March 6 2006, 23:54
March 7, 2006 will mark the end of a 213 year old tradition, but it will also be the start of new era. If all goes according to schedule, tomorrow the New York Stock Exchange (NYSE) will complete a merger with Archipelago Holdings Inc. (Arca).  The merger will create a new publicly held corporation, NYSE Group Inc. (stock symbol: NYX) making the NYSE a for-profit public company.  The merger has been a long time in the making and is not only significant for the Big Board, but is also a major milestone in the corporate world as once again new standards have been set.  The transaction will give the NYSE, already the world’s biggest exchange, high tech trading capabilities and 49% of the stock trading market.  [More]
March 2 2006, 15:57
Because of the high-cost of real estate in the most desirable areas of the United States, especially southern California, many Americans are searching for a cheaper, less crowded alternative both for vacation homes and for primary residences. With thousands of miles of undeveloped coastline, and beachfront property costs at a fraction of those in the United States, Mexico has recently become a hot market for Americans wanting a laid-back atmosphere and an affordable vacation home with warm weather throughout the year. Though Mexico is the perfect place to build an affordable beachfront home, there is one slight problem for foreigners wishing to re-locate there: Article 27 of the Mexican Constitution prohibits ownership of beachfront property by foreigners and foreign corporations. Only persons born in Mexico or corporations established in Mexico can gain title to property within Mexico's "Restricted Zone." 
How do Americans get around this prohibition? The answer is rather complex. [More]
March 1 2006, 23:45
Despite the invalidation of communications excise tax, I.R.C. §
4251, by numerous federal courts the IRS is demanding that collection
of the tax continue.  The three percent communications excise tax
was originally imposed in 1898 as a temporary luxury tax to help fund
the Spanish-American war.  The tax applies to a number of
communications services among which is long-distance or “toll
telephone” service and is paid by everyone, both individuals and
businesses, who makes long-distance calls. 
purposes of the communications excise tax, the IRS defines toll
telephone service as “a telephonic quality communication for which . .
.there is a toll charge which varies in amount with the distance and
elapsed transmission time of each individual communication.” (emphasis
added)  The IRS contends that the word “and” in the statute should
be read as “either,” while those fighting the tax contend that “and”
should be read naturally as a conjunctive requiring that the toll
charge vary according to both distance and time.  Since the tax was
first enacted, the billing of long distance service has changed
significantly. Many individuals and business now pay a monthly flat fee
for long distance service rather than paying a rate based on the
distance of the call and its length.  Nevertheless, the IRS has
continued to enforce the tax. For most individuals the amount of tax
paid is very small, but for businesses, it can be a significant amount
of money. 
A number of businesses have filed suit demanding that the IRS stop
collecting the tax and refund monies already paid. The IRS has lost
every time. In two cases, the court granted summary judgment finding
the IRS’ argument of reading “and” as “either” lacked merit. , 
The potential loss of revenue to the government is significant. If the
tax is repealed the government will need to refund three years of
payments.  By the IRS’ estimation this could result is a nine
billion dollar refund to individuals and businesses. 
Due to the amount of money at stake the IRS is asking that
collection of the tax continue and will not process refund claims while
litigation continues.  The IRS declined to seek review by the
Supreme Court after losing in the 11th Circuit and will soon be facing
a class action suit seeking to stop collection of the tax and force the
IRS to issue refunds to taxpayers who not requested a refund. ,
 It is doubtful that the IRS will capitulate and cease enforcing
the tax. As long it is cost effective to fight the suits, the IRS will
no doubt keep collecting the tax and pay-off those who sue. However,
the upcoming class action may force the IRS to amend the code to
reflect the new realities of long-distance billing. Either way this
“temporary” tax to fund a war that ended over a hundred years ago will
be with us for the foreseeable future.
 I.R.S. Notice 2005-79 (Nov. 14, 2005).
 Officemax, Inc. v. U.S., 428 F.3d 583, 585 (6th Cir. 2005).
 I.R.C. § 4251(b)(1) (2006).
 I.R.C. § 4252(b)(1) (2006).
 Officemax, 428 F.3d at 584.
 Mary Dalrymple, Merchants Fight IRS Over Telephone Taxes, Yahoo, Feb. 19, 2006, http://news.yahoo.com/s/ap/20060219/ap_on_bi_ge/telephone_taxes_1.
 Fortis, Inc. v. U.S., No. 03 Civ. 5137 (JGK), 2005 U.S. Dist. LEXIS 2104 (S.D.N.Y. 2005).
 Officemax, 428 F.3d at 600.
 Dalrymple, supra, note 6.
 Officemax, 428 F.3d at 584.
 I.R.S., supra, note 1.
 American Bankers Ins. Group v. U.S., 408 F.3d 1328 (11th Cir. 2005).
 Dalrymple, supra, note 6.
February 25 2006, 02:26
Surprise! In 2005, Big Oil again turned one of the larger profits it has seen in recent years, with companies like Exxon Mobil boasting fourth quarter numbers 27% greater than last year's profits (which, by the way, were nothing to sneeze at). And why shouldn't we be surprised? After more than a year of paying a sky-high premium at the pump and in the home, it is plain to see that the oil industry is not sharing the burden of the high price of fuel with the consumer. Led by Senate Democrats, a bill has been proposed to impose a one-time-only $5 billion windfall tax on big oil to help offset the country's more than $300 billion deficit. [More]
February 23 2006, 01:54
A meeting at the UNEP headquarters in Nairobi, Kenya is focusing on the global trend to include more stakeholders in the corporate governance structure. The aim of this meeting is to promote links between environment sustainability, trade unions, and corporations. These trends are being followed in the U.S. as evidenced by the Securities and Exchange Commission proposal to allow large shareholders a direct voice in the nomination of board of directors. [More]
February 21 2006, 00:16
On January 23, 2006, the U.S. Supreme Court handed down its decision in Central Virginia Community College v. Katz , holding that a state cannot assert its sovereign immunity as grounds to block the avoidance of a preferential transfer to a state agency under § 547(b) of the Bankruptcy Code . At the heart of the matter was whether Congress overstepped its constitutional power when it enacted § 106(a) of the Code, which waives state sovereign immunity in bankruptcy.
However fair the outcome may be, the rationale of the Court cannot be reconciled with its prior decisions addressing Congress's ability to waive state sovereign immunity under its Article I powers. Indeed the Court's theory of implied waiver does little to justify why there should be a "bankruptcy exception" at all. On its face, Katz may be expected to open the door to broader Congressional abrogation of state sovereign immunity in the future, but the addition of Justice Alito to the bench almost certainly promises that Katz will receive a very narrow reading when the issue next reaches the Court. [More]
February 13 2006, 23:57
The beginning of 2006 usually gives pause to look back on the past year and reflect. When CEOs look back on the past year their vision may be obscured by the stacks of cash that were bestowed upon them. It was reported last week that despite small stock gains and slowing growth executive pay continued to swell in 2005.  Always a hot topic, and often over 400 time the amount earned by rank-and-file employees at large companies, executive pay is on the top of many people’s watch lists for 2006. This article will take a look at how some justify executive pay, what recourse shareholders have to stop executives being paid too much and the proposal the SEC has made regarding disclosure of executive compensation. [More]
November 14 2005, 23:58
As the year comes to a close, 2005 will be marked as a leading year of Chief Executive Officer (CEO) turnover. With 1,100 CEOs having already left this year, departures have already exceeded the previous high set in 2000 when the dot-com bubble burst. The trend is a bit surprising as the economy and corporate profits have both been on an up swing this year. While it might be easy to attribute the exodus rate to the impact to the pressures of compliance with Sarbanes-Oxley, there are other factors that seem to provide a better rationale for this year’s trend. [More]
November 3 2005, 23:59
Corporate scandals over the past few years have been numerous and high-profile. As a result, the conduct of directors and officers of corporations have become subject to a high level of scrutiny. In addition to the public keeping a keener eye on the activities of corporations, the Sarbanes-Oxley Act of 2002 has increased the potential liability of directors and officers.  The Act, having established new fines and penalties for the corporate board, has had the incidental effects of causing the price of director and officers (D&O) liability insurance to rise dramatically and of creating a need for more sophisticated D&O insurance. While D&O coverage does exist, albeit it with higher deductible and limited coverage, a recent case demonstrates how directors may still bear the costs of litigation even with a policy.  [More]
November 1 2005, 00:18
"I don't think you can make a lawyer honest by an act of legislature. You've got to work on his conscience. And his lack of conscience is what makes him a lawyer." 
While the lawyer joke is an art form dating back centuries, it is not actually the case that firms throughout the country are staffed with snakes, shysters, and snollygosters. Nor is there much evidence that attorneys who counsel clients through bankruptcy proceedings are a particularly shady lot. So it has come as a surprise to many attorneys that Congress has enacted strict requirements, backed by monetary and criminal sanctions, for attorneys practicing in consumer bankruptcy. The burden of personal liability raises fundamental questions about the role of the attorney and the sanctity of the attorney-client relationship under the new bankruptcy law. [More]