement, following a split opinion in June by Northern California District Judge, William Alsup. Alsup held that Anthropic's use of copyrighted works for AI training constituted fair use, but determined the company nonetheless violated copyright law by maintaining pirated books in a "central library" for use far beyond training purposes. This liability exposure, which could have potentially led to billions or even trillions of dollars in penalties assessed against Anthropic if the pending trial did not go its way, was likely the primary factor which drove Anthropic toward settlement. The settlement's broader impact on pending AI copyright litigation against other major defendants such as OpenAI, Microsoft, and Meta remains uncertain, as this landscape of copyright law remains largely unsettled. Just two days following Judge Alsup’s ruling, Northern California District Judge Vince Chhabria issued a somewhat contrasting opinion in a similar authors' lawsuit against Meta, which suggested that Meta's fair use defense held water. However, the judge suggested that the defense could fail if that suit’s plaintiffs adjusted their arguments to indicate AI models’ potential to flood the market with reproductions of the authors’ works. With dozens of AI copyright cases pending, the unpredictability surrounding these novel legal questions may either incentivize additional settlements or encourage defendants to hold out for potentially favorable precedential rulings. As authors, attorneys, executives, and judges alike continue to navigate this new copyright landscape, time will tell whether more AI companies follow in Anthropic’s footsteps and seek dispute resolution before trial.
September 11, 2025
Estates and Trusts
Marriage in the Balance: Safeguarding Rights for Same-Sex Couples
The U.S. Supreme Court has been asked to overturn Obergefell v. Hodges, the landmark 2015 decision that legalized same-sex marriage nationwide. Whether the Court revisits the case now or in the future, the right to same-sex marriage appears less secure than it has in years. For same-sex couples, especially those in states where legal protections are weaker, this development is a call to action. Although several legal safeguards would remain in place, a reversal of Obergefell could create serious legal and personal complications for many families. What If Obergefell Is Overturned? If the Supreme Court strikes down Obergefell, the constitutional right to same-sex marriage would no longer apply. Same-sex marriage would not immediately become illegal, but the right to marry someone of the same sex would hinge on individual state laws — much as it did before 2015. This about-face would likely lead to a patchwork of marriage laws, under which same-sex couples could marry in some states but not in others. States that had bans against same-sex marriage before Obergefell could begin enforcing them once again or could reimplement bans that were repealed in the decade after the Court had declared same-sex marriage a constitutional right. Some Protections Would Remain Even without Obergefell, several important legal protections would continue to offer support for same-sex couples, though none is as comprehensive or stable as a constitutional right. Respect for Marriage Act Passed by Congress in 2022, the Respect for Marriage Act is a federal law that requires all states to recognize same-sex marriages lawfully performed in other states. In other words, if a couple gets married in a state where same-sex marriage remains legal, their home state would still have to recognize that marriage, even if the state stopped issuing licenses itself. But the Respect for Marriage Act does not require any state to allow same-sex couples to marry within its borders. It provides important recognition but not universal access. State Laws That Support Marriage Equality Some states took independent action to legalize same-sex marriage through legislation, constitutional amendments, or ballot referendums. In these states, marriage equality would remain intact even if Obergefell were overturned. Many other states still have pre-2015 bans on same-sex marriage written into law. Those bans are currently unenforceable under Obergefell, but they could be revived if the precedent is reversed. Existing Marriages Likely to Be Upheld Most legal experts agree that existing same-sex marriages would remain valid, under the legal principle that the government generally cannot invalidate a lawful marriage. Still, uncertainty could arise in areas like adoption, parental rights, inheritance, and medical decision-making, especially in states that chose to restrict marriage rights in a post-Obergefell era. What Same-Sex Couples Can Do Now Regardless of what the Court ultimately decides, couples can take proactive steps to protect their rights and relationships. Consider Getting Married If you’re in a committed same-sex relationship, consider marrying before the law changes. Tying the knot now could help preserve important legal protections, especially if the right to get married is eventually rescinded. Marriage provides many important benefits, including joint-ownership and survivorship rights, tax advantages, healthcare decision-making authority, inheritance protections, and parental presumptions. These rights could be lost in states that move to restrict marriage equality. Put Legal Safeguards in Place Whether they are married or not, all couples should have the following legal documents in place to protect themselves and their families: Wills ensure that your partner inherits your assets and that your final wishes are clearly stated. Durable Powers of Attorney allow your partner to manage your finances if you become incapacitated. Advance Medical Directives authorize your partner to make healthcare decisions on your behalf and outline your medical preferences. These documents can provide peace of mind and legal clarity in the event of illness, incapacity, or death, especially if your marital status is ever questioned or unrecognized. Looking Ahead Even if marriage equality remains intact for now, the issue could return to the Supreme Court in the future. Under Court procedures, only four justices are needed to accept a case for review, and challenges to Obergefell are likely to persist. Whatever the future holds, same-sex couples can take commonsense steps today to protect themselves and their families. Being prepared helps to ensure that your rights and relationships are as secure as possible in uncertain times.
September 11, 2025
Business
Strategy and Deal Making: Understanding the Nuances of the Buy Side Approach
When it comes to today’s deal market, no two buyers approach acquisitions in the same way. For companies exploring a sale, or for boards weighing offers, understanding the distinct perspectives and motivations of private equity (PE) firms vs. strategic buyers is a key component in the decision-making process. Most data shows that strategic buyers are involved in a larger percentage of acquistions in the U.S. than PE firms, with some estimating they make up about 70% of transactions. While both categories of buyers are interested in achieving growth and value creation, their objectives, timelines, and deal-making strategies differ in ways that can shape everything from valuation to the post-closing integration process. What Drives Different Types of Buyers At the heart of every acquisition lies one simple question: What is driving the buyer? Understanding the why is essential as it determines factors such as how the deal will be structured, how risks will be allocated, and what life will look like post-closing. For most M&A transactions, buyers generally fall into three categories: Private Equity (Financial Sponsors) – These investment firms are highly focused on financial returns, have shorter investment horizons, and a defined exit strategy. They are looking to acquire a company with a goal to exit for a profit. Strategic Buyers (Operating Companies) – This category is made up of public companies, large private corporations, or industry leaders who concentrate more on finding synergies, long-term competitive positioning, and importantly, the integration of the target into their existing organization. Hybrid and Alternative Buyers – This group may include family offices, sovereign wealth funds, and consortiums, which may offer a blend of financial discipline and strategic motivations. Private Equity’s Playbook Private equity buyers typically operate within defined fund cycles, translating into a clear investment horizon, which is often five to seven years. Their acquisition strategy centers on unlocking value, whether that is through operational improvements, growth initiatives, or bolt-on acquisitions. There are several key hallmarks of the private equity approach, including discipline surrounding valuation. PE firms are very focused on returns, which can make them much more price sensitive than other buyers. They also utilize leveraged financing as a core component of their capital structure. This can magnify returns, but it also includes an additional risk factor. PE buyers also enter the transaction with the end in mind. They are concentrated on the exit event, whether that is a sale down the road, IPO, or recapitalization. For sellers, partnering with private equity can mean access to growth capital and operational expertise that can be invaluable, but it likely will not provide the kind of long-term “home” that a strategic acquirer would. The PE buyer is looking to exit as soon as the time is right. The Strategic Buyer’s Perspective As opposed to their PE counterparts, strategic buyers, pursue acquisitions to achieve synergies and create competitive advantages. They are motivated by expanding their market share, entering new regions, or acquiring complementary technologies. Strategic buyers often have longer investment horizons and could be willing to invest more heavily on the front end, knowing that they are looking to achieve returns over a longer time frame. This means that they might pay more of a premium when they can justify it through cost savings, revenue growth, or vertical integration over time. These buyers are going to be looking to integrate the target into their existing operations, which can impact culture, systems, as well as management continuity. Sellers may see strategic buyers as a more stable option as they are “in it for the long run.” The Rise of Hybrid Buyers There is an increasingly important category for sellers to consider, and that is the hybrid buyer. This category can include family offices, sovereign wealth funds, or corporate-backed investment arms which blend the return-driven discipline of a PE buyer with the more patient objectives of a strategic buyer. For certain sellers, for example founder-owned businesses, this option can be an attractive middle ground that presents a “best of both worlds” scenario. On the sell side, understanding the nuances of the buy side is essential to making the right decision. The “best” buyer isn’t always the one that comes in with the highest offer, and it is important to consider things such as long-term vision, cultural alignment, deal certainty, and growth support as well. There are some distinct differences between buyers, and to best negotiate terms and maximize value and long-term success, sellers must appreciate these differences and prepare accordingly.
September 10, 2025
Family Law
What to Do If You Are Accused of a Title IX Violation in College
Being accused of sexual misconduct in college is a deeply serious and often overwhelming situation. Title IX investigations can move swiftly, and the stakes are extraordinarily high in terms of academic, professional, and personal consequences. Even if you believe the accusation is clearly false or easily refuted, it is critical not to underestimate how complicated and potentially one-sided the campus disciplinary process can be. Taking the proper steps in the earliest moments after an accusation can make a significant difference in the outcome of your case. Here are the immediate steps you should take if you are accused: Call your parents and call an attorney experienced in college Title IX cases immediately. Even if you are embarrassed, even if the accusation against you is baseless, even if you have evidence proving the accusation is false, and even if you think you can easily explain why you are not at fault, it is critical that you do not attempt to deal with this alone. Why?The college procedures regarding the investigation and adjudication of sexual misconduct cases are stacked against the accused. Unfortunately, mere truth and common sense are usually insufficient to protect you; you need someone experienced to help you navigate the process. The sooner you get an attorney experienced in these cases, the better. Clients have sometimes come late in the process, believing they could manage the investigation or hearing without an attorney, only to face a negative outcome. It is far better to avoid pitfalls from the outset than to attempt to correct mistakes after they occur. You should have an attorney at the first interview with the Title IX investigator and have an opportunity to prepare with the attorney beforehand. Immediately save all texts, emails, social media, and other communications with the accuser to a thumb drive or another safe place. If you can’t readily access the content of your texts, there is software available to help retrieve and save them. Take screenshots of the accuser’s social media postings before and after the alleged incident. If you are blocked or unable to access the accuser’s social media, ask someone else if they can take screenshots. Do NOT contact the accuser, and do not ask your friends to contact the accuser. Most colleges will impose a No Contact Order between you and the accuser, and you do not want to violate that. Even if there is no order, you do not want to be accused of harassment. Do NOT ridicule or speak negatively about the accuser on social media or to others. Refrain from posting about the matter and exercise caution when discussing it with others on campus. Create a chronological outline of relevant events leading up to and after the alleged incident, including your communications with the accuser. Be as thorough and detailed as possible. Include names of witnesses, times, dates, and locations wherever possible. Make a list of individuals who have relevant information and collect their contact information. Keep a log of all communications with the school and Title IX office and save every email and written communication. Download and save your college’s policy and procedures on sexual misconduct that were in effect at the time of the alleged incident, and those in effect currently (policies may have changed.) Final Thoughts College students facing a Title IX investigation often feel shocked, confused, and isolated. But you are not alone, and your future is worth protecting. Seeking qualified legal guidance right away and following these practical steps can help you assert your rights and prepare your defense effectively. What you do within the first few hours and days can have a long-lasting impact. Ensure those steps are the correct ones.
September 9, 2025
Labor and Employment
Department of State Limits Nonimmigrant Visa Applications
On Saturday, September 6th, 2025, the Department of State announced that, effective immediately, all applicants for U.S. nonimmigrant visas (NIV) should schedule their visa interview appointments at the U.S. Embassy or Consulate in their country of nationality or residence. Individuals who currently have appointments booked are advised that their appointments “generally will not be cancelled” – however, no guarantee is made that their NIV will be issued. This policy changes the current guidance for so-called “third country nationals,” i.e., individuals who apply for a visa outside of their home country. It has been a long-standing policy that individuals can apply for an NIV anywhere in the world. Some embassies have pushed back on third-country nationals due to the overwhelming number of requests. Some examples include Canada, Mexico, and smaller consulates such as the Bahamas. This change drastically affects the visa options for individuals from countries with lengthy wait times and delays in visa processing. Indian nationals can no longer avail of interview waivers, and the current NIV wait times of two-three months are set to dramatically increase. This change underlines the importance of planning ahead for travel and understanding all potential risks. Individuals and employers should carefully consider the implications of travel if an individual would be required to travel to another country for an extended period. Finally, individuals with current visa appointments should consult with an immigration attorney to assess the risks of attending their visa interview. What is residency for NIV purposes? No further guidance is provided on what NIV applicants should provide to demonstrate residence in the country in which they are applying. Accordingly, applicants should carefully assess the totality of evidence that they can provide to an Embassy ahead of their appointment. It is advisable to have as much evidence as possible of residency at the interview to avoid any lengthy administrative processing. Exceptions to the rule? The current guidance states that “rare exceptions may also be made for humanitarian or medical emergencies or foreign policy reasons.” With no further guidance immediately available, it is safe to assume that exceptions will be very limited. Typically, humanitarian exceptions can include family unity reasons, as well as deaths or illness within a family, so applicants can potentially advocate for an exception on these grounds. The risks are substantial as the applicant may only be informed that their visa application is not eligible for processing at the interview. Accordingly, caution is advised when exploring exceptions in this area. But what if there is no US Embassy in my home country? Further guidance was provided for NIV applicants where NIV processing is suspended in their home country; they should make an appointment at their designated NIV consulate or embassy: NATIONAL OF DESIGNATED LOCATIONS(S) Afghanistan Islamabad Belarus Vilnius, Warsaw Chad Yaoundé Cuba Georgetown Haiti Nassau Iran Dubai Libya Tunis Niger Ouagadougou Russia Astana, Warsaw Somalia Nairobi South Sudan Nairobi Sudan Cairo Syria Amman Ukraine Krakow, Warsaw Venezuela Bogota Yemen Riyadh Zimbabwe Johannesburg
September 8, 2025
Construction
Pennsylvania’s Construction Statute of Repose Under Attack
For more than 40 years, Pennsylvania’s Construction Statute of Repose (SOR) has given contractors, engineers, and architects the assurance that liability for completed projects eventually comes to an end. That is because, after 12 years from substantial completion, all claims are barred, no matter when the alleged defect is discovered. That certainty, however, is under direct attack in Pennsylvania. Currently, two cases are pending before the Pennsylvania Supreme Court seeking to expand liability in ways that undermine the statute’s purpose and create indefinite exposure for architects, engineers, and construction contractors. In our role as A/E/C industry advocates, Offit Kurman was engaged by leading construction industry associations to file friends of the court briefs (amicus briefs) in both appeals to Pennsylvania’s highest court. Offit Kurman Advocates for AEC Groups in Key PA Construction Case Nine AEC Professional Associations Advocate in Pennsylvania Supreme Court Case What is the Construction Statute of Repose? A statute of repose, by definition, sets a definitive event for the statutory period to begin and then provides for an expiration period that is not tolled. The statute of repose differs fundamentally from a statute of limitations because repose can operate to bar a lawsuit before a cause of action accrues. By contrast, a statute of limitations runs from the time of injury or reasonable discovery of harm. For more than 40 years, the Pennsylvania Construction Statute of Repose has created a hard cutoff point for lawsuits brought against architects, engineers, and contractors who furnish design, planning, and construction services for any improvement to real property. Generally, this requires any such suit to be brought within 12 years of substantial completion. Once the repose period expires, all claims are barred, even if the defect was hidden or the injury occurred later. There are various policy considerations for the adoption of a construction statute of repose. First, unlike most products and services, architectural, engineering, and construction services that improve real property are intended to long outlive the owner. Because the intent is for buildings and infrastructure projects to have long life spans, which include renovation and rehabilitation, state legislatures have typically limited the time period during which construction professionals can be held liable for alleged design and construction defects. The reality is that there is a practical balance: involving years elapsing, records being lost, memories fading, and the individuals who were involved on the projects being unavailable, as a result of retirement or death, that makes defending against stale claims exceptionally difficult. By creating a clear endpoint, construction statutes of response protect the A/E/C industry while also ensuring predictable costs for owners and the public. State legislatures within 48 of the United States have adopted a construction statute of repose. Pennsylvania’s 12-year statute of repose ranks as one of the two longest statutes of repose in the country. Aloia v. Diament – The Meaning of “Lawfully Performing” The first challenge seeks to nullify the construction statute of repose arguing that the statutory provision which states that a person “lawfully performing” means that if a plaintiff alleges any violation of a regulation or building code the statutory period does not start to run. In Aloia v. Diament, a homeowner argues that because the construction of the home’s exterior envelope allegedly violated building codes, the contractor was not “lawfully performing” the construction work. On that basis, the plaintiffs contend the 12-year repose period never began to run, leaving the claims alive decades later. Offit Kurman’s amicus brief, filed on behalf of leading national and state design professional associations, including the American Institute of Architects and American Council of Engineering Companies, makes clear that plaintiffs’ argument completely erases Pennsylvania’s construction statute of repose by not paying attention to the plain and unambiguous text and purpose. Nearly every design and construction defect claim involves alleged code and regulatory violations; if “lawfully performing” meant “perfect,” the repose period would never commence to run. Instead, “lawfully performing or furnishing” design or construction services clearly means authorized, meaning that the design professional or contractor was licensed or otherwise permitted to perform the work. This interpretation aligns with Black’s Law Dictionary (“authorized or sanctioned by law”) and with the legislative purpose of the statute of repose. In other words, “lawfully performing” modifies the qualifications of the architect or engineer, not whether every detail of the design complies with every regulatory or code provision. Clearfield County v. Transystems – Public Projects and Nullum Tempus The second case on appeal to the Pennsylvania Supreme Court arises from renovations to the Clearfield County Jail. The original construction of the Clearfield County Jail was substantially completed in 1981. In 2021, more than 40 years after its substantial completion, the county alleged design and construction defects in the original design and construction seeking to avoid the construction statute of repose by invoking nullum tempus occurrit regi—the ancient common law doctrine that “time does not run against the king.” The county argues that nullum tempus exempts it from the 12-year bar. Offit Kurman was asked by nine design professional and construction associations, including ACEC-PA and all Pennsylvania Chapters of the Associated Builders and Contractors, to prepare an amicus brief in opposition to the county’s position. The amicus brief emphasizes three main points: Statutory Finality – The construction statute of repose eliminates causes of action after 12 years, thereby legislatively abrogating the common law doctrine of nullum tempus. Sovereign Immunity Limits – Nullum tempus is a privilege of the Commonwealth itself, not counties or municipalities. Voluntary Contracting – Even if nullum tempus applied more broadly to a statute of repose, it cannot shield a governmental entity voluntarily entering into design and construction contracts to improve real property. If accepted, Clearfield’s argument would mean every public project remains open to claims indefinitely, driving up insurance premiums, discouraging bidders, and ultimately increasing costs for public improvements for the taxpayers of the Commonwealth. Proposed Legislative Reforms to the Statute of Repose Because of the importance of the statute of repose, Offit Kurman has provided legal advice to associations within the A/E/C industry on legal reforms to bring the 12-year statute of repose in line with statutes adopted by other states, so that Pennsylvania is not at a competitive disadvantage. In addition, the legislative coalition of A/E/C trade associations is seeking to address the potential negative outcome of either of the Supreme Court appeals. Senate Bill 399 is currently referred to the Senate Judiciary Committee and would shorten Pennsylvania’s statute of repose from 12 years to six, bringing it closer to the national norm. Why It Matters If either appeal reverses the findings of the trial courts or if legislative reforms are not adopted, the impact on Pennsylvania’s construction economy will be profound. The potential ramifications include: Indefinite Liability – Design professionals and contractors would face claims long after projects reach substantial completion, even into retirement or estate administration. Insurance Burdens – Design Professionals and contractors would be required to carry liability insurance indefinitely, even when such coverage almost certainly is not available. Increased Costs – Design Professionals and contractors will build risk premiums into proposals and bids for public and private projects, passing costs directly to taxpayers and owners. The construction statute of repose was enacted in 1965 to prevent exactly these outcomes. Offit Kurman’s Construction Practice Group continues to work with A/E/C design and construction to protect the industry. Franklin C. Miller, Jr., Counsel at Offit Kurman, played a key role in supporting Anthony Potter with the preparation of the amicus brief. We also acknowledge the valuable contributions of Law Clerk Robyn St. Hilaire to this article.
September 5, 2025
Commercial Litigation
Shutting Down a Scam Lawsuit in Three Days
Imagine waking up to a bank notification that you just received money from a total stranger. That’s exactly what happened to a recent out-of-state client of mine. Eight months pregnant, no ties to Virginia, and without a clue as to who the mystery sender was. Suspecting an honest mistake, or at worst, fraud, she immediately contacted her bank and had the mysterious Zelle transaction reversed that same day. Problem solved, right? Not even close. From Push Notification to Pressure Campaign A few days after the reversal, my client began receiving text messages and phone calls from someone claiming to be the original sender. This individual insisted that she return the money, despite the bank having already reversed the transaction. The client calmly explained this and cut off contact. Then came the real twist. Weeks later, she was served with a Warrant in Debt in Virginia from someone she had never heard of. Panic set in. Not only was she facing a court hearing in a state where she didn’t reside, but she had less than a week to respond. That’s when she called me. Three Names, Zero Credibility When I reviewed the case, it quickly became clear: this wasn’t a legitimate debt collection, but rather a shakedown. The person who filed the lawsuit wasn’t the one who originally Zelle’d her the funds, nor was it the same individual who had been texting and calling her. In fact, three different names were tied to this single scam. Furthermore, the claim was riddled with procedural issues, including questionable service, jurisdictional overreach, and no coherent claim. It had all the hallmarks of a desperate (and sloppy) attempt to intimidate someone into paying money they didn’t owe. Courtroom Showdown — Or Not I appeared on her behalf at the hearing. When the would-be scammer saw I was there and prepared with a stack of papers, he looked stunned. Clearly, he didn’t expect anyone to show up, let alone with legal representation ready to pick apart the claim. I laid out the numerous procedural deficiencies and jurisdictional arguments. The plaintiff folded. The case was dismissed immediately. Why This Case Matters This case serves as a reminder of how scammers are evolving and how the legal system can be weaponized in new ways to harass and intimidate. It’s also a testament to how effective legal help can make a difference. With just a few days’ notice, we were able to respond, appear, and get the case thrown out. Allowing the client to put the ordeal behind her. If you’ve been blindsided by a suspicious lawsuit or served with something that just doesn’t feel right, trust your instincts and don’t wait. Getting a legal opinion early can be the difference between panic and peace of mind.
August 29, 2025
Bankruptcy
One Way or Another: Non-U.S. Crypto Customers Will Have to Face Celsius Preference Lawsuits
Why You Should Read Terms Before You Click or Check the Box with “I Agree” As Blondie sings: One way, or another, I'm gonna find ya I'm gonna get ya, get ya, get ya, get ya One way, or another, I'm gonna win ya I'm gonna get ya, get ya, get ya, get ya Earlier this summer, the Bankruptcy Court for the Southern District of New York rejected a challenge to the Litigation Administrator, Moshin Y. Meghji, lawsuits against Celsius Network LLC customers. The challenge was based on, among other grounds, lack of personal jurisdiction over defendants who resided outside of the United States and undertook transactions with Celsius online. The litigation administrator asked the Bankruptcy Court to hold that the foreign defendants were subject to personal jurisdiction, and that the preferential transfers they received were domestic transfers for the purposes of the preference avoidance provisions of the Bankruptcy Code, or, in the alternative, that these provisions of the Code applied extraterritorially. The foreign defendants argued that jurisdiction cannot be decided without a factual record, given questions about which entity owned the crypto, inconsistent Terms of Use provisions, potential fraudulent inducement, and the heavy burden on foreign defendants to litigate in the U.S. In his July 29 decision, Judge Glenn held that a bankruptcy court may exercise jurisdiction over a foreign defendant if the defendant has minimum contacts with the United States as a whole. The court further found that, as to all customers, the transfers were domestic and involved a domestic application of the Bankruptcy Code. Because the transfers are domestic in nature, the court did not reach the issue of extraterritoriality[1]. The court held that the transfers were domestic in nature because they were made from a Delaware company via LLC-designated frictional wallets and workspaces. The court’s analysis meticulously followed the textbook test for exercising specific personal jurisdiction over a non-resident defendant. Judge Glenn reviewed the three requirements that must be satisfied: “(i) a defendant must have purposefully availed itself of the privilege of conducting activities within the forum State or have purposefully directed its conduct into the forum State, or the United States when the issue arises in adversary proceedings in bankruptcy courts; (ii) the plaintiff’s claim arises out of or relates to the defendant’s forum conduct; and (iii) the exercise of jurisdiction must be “reasonable under the circumstances.” U.S. Bank Nat’l Ass’n v. Bank of Am. N.A., 916 F.3d 143, 150 (2d Cir. 2019).” Why the Court Found There was Personal Jurisdiction All non-US customers were bound by the Terms of Use, which contained a New York choice of law provision and a forum selection clause requiring litigation in New York courts, and that had shifted Celsius’ primary business operations, relationships, and obligations away from a U.K. entity to a U.S. company. Accordingly, the Bankruptcy Court found that the foreign defendants’ decision to contract with the U.S. company manifests an intent to purposefully direct their activities at the forum. Defendants have contracted to open accounts in a U.S.-based entity and signed a contract subject to the laws of the State of New York. The transfers were made by a U.S. entity to the foreign defendants accounts. “[A] contract with a New York choice of law provision is “a significant factor in a personal jurisdiction analysis because the parties . . . invoke the benefits and protections of New York law.” In re Celsius Customer Preference Actions, No. 24-04024 (MG), 2025 WL 2125270 (Bankr. S.D.N.Y. July 29, 2025) citing Sec. Inv. Prot. Corp. v. Bernard L. Madoff Inv. Sec., LLC, 460 B.R. 106, 117 (Bankr. S.D.N.Y. 2011), aff'd, 474 B.R. 76 (S.D.N.Y. 2012). These principles, Judge Glenn, emphasized also apply to clickwrap agreements. Id. at 12 citing Zaltz v. JDATE, 952 F. Supp. 2d 439, 451–55 (E.D.N.Y. 2013) (finding plaintiff assented to defendant’s terms of service when she clicked a box agreeing to the defendant's terms of service). Additional analysis of the forum selection clauses also supported the finding of personal jurisdiction over the foreign defendants. The Terms of Service included the following language: [t]he relationship between you and Celsius is governed exclusively by the laws of the state of New York. . . . Any dispute arising out of, or related to, your Celsius Account or relationship with Celsius must be brought exclusively in the competent courts located in New York, NY and the U.S. District Court located in the Borough of Manhattan. . . . Judge Glenn held that the Terms of Use were reasonably communicated to the defendants, the forum selection clause was mandatory, and the claims and parties involved in the litigation were subject to the forum selection clause. Lastly, the court held that the foreign defendants have not demonstrated a strong showing to rebut the presumption of enforceability. The court was not persuaded by the argument that an individualized determination with respect to each defendant was necessary, and the court could not rule on the defendants “en masse,” because the defendants did not dispute that the Terms of Use that were active during the preference period contained a forum selection clause. While allegations of fraudulent inducement and other defenses may be addressed in future proceedings, the court concluded that the litigation administrator had made a prima facie showing of personal jurisdiction over all defendants. In summary, Judge Glenn’s decision reinforces a clear message: engaging with U.S.-based platforms — even digitally —comes with legal obligations. The ruling not only affirms the reach of U.S. bankruptcy jurisdiction but also sets a precedent for how courts may treat cross-border crypto transactions going forward. The fine print matters! [1] As Judge Glenn pointed out the presumption against extraterritoriality is a “basic premise of our legal system.” It provides that “[a]bsent clearly expressed congressional intent to the contrary, federal laws will be construed to have only domestic application.” RJR Nabisco v. Eur. Cmty., 579 U.S. 325, 335 (2016) (citing Morrison v. Nat’l Australia Bank Ltd., 561 U.S. 247, 255 (2010)). The two-step inquiry, when analyzing extraterritoriality issues, requires to ascertain if a statute gives a clear indication of an extraterritorial application and if there is no such clear indication of an extraterritorial reach then a court has to examine the statute’s ‘focus’ to determine whether the case involves a domestic application of the statute.
August 27, 2025
Business
Non-Compliance with CMMC Could Put Your DoD Contracts at Risk
This past month, the Department of Defense sent the final rule for the new Cybersecurity Maturity Model Certification (CMMC) program under the Federal Acquisition Regulation to the Office of Information and Regulatory Affairs for review. This action precedes the inclusion of the new rule in Department of Defense contracts beginning this autumn. So, it is time to get into compliance for all who have been delaying the inevitable. Below is a quick review of these requirements. Background CMMC is designed to bolster the cybersecurity posture of the DoD’s supply chain by validating that DoD contractors and subcontractors possess the necessary cybersecurity practices and processes to safeguard Federal Contract Information (FCI) and various kinds of Controlled Unclassified Information (CUI). CMMC introduces a tiered, certification-based approach, ranging from Level 1 (basic cybersecurity practices for FCI) to Level 2 (advanced practices for most CUI), and Level 3 (expert practices for sensitive CUI). Why is This Important? Contractors and subcontractors must attain the appropriate CMMC level aligned with the security requirements of their contracts to bid and work on DoD projects. In addition to the cybersecurity and reputational risks of non-compliance, if contractors and subcontractors fib or cut corners, they could face False Claims Act (FCA) liability, including draconian damage and penalty assessments. One disgruntled employee who decides to bring an FCA complaint can cost a company significant pain. Contracts Covered by CMMC The CMMC requirement applies to DoD acquisitions that involve the handling of FCI and CUI. Major Contract Programs: Contracts for the procurement of defense systems, weapons, military equipment, and related services that require access to CUI or FCI will be directly impacted. This includes a broad spectrum of procurement categories across the DoD, from large-scale hardware contracts to software development and services. Subcontractors and Supply Chain: Importantly, the rule also extends to subcontractors at all tiers. This flow-down creates a ripple effect throughout the defense supply chain. Contracts Not Subject to CMMC While the rule is broad, it does not universally apply to all federal contracts. FAR Part 12 Commercial Item Contracts: Some commercial item contracts purchased under FAR Part 12 may be excluded unless the scope involves sensitive information or national security concerns. Contracts with No Access to CUI or FCI: Contracts that do not involve access to or handling of CUI/FCI will not be subject to CMMC requirements. Other Exceptions: The FAR Council has provisions for exemptions for technical or administrative reasons, but these are limited and require justification. What is FCI If you are a contractor or subcontractor that handles controlled information such as CUI, you likely have some sophistication regarding cybersecurity. But those with FCI may not be aware that they have protectible information, and most medium and larger-sized DoD contracts will have FCI. FCI refers to information that is not intended for public release but is provided by the federal government to a contractor or subcontractor for the purpose of fulfilling a federal contract. It includes data that is critical to the performance of government contracts. Examples include technical data (e.g., details about a supplier’s hardware specifications), contract schedules and milestones (e.g., timelines for delivering military equipment), and financial or administrative information shared with contractors. Typical Contracts:Smaller contracts Basic supply chain activities FCI Requires Level 1: Basic Cyber Hygiene Key Requirements: Implementation of basic controls, including access only by authorized users, maintaining identification and authentication, and physical protection of information systems. Practices include routine login credentials, portable device protections, and basic awareness training. Annual self-assessment and annual affirmation of compliance with CMMC requirements. What is CUI It’s not classified information, but it is information that requires safeguarding pursuant to various laws, regulations, and government policy. Examples include information about physical security, system vulnerability, or operational issues. CUI Requires Level 2 (Intermediate) or Level 3 (Expert) Processes Level 2: Intermediate Cyber HygienePractices: 110 practices, aligned with NIST SP 800-171 security requirements. Focus: Establishing more disciplined cybersecurity processes and practices suitable for organizations handling CUI. Third-party assessments are required for certification at this level. Level 3: Expert Cyber HygienePractices: Over 130 security controls, closely aligned with NIST SP 800-171, plus some additional practices. Focus: A mature, enterprise-wide cybersecurity program. This will apply only to a limited number of contractors with larger, more sensitive defense contracts that require higher levels of CUI protection. Third-party assessment is required.
August 27, 2025
Labor and Employment
Evolving Standards for Religious Accommodations at Work
The legal framework surrounding religious accommodations in the workplace has evolved significantly, driven by recent court decisions, EEOC enforcement actions, and federal guidance. Employers must gain a clear understanding of these changes, to ensure compliance with Title VII of the Civil Rights Act of 1964. With heightened scrutiny on religious exemption requests, particularly in the wake of COVID-19 vaccine mandates, employers must stay informed to avoid costly litigation and foster inclusive workplaces. Key Court Rulings Clarify Religious Accommodation Standards Recent judicial decisions have reshaped how employers must evaluate religious accommodation requests under Title VII. Below are pivotal cases that highlight the courts’ focus on sincerity of belief and the elevated standard for denying accommodations. Second Circuit: Defining Sincerely Held Beliefs In Gardner-Alfred v. Federal Reserve Bank of New York, 143 F.4th 51 (2d Cir. 2025), the Second Circuit offered critical guidance on assessing “sincerely held” religious beliefs in the context of COVID-19 vaccine mandate exemptions. The Federal Reserve Bank of New York (FRBNY) terminated two employees after denying their religious exemption requests. The court’s ruling clarified: Low Threshold for Sincerity: Plaintiff Gardner-Alfred’s exemption request was dismissed due to its reliance on a generic “exemption package” lacking ties to specific religious practices. Employers can expect courts to require detailed, individualized expressions of belief. Inconsistency Does Not Disqualify: Co-plaintiff Diaz’s claim was revived despite inconsistent behavior (e.g., using medications potentially conflicting with her religious objections). The court emphasized that imperfect adherence does not negate sincerity. Misunderstandings Are Valid: Diaz’s objection to mRNA vaccines, based on a mistaken belief about fetal cell lines, was deemed genuine. Employers cannot dismiss requests due to factual inaccuracies. Other Landmark Cases Groff v. DeJoy, 143 S. Ct. 2279 (2023): The Supreme Court raised the bar for denying accommodations, requiring employers to show a “substantial increased cost” or operational burden. This decision significantly strengthens employee protections. Keene v. City and County of San Francisco, No. 22-16567 (9th Cir. 2024): The Ninth Circuit ruled that blanket denials of religious exemptions, without engaging in the interactive process, violate Title VII. Bube v. Aspirus Hospital, Inc., No. 22-cv-745 (W.D. Wis. 2024): A federal district court rejected a hospital’s denial of exemptions based on vague claims of workplace disruption, reinforcing the need for specific evidence of undue hardship. Employers must conduct individualized, respectful inquiries into the sincerity of religious beliefs and avoid denials based on assumptions or skepticism. EEOC’s Robust Enforcement of Religious Rights The Equal Employment Opportunity Commission (EEOC) has intensified its focus on religious accommodations, particularly in response to COVID-19 vaccine mandate disputes. Key developments include: Recent EEOC Appellate Decisions (August 4, 2025) The EEOC’s Office of Federal Operations issued three decisions clarifying accommodation standards: Department of Veterans Affairs: A physician requesting Friday afternoons off for prayer was offered reduced hours or an overly burdensome schedule. The EEOC ruled these options unreasonable, noting that accommodations causing employee disadvantage (e.g., reduced pay) are insufficient. Claims of “low morale” among staff were also deemed inadequate justification. Federal Reserve Board: A law enforcement officer’s exemption request was denied without exploring accommodations or documenting hardship. The EEOC applied the Groff standard retroactively, emphasizing the need for a thorough process. EEOC’s Enforcement Milestones (August 18, 2025) In its “200 Days of EEOC Action to Protect Religious Freedom at Work” press release, the EEOC reported: Over 10,000 charges related to religious accommodations for COVID-19 vaccine mandates More than $55 million recovered for workers, including a $1 million settlement with Mercyhealth Lawsuits against organizations like Silver Cross Hospital and the Mayo Clinic for improper denials of religious exemptions The EEOC is prioritizing robust enforcement, and employers face significant risks for cursory or unsubstantiated denials of religious accommodations. Federal Guidance Promotes Accommodation The Office of Personnel Management (OPM) issued memoranda on July 16 and July 28, 2025, urging federal agencies to adopt a pro-accommodation stance. Key points include: Emphasizing a good-faith interactive process with detailed documentation Encouraging low-cost solutions like telework or flexible scheduling, which require strong justification if denied While directed at federal agencies, these guidelines reflect broader expectations for all employers under Title VII. Practical Steps for Employers To navigate this high-scrutiny environment, employers should adopt the following strategies. Risk Area Actionable Steps Sincerity Challenges Conduct respectful interviews, focusing on the employee’s stated beliefs. Avoid demanding theological proof or overly intrusive inquiries. Undue Hardship Claims Provide specific, data-backed evidence of substantial costs or operational burdens. General claims like “staff discomfort” are insufficient. Manager Training Train supervisors on clear protocols for handling accommodation requests compassionately and escalating them appropriately. Policy Review Update accommodation policies to align with the Groff standard and EEOC’s enforcement priorities. Ensure procedures are transparent and consistent. Documentation Log every step of the interactive process to demonstrate compliance and build a defensible record. The Lasting Impact of COVID-Era Policies The legal and regulatory focus on religious accommodations, spurred by COVID-19 vaccine mandates, has created a lasting shift in employment law. From scheduling adjustments to exemption requests, religious considerations are now central to workplace compliance. Employers must stay proactive, ensuring policies and practices reflect the latest legal standards to avoid litigation and promote a respectful, inclusive workplace.
August 25, 2025
Estates and Trusts
Trust Protectors – Should You Have One?
When creating a trust, determining who you want to serve as trustee(s) and benefit from the trust as beneficiaries are decisions that need to be made for every trust. The role of “trust protector” may not be as commonly known or understood, but the decisions whether to have one and, if so, who might best serve in the role, can be key to a smooth administration. A “trust protector” can provide valuable trustee oversight, flexibility, and inexpensive revisability — especially in long-term or complex trust arrangements. Deciding whether to have one and, if so, who might best serve in the role, can be key to a smooth trust administration. What is a Trust Protector? A “trust protector” is a person or entity appointed to monitor and, if necessary, intervene in the administration of a trust. Unlike a trustee, the trust protector does not manage trust assets or distributions. Instead, they are granted specific powers, defined in the trust document, to ensure the trust continues to operate in line with the grantor’s intent. Typical powers of a trust protector may include some combination of the following: Removing or replacing a trustee Amending trust provisions to comply with changes in law Resolving disputes between trustees and beneficiaries Approving or vetoing certain trustee actions This role is especially useful in irrevocable trusts, where flexibility is generally pretty limited. Does My Trust Need a Trust Protector? Not every trust requires a trust protector, but there are several scenarios where appointing one may make more sense: Long-Term Trusts: Trusts designed to last decades or generations benefit from a mechanism to adapt to changing laws and circumstances. Irrevocable Trusts: Since these trusts are difficult to modify, a trust protector can provide limited flexibility without court involvement. Complex Family or Business Dynamics: If there’s potential for conflict or concern about trustee performance, a trust protector can serve as a neutral safeguard. Asset Protection or Offshore Trusts: These often include a trust protector as a standard feature to enhance oversight and control. How Do I Choose the Right Trust Protector? If you’ve chosen to include a trust protector, how do you how do you decide which person is the right fit for your particular trust? Electing the appropriate trust protector is critical to ensuring the role adds value rather than complexity, and every situation should be evaluated on its own merits. That said, you might want to consider some or all of the following when making your choice: Independence: Ideally, the trust protector should not be either a beneficiary or a trustee to minimize or avoid altogether potential conflicts of interest. Expertise: Legal, financial, or fiduciary experience is beneficial, especially if the trust is complex or long-term. Trustworthiness: As the name implies, this role requires someone who can be relied upon to act in good faith and consistently with and in furtherance of the grantor’s intent. Availability: The trust protector should be willing and able to serve for the duration of the trust or have a succession plan in place. Often, clients choose a trusted advisor, attorney, or corporate fiduciary to serve in this role. Common Misconceptions About Trust Protectors Despite their growing use, the purpose and/or responsibilities of trust protectors can be misunderstood. Here are a few common misconceptions: “Trust protectors replace trustees.” It depends on what is meant by “replace” in this context. They generally oversee and intervene with the authority to replace one or more trustees with another only when necessary (such as when a trustee is perceived to be abusing his or her position or failing to carry out the terms or intentions of the trust). Trust protectors do not, however, manage assets or make routine decisions by substituting or “replacing” their own judgment for that of the appointed trustee(s). “Only large or offshore trusts need a trust protector.” While the use of trust protectors is common for large or offshore trusts, trust protectors can be helpful in domestic estate plans, especially where flexibility or oversight is desired. Reasons why a particular trustee may have been named at the time of drafting may no longer apply when the time comes. Successor trustees may not be in a position to step in as established in the trust (due to age or health issues, for instance). With a trust protector in place, it can be like having an added layer of defense against life’s unexpected twists. “Appointing a trust protector complicates the trust.” If “complicates” means the addition of more words, then yes, the addition of a trust protector does complicate things. Nevertheless, when properly drafted, a trust with a built-in protector can simplify administration of the trust and reduce, or even eliminate altogether, the need for court involvement. Take the situation faced by Jimmy Buffett’s widow. With Jimmy’s former legal counselor/advisor and his wife on equal footing as trustees, they quickly deadlocked over what can, should, or must be done with the assets and distributions. A well-chosen trust protector in Jimmy Buffett’s case could have served as the needed tie-breaking vote and/or insisted upon a “change in attitude” or occasioned a “change in latitude” by ousting whichever of the trustees, in the judgment of the trust protector, seemed to be missing the settlor’s intention, or as Jimmy might have said, acting as the “people our parents warned us about.” Final Thoughts A trust protector is not an essential requirement but, in the right circumstances, can be a valuable addition to a trust. The presence of a trust protector can serve as a “check and balance” feature to help ensure your trust remains effective, adaptable, and aligned with your goals over time by providing oversight after you passed on. If you're wondering whether a trust protector is right for a new trust you are considering, simply be sure to mention it to your estate planner/drafting attorney. If considering revising an existing trust to add a trust protector, seek a second opinion, separate from the initial drafting attorney, to evaluate your specific needs and objectives and whether these are more likely to be met with or without a trust protector.
August 25, 2025
Labor and Employment
Pregnancy and Lactation in the Workplace: Employer Duties Under Federal Law
August is the most popular birth month in the U.S., meaning many employees will return from parental leave this fall and winter with new postpartum needs. Two key federal laws – the PUMP Act and the Pregnant Workers Fairness Act (PWFA) – shape the legal obligations employers must provide to nursing employees and others with pregnancy-related conditions. Understanding these laws is essential for compliance and creating a supportive workplace for new parents. PUMP Act The Providing Urgent Maternal Protections for Nursing Mothers Act (“PUMP Act”), 29 U.S.C. § 218d, signed into law in December 2022, expands protections under the Fair Labor Standards Act (FLSA) for employees who need to express breast milk at work. The PUMP Act requires that employers provide reasonable break time, whenever needed, for an employee to express breast milk for her nursing child during the first year after birth and prohibits denying a covered employee a necessary pumping break. The law also requires employers to provide a space, other than a bathroom, that is shielded from view and free from intrusion by coworkers and the public. These protections apply to nearly all FLSA-covered employees; however, certain employees of airlines, railroads, and motorcoach carriers are exempt from the law, and employers with fewer than 50 employees are not subject to the break time and space requirements if compliance would impose an undue hardship. Even so, employees who are exempt under federal law may still be entitled to protections under state or local laws. The PWFA The Pregnant Workers Fairness Act, 42 U.S.C. §§ 2000gg to 2000gg-6, effective June 27, 2023, requires covered employers to provide reasonable accommodations for known limitations related to pregnancy, childbirth, or related medical conditions, unless doing so would cause undue hardship. Examples of reasonable accommodations under the PWFA include modified work schedules to allow for pumping, additional breaks beyond those required by the PUMP Act, and temporary changes in duties to reduce postpartum physical strain. The PWFA covers private and public sector employers with 15 or more employees, Congress, federal agencies, employment agencies, and labor organizations. 42 U.S.C. § 2000gg(2). Employers can take several proactive measures to comply with the PUMP Act and PWFA while supporting pregnant, nursing, and postpartum employees. Employers should start by reviewing and updating workplace policies to ensure they reflect the requirements of both laws, including clear procedures for requesting accommodations and designating appropriate lactation spaces that meet the PUMP Act standards for privacy and accessibility. Employers should also have processes in place to ensure that managers, supervisors, and HR personnel understand how to promptly respond when an employee raises a pregnancy- or postpartum-related need or accommodation request. Finally, maintaining open communication with employees returning from parental leave by proactively providing information on their rights and the resources available to them can help prevent misunderstandings, reduce legal risk, and foster a more supportive and inclusive workplace culture.
August 22, 2025
Bankruptcy
Fifth Circuit Confirms Third-Party Liens Survive Chapter 11 Discharge
The Fifth Circuit has confirmed the old adage that liens “ride through” bankruptcy regardless of a discharge. Reversing a Texas bankruptcy court, the Circuit Court has held that a statutory privilege (a lien) against property of a non-debtor cannot be extinguished by a Chapter 11 discharge or by a plan provision stating that the underlying claim is “settled” or “satisfied” by the plan’s payments. In In re Dynamic Offshore Res. NS, L.L.C., 2025 WL 1651901 (5th Cir. June 11, 2025), the panel reversed the Bankruptcy Court for the Southern District of Texas and held that an oil driller’s “statutory privilege” under Louisiana law to a lien against an oil well site’s owner or lessee was not extinguished by the Chapter 11 discharge or the confirmed plan’s provisions that creditors’ payments are in “settlement” and “satisfaction” of their claims. The debtor, Fieldwood, an oil well operator, had failed to pay a driller $13 million for its services prior to the bankruptcy case. The driller sought to enforce its statutory privilege against the site lessee under Louisiana law, but the lessee argued that the confirmed plan, which discharged the debt and indicated confirmation constituted a “satisfaction’ of the claim, meant the lien could no longer be enforced. Of course, the “black letter” rule that a lien “rides through” bankruptcy regardless of discharge would seem to apply. The twist was that under the “Louisiana Oil Well Lien Act” (LOWLA), the “privilege [was] extinguished ... [u]pon extinction of the obligation it secures.” So, the debtors were able to argue that, if the discharge or confirmed plan rendered the debt “extinct,” then the lien must be extinguished as well. They managed to get the bankruptcy court’s attention. After first ruling that the lien was not extinguished, Judge Isgur reversed himself and found that the obligation was rendered “extinct” by the discharge and plan provisions stating that creditor payments were in “settlement” and “satisfaction” of claims. A settlement and satisfaction, Judge Isgur reasoned, meant that the obligation ceased to exist, meaning the privilege must be extinguished. On appeal, the court noted the well-known rule that a discharge does not extinguish a claim but simply operates as a permanent injunction against its collection. So, the discharge couldn’t be grounds for extinguishing the lien under Louisiana law. The panel then noted that plan’s “settlement” and “satisfaction” language applied only to the relationship between the creditor and the debtor and cannot release a third-party from the underlying lien rights. Taking its cues from Purdue, the panel stated that not only were non-consensual release provisions generally prohibited by the code, but that no third-party release could arise from general language such as “settlement” or “satisfaction,” because such releases must be stated specifically in the language of the plan.
August 21, 2025
Sports Entertainment and Media
Federal Court Rules SoundExchange Lacks Standing in SiriusXM Royalty Dispute
Judge Naomi Reice Buchwald of the U.S. District Court for the Southern District of New York dismissed SoundExchange's $150 million lawsuit against SiriusXM, finding that the performance rights organization lacks legal standing to pursue litigation against broadcasters. The August 7, 2025, decision centered on allegations by SoundExchange, a non-profit entity designated by Congress as the singular entity responsible for collecting and distributing digital performance royalties for sound recordings, that SiriusXM manipulated its revenue accounting to shortchange artists on royalties stemming from the company’s satellite radio services. SoundExchange based its suit primarily on Section 114 of the U.S. Copyright Act, and claims that the underpaid royalties by SiriusXM have climbed since filing the initial suit in 2023, now allegedly exceeding $400 million. Judge Buchwald's opinion concluded that while Section 114 of the Copyright Act designates SoundExchange as the authority for collecting and distributing digital performance royalties, Congress never explicitly granted the body a private right to enforce nonpayment through litigation —unlike Section 115 — which expressly confers similar litigation powers to The Mechanical Licensing Collective. Notably, Judge Buchwald did not specifically address the merits of SiriusXM’s alleged nonpayment, restricting analysis solely to the threshold issue related to Section 114 of the Copyright Act, potentially leaving a door ajar for further enforcement by SoundExchange. SoundExchange disputed the ruling, calling Judge Buchwald's interpretation "entirely wrong on the law" and argued that Congress's inclusion of the word "enforcement" in Section 114 necessarily implies litigation authority. The organization contends that being charged with collecting and distributing royalties without the ability to bring legal action against non-compliant licensees would undermine the entire statutory licensing framework's function and efficiency. SoundExchange also points to practical precedent, noting as well that SiriusXM has acknowledged in prior disputes that SoundExchange reserves the right to sue for compliance. The ruling may have broader implications beyond the immediate SiriusXM case, affecting SoundExchange's enforcement capabilities across the digital music industry, including pending lawsuits against Napster and Sonos for similar nonpayment. SoundExchange is considering an appeal to the Second Circuit and potentially filing actions in state courts to preserve its enforcement mechanisms. The case presents a fundamental question about Congressional intent in creating the modern digital music licensing framework and whether administrative efficiency requires corresponding enforcement authority, with the resolution likely to have lasting implications for the balance of power between streaming services and rights holders in the music industry.
August 20, 2025
Family Law
Can You Start Dating While Divorcing? Legal and Personal Considerations
When couples agree to divorce, one of the first questions that is often asked is: “Can I start dating?” The simple answer is yes you can, but there are things to keep in mind. Even after you’ve filed for divorce, you are still legally married until a judge signs the final divorce papers. That means dating is technically “dating while married.” In most cases today, this won’t stop your divorce from going through. But it can impact issues like custody arrangements, financial matters, and how smoothly the proceedings unfold. If you have children, the court is always focused on what’s best for them. Dating amid a divorce often prompts questions such as: Is the new partner being introduced too soon Does the new relationship disrupt the children’s routine Is it adding stress or confusion for the kids Is the new partner reputable, a criminal, a public figure, etc. Judges want to see stability. Even if you feel ready to move forward, the court may see early dating as a potential distraction from your children’s needs. One of the biggest financial pitfalls of dating during divorce is something called “dissipation of marital assets,” which is a legal way of saying: spending money that belongs to both spouses on things outside the marriage, without your spouse’s consent. Examples include: Buying gifts for a new boyfriend or girlfriend Paying for trips, meals, or hotels with marital funds Using joint accounts for entertainment, rent, or travel related to the new relationship If the court finds that money was spent in this manner, the spouse responsible may be required to “pay it back” by giving the other spouse a larger share of the remaining assets. There are other practical concerns. For instance, negotiations may become more challenging. If your spouse finds out you’re dating, they may feel hurt or angry, which can make reaching an agreement more difficult. Dating while married can be emotionally messy. Divorce already comes with a lot of stress. Adding a new relationship may complicate your own healing process. If you start dating, children must come first. They may need time, as children often struggle with change. Bringing a new partner into their lives before the dust settles may make things harder on them. Tips if You Do Decide to Date Don’t use joint or marital funds on the new relationship Keep your dating life private until after the divorce is finalized Wait to introduce a new partner to your children until things are more settled or you’ve discussed a process with a mental health professional Talk with your lawyer about how dating might impact your specific case There isn’t a law that outright bans dating during a divorce, but between possible custody concerns, financial risks like dissipation, and the emotional toll, it often does more harm than good. If you want the divorce process to go as smoothly as possible, and protect your finances and your kids, the safest choice is usually to wait until the divorce is final before jumping back into dating.
August 19, 2025
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