Tag Archives: lewis and roca

118315706

GPEC announces Board of Directors for FY 2014

The Greater Phoenix Economic Council (GPEC) today announced the appointment of its Board of Directors for the 2014 fiscal year, as approved by the Executive Committee.

Alliance Bank of Arizona CEO James Lundy will continue to lead the Board of Directors as chairman.

“As the economy continues to improve, GPEC’s team of results-driven board directors will work to ensure the region not only maintains its trajectory but also pushes toward a more diversified and sustainable economy that is less dependent on growth industries like real estate and construction,” Lundy said. “I’m honored to work with this talented group of professionals and look forward to a productive year.”

Rounding out the Board’s leadership is SCF Arizona President and CEO Don Smith and Empire Southwest Executive Vice President Chris Zaharis as vice chairs, APS Vice President and Chief Customer Officer Tammy McLeod as secretary and Bryan Cave, LLP Partner R. Neil Irwin as treasurer.

New Board Directors include: Steve Banta, CEO of Valley Metro; the Honorable Denny Barney, District 1 Supervisor for the Maricopa County Board of Supervisors; Scott Bradley, Area Vice President for Waste Management; Mark Clatt, Area President for Republic Services; the Honorable Vincent Francia, Mayor of the Town of Cave Creek; Dr. Ann Weaver Hart, President of the University of Arizona; Bill Jabjiniak, Economic Development Director for the City of Mesa; the Honorable Michael LeVault, Mayor of the Town of Youngtown; Rich Marchant, Executive Vice President, Global Operations for Crescent Crown Distributing; Ryan Nouis, Co-Founder and President of Job Brokers; and Eric Orsborn, Councilmember for the Town of Buckeye.

“GPEC’s success is largely driven by its strong Board of Directors, all of whom reflect the region and state’s most accomplished professionals,” GPEC President and CEO Barry Broome said. “Every single one of them truly cares about our market’s success and serves as a community thought leader when it comes to competitiveness.”

Mayors from GPEC’s member communities and the organization’s Nominating Committee are responsible for nominating and appointing Board Directors. The one-year terms are approved during GPEC’s Annual Board meeting.

GPEC FY 2014 Board of Directors:

James Lundy – Chairman
CEO
Alliance Bank of Arizona

Don Smith – Vice Chair
President and CEO
SCF Arizona

Chris Zaharis – Vice Chair
Executive Vice President
Empire Southwest

Tammy McLeod – Secretary
Vice President and Chief Customer Officer
Arizona Public Service Company

R. Neil Irwin – Treasurer
Partner
Bryan Cave, LLP

William Pepicello, Ph.D. – Immediate Past Chair
President
University of Phoenix

Barry Broome
President and CEO
Greater Phoenix Economic Council

Richard C. Adkerson
President and CEO
Freeport McMoRan Copper & Gold

Jason Bagley
Government Affairs Manager
Intel

Ron Butler
Managing Partner
Ernst & Young LLP

Brian Campbell
Attorney
Campbell & Mahoney, Chartered

Michael Crow, Ph.D.
President
Arizona State University

Kathleen H. Goeppinger, Ph.D.
President and CEO
Midwestern University

Derrick Hall
President and CEO
Arizona Diamondbacks

Sharon Harper
President and CEO
The Plaza Companies

Ann Weaver Hart, Ph.D.
President
University of Arizona

Don Kile
President, Master Planned Communities
The Ellman Companies

Paul Luna
President and CEO
Helios Education Foundation

Rich Marchant
Executive Vice President, Global Operations
Crescent Crown Distributing

David Rousseau
President
Salt River Project

Joseph Stewart
Chairman and CEO
JPMorgan Chase Arizona

Hyman Sukiennik
Vice President
Cox Business

Karrin Kunasek Taylor
Executive Vice President and
Chief Entitlements Officer
DMB Associates, Inc.

Gerrit van Huisstede
Regional President Desert Mountain Region
Wells Fargo

Andy Warren
President
Maracay Homes

Richard B. West, III
President
Carefree Partners

John Zidich
Publisher & President
The Arizona Republic

Chuck Allen
Managing Director, Gov’t & Community Relations
US Airways

Steve Banta
CEO
Valley Metro

Denny Barney
County Supervisor-District 1
Maricopa County Board of Supervisors

Jason Barney
Principal and Partner
Landmark Investments

The Honorable Robert Barrett
Mayor
City of Peoria

Timothy Bidwill
Vice President
Vermilion IDG

Scott Bradley
Area Vice President, Four Corners Area
Waste Management

Norman Butler
Market Executive
Bank of America Merrill Lynch

Mark Clatt
Area President
Republic Services

Jeff Crockett
Shareholder
Brownstein Hyatt Farber Schreck

Wyatt Decker, M.D.
CEO
Mayo Clinic Arizona

George Forristall
Director of Project Development
Mortenson Construction

The Honorable Vincent Francia
Mayor
Town of Cave Creek

Rufus Glasper, Ph.D.
Chancellor
Maricopa Community Colleges

Barry Halpern
Partner
Snell and Wilmer

G. Todd Hardy
Vice President of Assets
ASU Foundation

Lynne Herndon
Phoenix City President
BBVA Compass

Linda Hunt
Senior VP of Operations and President/CEO
Dignity Health Arizona

William Jabiiniak
Economic Development Director
City of Mesa

The Honorable Robert Jackson
Mayor
City of Casa Grande

The Honorable Linda Kavanagh
Mayor
Town of Fountain Hills

The Honorable Andy Kunasek
County Supervisor, District 3
Maricopa County Board of Supervisors

The Honorable Michael LeVault
Mayor
Town of Youngtown

The Honorable John Lewis
Mayor
Town of Gilbert

The Honorable Marie Lopez Rogers
Mayor
City of Avondale

The Honorable Georgia Lord
Mayor
City of Goodyear

Jeff Lowe
President
MidFirst Bank

Paul Magallanez
Economic Development Director
City of Tolleson

Kate Maracas
Vice President
Abengoa

The Honorable Mark Mitchell
Mayor
City of Tempe

Ryan Nouis
Co-Founder & President
Job Brokers

Ed Novak
Managing Partner
Polsinelli Shughart

Eric Osborn
Councilmember
Town of Buckeye

Rui Pereira
General Manager
Rancho de Los Caballeros

The Honorable Christian Price
Mayor
City of Maricopa

Craig Robb
Managing Director
Zions Energy Link

The Honorable Jeff Serdy
Councilmember
City of Apache Junction

Steven M. Shope, Ph.D.
President
Sandia Research Corporation

James T. Swanson
President and CEO
Kitchell Corporation

Richard J. Thompson
President and CEO
Power-One

Jay Tibshraeny
Mayor
City of Chandler

John Welch
Managing Partner
Squire Sanders

Dan Withers
President
D.L. Withers Construction

The Honorable Sharon Wolcott
Mayor
City of Surprise

GENERAL COUNSEL
Bryant Barber
Attorney at Law
Lewis and Roca

Kenneth Van Winkle and Frederick J. Baumann_I

Lewis and Roca, Rothgerber Johnson & Lyons Join Forces

Lewis and Roca LLP, headquartered in Phoenix and a Southwestern leader in representing businesses in litigation and complex real estate transactions, and Rothgerber Johnson & Lyons LLP, a century-old Rocky Mountain firm with nationally recognized litigation and banking practices, announced today they will combine forces to create one of the largest law firms in the Western U.S.

When the firms officially join on September 1, 2013, the new 250-lawyer firm will be called Lewis Roca Rothgerber LLP. With a presence in Arizona, California, Colorado, Nevada, New Mexico, and Wyoming, the firm will maintain nine offices, including Phoenix , Denver, Las Vegas, Tucson, Reno, Colorado Springs, Albuquerque, Silicon Valley and Casper.

“Our growth into new markets is driven by our commitment to client service and our clients’ interest in gaining access to legal services throughout the West,” said Lewis and Roca’s Managing Partner Kenneth Van Winkle. “We found a solid partner in Rothgerber Johnson & Lyons and quickly realized our growth strategies aligned. Our two firms are strong apart, and we will be even stronger together.”

Rothgerber Johnson & Lyons Chairman Frederick J. Baumann said the combination was consistent with his firm’s strategic plan and was fueled by clients who want access to legal counsel in markets where their businesses are growing.

“Our clients have been expanding in the Southwest region for some time and encouraged us to find an opportunity to establish a presence there,” said Baumann. “With Lewis and Roca, we are partnering with a firm with an equally strong reputation in its practices and markets. Lewis and Roca not only shares our commitment to client service, but is a seamless fit strategically, culturally and professionally.”

The combination will strengthen the two firms’ existing national litigation practices, creating an expanded team of litigators with added experience across additional jurisdictions. It also will expand the firms’ business transactional, real estate and energy practices, which will enable the new firm to advise clients on projects from creation to completion.

Kenneth Van Winkle and Frederick J. Baumann_I

Lewis and Roca, Rothgerber Johnson & Lyons Join Forces

Lewis and Roca LLP, headquartered in Phoenix and a Southwestern leader in representing businesses in litigation and complex real estate transactions, and Rothgerber Johnson & Lyons LLP, a century-old Rocky Mountain firm with nationally recognized litigation and banking practices, announced today they will combine forces to create one of the largest law firms in the Western U.S.

When the firms officially join on September 1, 2013, the new 250-lawyer firm will be called Lewis Roca Rothgerber LLP. With a presence in Arizona, California, Colorado, Nevada, New Mexico, and Wyoming, the firm will maintain nine offices, including Phoenix , Denver, Las Vegas, Tucson, Reno, Colorado Springs, Albuquerque, Silicon Valley and Casper.

“Our growth into new markets is driven by our commitment to client service and our clients’ interest in gaining access to legal services throughout the West,” said Lewis and Roca’s Managing Partner Kenneth Van Winkle. “We found a solid partner in Rothgerber Johnson & Lyons and quickly realized our growth strategies aligned. Our two firms are strong apart, and we will be even stronger together.”

Rothgerber Johnson & Lyons Chairman Frederick J. Baumann said the combination was consistent with his firm’s strategic plan and was fueled by clients who want access to legal counsel in markets where their businesses are growing.

“Our clients have been expanding in the Southwest region for some time and encouraged us to find an opportunity to establish a presence there,” said Baumann. “With Lewis and Roca, we are partnering with a firm with an equally strong reputation in its practices and markets. Lewis and Roca not only shares our commitment to client service, but is a seamless fit strategically, culturally and professionally.”

The combination will strengthen the two firms’ existing national litigation practices, creating an expanded team of litigators with added experience across additional jurisdictions. It also will expand the firms’ business transactional, real estate and energy practices, which will enable the new firm to advise clients on projects from creation to completion.

justice

Case For Efficiency In Deficiency Judgments: Timely Tip For Lenders Holding Arizona Real Estate As Collateral

The wild ride of Arizona real estate extends beyond land acquisition, developments and foreclosures. Lenders who hold collateral in the form of deeds of trust against Arizona real estate would be wise to familiarize themselves with a recent case.

Lenders might already be (or certainly should be) aware of the limited time they have to seek a deficiency judgment against a borrower or guarantor following a trustee’s sale of collateral. Neglecting to file action in the form of a lawsuit within a 90-day period following the sale normally bars the lender from collecting a deficiency. (Arizona’s deed of trust statute: A.R.S. § 33-814(A))

But a surprising twist in the road emerged in a recent case. In National Bank of Arizona v. Schwartz, 230 Ariz. 310, 283 P.3d 41 (Ariz. App. 2012), a loan for roughly $1.36M was secured by a deed of trust against the borrowers’ residence in Scottsdale. The borrowers defaulted on their loan; and because of this, the bank conducted a trustee’s sale on the property. The home sold for “fair market value” at the time, leaving a deficiency of nearly $765,000.

The bank filed suit within the required 90-day period seeking to recover the deficiency amount. The borrowers had a different idea, and sought to dismiss the suit. Alternatively they sought to arbitrate the dispute, citing an arbitration clause in the promissory note; however, the trial court denied the motion. The bank’s victory was short lived when the Appeals Court reversed the decision and enforced the arbitration clause, upholding the borrowers’ request that the deficiency claim be arbitrated rather than determined by a court.

So what is an “action?”

Traditionally, “filing action” within the 90-day window after the sale of collateral has been interpreted by legal counsel to mean filing a lawsuit. Is seeking arbitration a sufficient “action” to take to collect on deficiency judgments? Based on the footnote in this case, it seems so. But lenders, beware: most promissory notes and guarantees do not contain an arbitration clause. Either way, the prudent thing to do is take action in the form of filing a lawsuit to seek a deficiency judgment. If you do, the suit can always be stayed if the parties agree to arbitrate.

Takeaways for lenders here are noteworthy.

1) Careful attention to the promissory note is critical. Was National Bank of Arizona aware of the arbitration clause in its own note?

2) In certain situations — like this one — a lender’s right to a deficiency judgment may be determined by an arbitrator and not a court.

3) A lawsuit is an undeniable “action.” To remove all doubt and eliminate the need for a court to decide what is or is not considered an “action,” a lender should file a lawsuit seeking a deficiency judgment within the 90-day period after a trustee sale.

In conclusion, lenders holding loans secured by real estate in Arizona should be aware of the state’s statute (A.R.S. § 33-814(A)) requiring a lender to bring an action for any deficiency amount within 90 days of the sale of collateral. Although the court in the Schwartz case determined a deficiency claim can be arbitrated versus resolved in court, it remains to be seen whether this case set a precedent, and if, in the future, courts will consider a demand for arbitration as an “action.” Therefore, covering all the bases by Henk Taylorfiling a lawsuit within 90 days of a trustee’s sale will at least be an undeniable “action” under the law and get the deficiency collection process underway.

Henk Taylor is a partner in Lewis and Roca’s Bankruptcy and Commercial Litigation groups. He helps his clients resolve bankruptcy, collection and debt issues in state, federal and appellate courts. He represents asset-based lenders, contractors, landlords, trade/service suppliers, and other secured and unsecured creditors as well as trustees and debtors.

 

Erik Smith

Lewis and Roca Welcomes Erik Smith To Phoenix Office

Lewis and Roca announced that Erik Smith has joined the firm’s Phoenix office as an associate in the Real Estate practice group.

Smith concentrates his practice in all areas of commercial real estate including acquisitions and dispositions, equity and traditional financing, and development.

He is a certified public accountant, previously with Deloitte & Touche, LLP, where he specialized in tax consulting, strategy, and compliance for national and multinational entities and high net-worth individuals.

Smith received his J.D., cum laude, from the University of Arizona, James E. Rogers College of Law and his B.S., summa cum laude, in Accounting from the University of Arizona.

 

Amy L. Lieberman, Insight Employment Mediation

2013 Az Business Mediation Guide

Az Business magazine’s 2013 Mediation guide was created after consultation with experts in the alternative dispute resolution field.

Amy Abdo
Fennemore Craig
602-916-5399
www.fclaw.com
Abdo has extensive experience in arbitration, mediation, investigations, administrative proceedings and litigation, including bench and jury trials.

Kevin T. Ahern
Broening Oberg Woods & Wilson, P.C.
602-271-7781
www.bowwlaw.com
Ahern’s practice is confined to mediations, neutral case evaluations, arbitrations, special master appointments and consultation in his areas of practice experience — real estate, commercial enterprises, title insurers, escrow agencies, insurance agencies, lenders, and property managers.

Shawn K. Aiken
Aiken Schenk Hawkins & Ricciardi
602-248-8203
www.ashrlaw.com
Aiken devotes a substantial portion of his practice to mediation and arbitration, and was selected by Best Lawyers in America as Lawyer of the Year, 2012 (Mediation, Phoenix).

Rebecca Albrecht
Bowman and Brooke LLP
602-643-2459
www.bowmanandbrooke.com
A former Superior Court judge, Albrecht incorporates her vast experience and skills to her practice, which includes arbitration and mediation. Albrecht is an American Arbitration Association (AAA) certified arbitrator.

Gerald W. Alston
Jennings Strouss
602-262-5911
www.jsslaw.com
Alston serves as both an arbitrator and a mediator in all areas of civil litigation, including domestic relations, eminent domain, and matters involving real estate and contract disputes. Cummins has extensive trial experience in the areas of health care and is an experienced arbitrator and mediator.

Christian C.M. Beams
Ryley Carlock & Applewhite
602-440-4818
www.rcalaw.com
Beams is an accomplished neutral who has resolved countless disputes through the mediation and arbitration processes. He is diligent in his efforts to bring matters to resolution, as evidenced by his high success rate in doing so.

Maureen Beyers
Osborn Maledon
602-640-9305
www.omlaw.com
Nationally recognized as a top arbitrator, Beyers has served as a neutral in hundreds of arbitrations on a variety of business disputes, and is a member of many of the American Arbitration Association’s specialized panels.

Gary L. Birnbaum,
Richard A. Frielander, and Michael S. Rubin
Mariscal, Weeks, McIntyre & Friedlander
602-285-5000
www.mwmf.com
Five of the firm’s senior lawyers are actively and continuously involved in alternative dispute resolution, including acting as arbitrators, mediators and neutral case evaluators in Arizona and throughout the Southwest.

Denise M. Blommel
Denise M. Blommel PLLC
480-425-7272
www.azlaborlaw.com
Blommel has more than 28 years of experience as an employment and labor law attorney, 15 years as a practicing mediator, including seven years serving as a contract mediator for the U.S. Postal Service.

Brice Buehler
Brice E. Buehler, P.C.
602-234-1212
www.bricebuehler.com
Since 1987, Buehler has mediated or arbitrated more than 2,500 disputes, including corporate, commercial, partnership, professional malpractice, and construction.

John R. Dacey,
Michael R. King,
Richard K. Mahrle
Gammage and Burnham
602-256-0566
www.gblaw.com
As part of Gammage and Burnham’s practice, several attorneys are available to serve as mediators or arbitrators in employment, construction, general, commercial and other litigation matters.

David J. Damron
David J. Damron, LLC
602-476-1836
www.damronadr.com
Damron specializes in alternative dispute resolution including mediation, settlement conferences and arbitration. Damron has mediated many hundreds of matters in his practice through the years and his participation as a Judge Pro Tem.

Paul F. Eckstein
Perkins Coie
602-351-8222
www.perkinscoie.com
Eckstein’s practice is focused on civil litigation and he also frequently serves as a mediator and arbitrator.

Michele M. Feeney
Michele M. Feeney L.L.C.
602-682-7513
www.mmflaw.com
Devoting her practice to mediation, arbitration and alternative dispute resolution, Feeney has litigated cases in the areas of medical malpractice, wrongful death, personal injury and other tort litigation.

Lawrence H. Fleischman
The Fleischman Law Firm
520-326-6400
www.fladr.com
Fleischman created the first Center for Dispute Resolution in the Arizona Superior Court system, saving litigants and taxpayers millions of dollars each year. To date, he has mediated more than 6000 cases for clients.

Sherman D. Fogel
Sherman D. Fogel, P.A.
602-264-3330
www.shermanfogel.com
Fogel is a full-service conflict management and dispute resolution professional, providing mediation, arbitration and facilitation services.

Richard N. Goldsmith
Lewis and Roca
602-262-5341
www.lrlaw.com
Goldsmith mediates commercial disputes and has extensive experience handling matters related to Articles 2 and 9 of the Uniform Commercial Code, commercial and real estate lending and leasing, and loan documentation.

Brian Michael Goodwin
Polsinelli
602-650-2001
www.polsinelli.com
Goodwin is a professionally trained mediator and has served as a judge pro tempore with the Maricopa County Superior Court from 1982 to 2005. He currently conducts private mediations and arbitrations.

Alona Gottfried,
Jared Simmons
Simmons & Gottfried, PLLC
480-998-1500
www.sglawaz.com
Simmons & Gottfried’s attorneys are specially trained to handle mediations and settlement conferences as a way to resolve issues in a cost-effective manner. Specialties include family matters, commercial and business issues, employment disputes, and real estate matters.

J. Alex Grimsley
Bryan Cave LLP
602-364-7117
www.bryancave.com
Grimsley has represented a variety of domestic and foreign companies in international arbitrations and before various federal regulatory agencies.

Rebecca A. Winterscheidt
Snell & Willmer
602-382-6343
www.swlaw.com
Through early intervention mediation, Winterscheidt assists parties in reaching a mutual resolution of their dispute without the need for costly litigation.

William Haug,
Chad Schexnayden
Jennings, Haug & Cunningham, LLP
602-234-7800
www.jhc-law.com
Attorneys who practice Alternative Dispute Resolution (ADR) at JHC represent businesses, government agencies and individuals involved in business disputes.

Marc Kalish
602-956-3608
www.arizonamediator.com
Since receiving formal mediation training in 1995, Kalish has devoted his law practice almost exclusively to providing alternative dispute resolution services as both an arbitrator and mediator.

Amy L. Lieberman
Insight Employment Mediation
480-246-3366
www.insightemployment.com
Lieberman’s practice is focused on the prevention and resolution of workplace and business conflict. She mediates primarily employment and commercial matters.

Merton E. Marks
Merton E. Marks, PC
480-544-4324
www.mertonemarks.com
Marks is a nationally known arbitrator and mediator of commercial disputes involving insurance, reinsurance, securities and product liability.

Bruce E. Meyerson
Bruce Meyerson PLLC
602-277-4585
www.brucemeyerson.com
Meyerson regularly serves as a mediator in virtually all aspects of commercial, employment, construction, real estate and business litigation.

Robert J. Milligan
Milligan Lawless, P.C.
602-792-3500
www.milliganlawless.com
Milligan specializes in health care law and mediation of litigated cases and pre-litigation disputes.

Leah Pallin-Hill
Mediation and Arbitration Services, PLLC
602-387-5323
www.leahpallinhill.com
Pallin-Hill offers ADR for general civil matters, including commercial disputes, construction, condemnation, employment, family, malpractice, elder abuse/nursing homes, personal injury, probate, and real estate.

Susan M. Robbins
Mushkatel, Robbins & Becker, PLLC
623-889-0691
www.phoenixlawteam.com
Robbins is a member of the State Bar Alternative Dispute Resolution Section and is also a member of the Association for Conflict Resolution. She is active in the area of mediation and disputes and contested matter in elder law.

David L. Rose,
Sharon B. Shively,
David C. Tierney
Sacks Tierney
480-425-2600
www.sackstierney.com
In addition to serving on some of the AAA’s most sought-after arbitration panels, Sacks Tierney attorneys regularly appear as advocates in arbitrations (or mediations) under AAA rules, or in State Court arbitrations convened under an arbitration agreement.

Ira M. Schwartz
DeConcini McDonald Yetwin & Lacy, P.C.
602-282-0500
www.deconcinimcdonald.com
Schwartz actively serves as a mediator and arbitrator of intellectual property disputes.

Stephen H. Scott,
Christopher M. Skelly
Scott & Skelly, L.L.C.
602-277-8228
www.scottandskelly.com
Scott is a former judge on the Arizona Superior Court who now serves full-time as a mediator, arbitrator, appraisal umpire and discovery master. Skelly has conducted thousands of mediations in virtually every kind of civil case.

Brian E. Smith
Brian Smith Mediation & Arbitration
480-507-8895
www.bsmed-arb.com
Smith has established himself as a proven mediator, impartially assisting and guiding parties to effectively facilitate their self-determined mutual decision making which is the cornerstone of the mediation process.

Thomas L. Toone
Beer & Toone, P.C.
602-263-0900
www.beer-toone.com
Toone has served as settlement judge, arbitrator or mediator in more than 2,300 cases in Maricopa County.

Douglas G. Zimmerman
Davis Miles McGuire Gardner, PLLC
480-733-6800
www.davismiles.com
Zimmerman is a certified mediator by The Institute for Conflict Management, LLC and completed the Advanced Negotiation Skills Program at the Harvard Law School Negotiation Insight Initiative.

Mark D. Zukowski
Jones, Skelton and Hochuli, P.L.C.
602-263-1759
www.jshfirm.com
Zukowski is a construction and commercial arbitrator and mediator for the AAA. He also serves as a private arbitrator and mediator and as a settlement conference Judge Pro Tem for the Maricopa County Superior Court.

ipo

Advantages and disadvantages of an IPO

The closing concludes and a company suddenly has $50 million cash in its bank account from the sale of its stock.  Champagne corks are popped and celebration ensues―for a brief period.  “Going public” is an exciting event for all involved and may provide many advantages to the company’s operations.  However, being a public company has certain disadvantages that should also be considered.

“Going public” refers to a sale of stock or debt in an initial public offering or IPO registered with the Securities and Exchange Commission (SEC).  A “public company” refers to a company that has undertaken an IPO or is otherwise required to be a reporting company under the Securities and Exchange Act.  A “private company” typically has a limited number of owners or investors and is not required to file reports with the SEC.  This article discusses some of the advantages and disadvantages of “going public.”

Advantages of an IPO

An IPO and the result of being a public company may provide significant advantages to the company and its stockholders.  These include cash infusion, ability to “mint coin,” easier future access to equity and debt markets, liquidity for pre-IPO stockholders and institutionalization of the company.  The common theme of these advantages is that a liquid market for its stock “unlocks” value that the company could not otherwise access.  By having publicly traded stock, the discount that is attached to stock of private companies no longer applies.

Cash Infusion The result of an IPO is a significant and immediate infusion of cash into the company.  This cash is typically “earmarked” for specific items described in the IPO disclosure documents, which can be for a variety of purposes.  For example, the company may use the proceeds of the IPO to expand its inventory, property and equipment base, reduce debt, further research and development or expand its services.

Minting of Coin. Having an established value and liquid market for its stock creates additional “coin” for the company through issuance of additional stock.  This “coin” may be used as consideration to acquire other business and to compensate both current and future employees.

The ability to utilize the company’s stock for an acquisition significantly decreases its cash needs and allows it to engage in transactions without tapping into its “war chest” of IPO proceeds, which can be put to use to fund future growth.  In addition, acquisitions using the company’s stock as consideration may be structured as a “tax-free” reorganization, which can allow the sellers to defer taxes on gains associated with the sale of their business.  Using stock as consideration for acquisitions also provides sellers an opportunity to participate in the future growth of the combined organization.

Another benefit of a liquid market for a public company’s shares is that its stock may be used to compensate both its existing and future employees through the grant of options or direct issuance of shares.  Grants of options or stock provide a means to share the company’s success and are a great tool for attracting talented management and employees.

Access to Capital Markets.  Being a public company enhances access to both equity and debt markets.  After the company has been a reporting company for 12 months, it may engage in follow-on offerings using a “short form” registration process.  The ability to use this process reduces both the time and expense of future equity financings.

As a reporting company, the transparency of its financial position and operations makes it better suited to obtain debt financings.  The infusion of cash from an IPO also enhances the balance sheet and makes the company a much stronger candidate for debt financings.

Liquidity An IPO provides liquidity to the company’s founders, employees and pre-IPO investors holding the company’s stock.  While the liquidity may not be immediately realized due to “lockup” requirements imposed by underwriters and other SEC rules, being a public company provides a means for the pre-IPO stockholders to monetize the value of their stock at some point in the future.

Institutionalization.  Being  publicly traded  adds to a company’s stature as an institution, which can enhance its competitive position.  The IPO process itself generates publicity that may enhance the company’s recognition in the marketplace.  As a result, suppliers, vendors and lenders often perceive the company as a better credit risk and customers may perceive it as a better source of products or services.  The stature of a public company can also enhance its ability to attract top level executives and employees.

Disadvantages of an IPO

While going public provides significant advantages to a company and its stockholders, the requirements imposed by securities laws produce disadvantages to the company and its operations.  These include increased costs, securities law compliance, changes in corporate governance structure and becoming a “slave to the stock price.”

Costs.  The costs of an IPO include both the costs of engaging in the offering process and the future costs of being a reporting company.  Typical costs of raising $50 million through the IPO process can range from $3.5 million to $5 million.  Raising less money can increase the percentage of offering costs significantly.  These costs include underwriting commissions, legal and accounting fees, SEC and National Association of Securities Dealers (NASD) filing fees, exchange fees, financial printing, travel and other miscellaneous costs related to the offering.  In addition to these initial costs, as a reporting company subject to securities laws, including Sarbanes-Oxley, and exchange listing requirements, the company will have significant ongoing costs associated with its operations.  These costs include outside directors’ fees and expenses, directors’ and officers’ liability insurance, accounting and legal costs, internal control costs, printing costs for stockholder reports and proxies and costs of investor relations.  According to a survey published by Foley & Lardner LLP, these costs average approximately $2.37 million per year, not including lost productivity costs, for public companies with revenue under $1 billion.

The costs are not just monetary.  The IPO process can take up to six months or longer.  During this period the company’s executive management team must devote substantial time and energy to the IPO.  This takes away from management’s time and ability to run the company’s business, and operations may suffer during the IPO process.

Securities Law Compliance A myriad of compliance issues results from an IPO.  The IPO process imposes severe restrictions on the company’s marketing and publicity activities during the “quiet period” preceding the filing of a registration statement.  The registration and reporting process involves the disclosure of significant information about the company that is readily available to the company’s competitors.  Following completion of the IPO, the company will be required to file quarterly, annual and current reports detailing its operations and announcing major events.  This disclosure includes detailed information about operations, executive compensation, financial results and significant customers and vendors.  Proxy statements must be filed with the SEC before a stockholders meeting can be called.  The company cannot release information on a selective basis and must be careful to assure that the information it releases is accurate and complete.  Company insiders and major stockholders also must comply with the Exchange Act requirements for reporting their stock ownership and prohibitions on short swing trading.  Finally, the exchanges where the company’s stock is traded have various listing standards that impose additional governance and disclosure requirements.

The changes to the securities laws resulting from the Sarbanes-Oxley Act have greatly increased the compliance issues that a public company must meet (with corresponding cost increases).  These include enhanced auditing and governance standards, additional responsibilities for the company’s independent directors, development and documentation of control procedures and certifications by the CEO and CFO.  The certification requirements are backed up by possible criminal sanctions for violations.

Change in Corporate Governance Structure A listing requirement of the major stock exchanges is that the company’s board be comprised of a majority of independent directors.  Independent directors cannot be officers, employees, major stockholders or outside service providers.  Independent directors must comprise the audit, compensation and corporate governance committees.  This means that the duties of selection and oversight of auditors, setting executive compensation and determining board candidates and litigation issues are taken away from management and given to “strangers” that may have little past experience with the company’s operations.  Another listing requirement is holding annual stockholder meetings.  Matters such as calling meetings and presenting proposals to stockholders must now be accomplished in compliance with SEC rules.

A major change brought about by Sarbanes-Oxley was empowerment of the independent directors.  Previous “best practices” of having a majority of independent directors are now mandated by exchange listing requirements.  The independent directors are charged with oversight of the company’s management and auditors.  For most companies, particularly where the founders are executive management, the change in corporate governance structure resulting from being a public company may take some adjustment.

Becoming a Slave to the Stock Price It is often said that a professional baseball pitcher is only as good as his last outing and that a CEO of a public company is only as good as her company’s last quarter.  While a fluid and liquid market in a company’s stock unlocks value, a public company’s stock price is frequently subject to rapid fluctuation.  The stock price can be affected by a variety of factors, over which management may have little or no control.  Reporting of quarterly earnings can lead to decision making based on the short term result when a longer term perspective would be better for the company.  The close ties between executive compensation and their personal net worth to operating results enhances the dilemma of seeking short-term results at the sacrifice of long-term perspective.  Wall Street can be impatient and, as with baseball pitchers, may have a tendency to look only to immediate past results rather than the big picture.

A loss of stock value can lead to dire consequences, such as stockholder lawsuits, loss of confidence in management and possible hostile takeovers.  Lawsuits can stem from a sudden decline in stock price.  A stockholder lawsuit can be very costly and distract management from running the business.    Recently stockholder activism has been on the rise and dissatisfaction with directors (including executive management on the board) has been evidenced by stockholders withholding approval of directors.  Various proposals, such as mandatory removal of directors that do not win a majority of stockholder approval in elections, are increasing the pressures on management to perform on a quarterly basis.  If a company loses favor with analysts and stockholders, its stock may suffer additional devaluation, which could lead to it becoming attractive to a hostile takeover bid.  A successful takeover, particularly a hostile takeover, could result in the company’s founders being removed from management positions.

Conclusion

While going public can have many positive effects on a company and its operations, these positive effects must be balanced against the disadvantages.   Going public drastically changes a company’s culture and has an ongoing impact on business operations.  Determining if going public is the right course for a company to pursue is a major decision and must be carefully considered by management before this course is taken.

 

Thomas Morgan is a partner in Lewis and Roca’s (www.lrlaw.com) Phoenix office in Phoenix, Arizona. He practices securities, corporate and tax law with an emphasis in public and private securities offerings, private equity fundings, mergers and acquisitions, regulatory compliance, and general tax planning. He can be reached at 602.262.5712  or TMorgan@LRLaw.com

running

How to build a healthy workforce

Are employers who eliminate junk food from the break room, offer classes on how to quit smoking, and dispense free flu shots doing enough to combat rising insurance premiums and increasing employee medical claims?  Maybe not, according to a 2012 American Heart Association report, which reflects that if current obesity trends continue, obesity-related healthcare costs could reach over $861 billion by 2030.  Health care costs neared 2.6 trillion in 2010 and the average annual insurance premiums for employer-sponsored coverage were a staggering $5,429 for single coverage and $15,073 for family coverage in 2011, according to a recent Kaiser Family Foundation study.

These rising healthcare costs have many employers exploring “wellness programs,” which are work-sponsored programs that assist and support employees in establishing healthier lifestyles.  Although they vary from company to company, wellness programs can include weight loss counseling, physical fitness contests, cholesterol and blood pressure screenings, advice on nutrition and healthful eating, subsidized fitness programs and discounts on gym memberships; some even provide incentive-based rewards to employees who participate.  Many also include health-risk assessments, which usually take the form of a questionnaire and are designed to identify health risks and “at risk” individuals and provide suggestions on preventive treatments and other health management tools.

A number of companies credit these programs with decreasing rates of illness and injuries, reducing tardiness and absenteeism, increasing productivity, lowering health care costs and insurance claims, and even enhancing morale and camaraderie among employees.  According to the CDC, 56 published studies report that workplace health initiatives have helped employers save up to 25 percent on overall healthcare costs, absenteeism, workers’ compensation, and disability claims.

It is no surprise, therefore, that the new Patient Protection and Affordability Care Act (PPACA) encourages employers to provide wellness programs.  The Act even provides grants for employers who implement and promote wellness programs.  But, in order to take advantage of these benefits, business owners need to make sure their wellness programs do not put them at legal risk.

The following tips may help your company implement a wellness program without violating federal employment laws:

1. Make the program voluntary to avoid running afoul of the Americans with Disabilities Act (ADA).
The ADA prohibits discrimination against individuals with disabilities and specifically precludes employers from asking questions about an employee’s medical condition or disability.  As a result, employers should make health-risk assessments voluntary and keep medical information confidential and separate from an employee’s personnel file.  According to the Equal Employment Opportunity Commission (EEOC), a program is considered voluntary so long as the employer does not require employee participation and does not penalize employees who choose not to participate.

2. Have your employees execute authorizations in order to comply with Genetic Information Nondiscrimination Act (GINA).
Another area of risk for employers offering wellness programs is GINA, which prohibits discrimination based on an employee’s genetics and specifically precludes employers from requesting, requiring, or purchasing genetic information about their employees or their employees’ family members.  Health risk assessment questionnaires, however, often include questions about medical history and family medical history because these questions can be helpful in identifying at-risk individuals and in providing preventive treatment ideas.  In order to prevent your health risk assessment from violating GINA, employees must volunteer the information and execute a written authorization reflecting his or her knowing and voluntary participation in the program.  There must also be strict privacy protections in place to ensure that employers neither disseminate nor use any genetic information obtained by virtue of the wellness program.

3. Don’t make rewards contingent on satisfying certain health metrics.
In addition, employers should also be mindful of the Health Insurance Portability and Accountability Act (HIPPA), which prohibits group health plans from discriminating or using health factors to determine eligibility for insurance enrollment or to determine insurance premiums.  HIPPA also prohibits discrimination within a wellness program itself.  An employer would be at risk of violating HIPPA by offering, for example, a financial reward to employees who achieve a certain “body mass index” (BMI).  This sort of requirement may not be achievable by all employees due to medical conditions or disabilities.  On the other hand, a wellness program will comply with HIPPA so long as rewards are not contingent on employees satisfying a specific goal or standard.  And employers will not violate HIPPA by offering financial incentives–like lower insurance deductibles or co-payments for employees who participate in the wellness or disease prevention programs–so long as the reward is not based on a specific health outcome and all employees have the opportunity to participate if they so choose.

While wellness programs can pay off for both employers and employees, business owners need to carefully craft their initiatives.  Consulting an expert who understands evolving federal laws can help employers avoid potential discrimination and legal challenges.
This article is for information only and is not legal advice. Emily Cates is a litigation partner in Lewis and Roca’s Phoenix office. Caryn Tijsseling is a litigation partner in Lewis and Roca’s Reno office.

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Arizona’s Top Lawyers 2012 – Securities & Corporate Finance – Tax

Arizona Business Magazine used its own research, solicited input from legal experts, and referenced professional ratings and rankings to determine the legal professionals who made the 2012 Top Lawyers list.


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Categories

BankingHealthcare
Business/Corporate LawIntellectual Property
Construction LitigationMergers and Acquisitions
Employment/Labor
Relations
Real Estate
Environmental LawSecurities and Corporate Finance
Estate and Trust LitigationTax

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SECURITIES AND CORPORATE FINANCE

Bryant D. Barber ◆ Lewis and Roca LLP
602-262-5375 ◆ lrlaw.com
Barber has extensive experience in municipal finance, including related areas of state and federal securities and tax law, and economic development financing programs.

James E. Brophy, III ◆ Ryley Carlock & Applewhite, P.C.
602-440-4807 ◆ rcalaw.com
Brophy’s practice focuses on securities, business transactions and employee benefits law.

Jon S. Cohen ◆ Snell & Wilmer L.L.P.
602-382-6247 ◆ swlaw.com
Cohen has a corporate finance practice, including a large number of public offerings, and mergers and acquisitions.

Thomas H. Curzon ◆ Osborn Maledon PA
602-640-9308 ◆ omlaw.com
Curzon’s practice focuses primarily on entrepreneurial transactions, including venture capital and other private placements of securities, mergers, acquisitions and divestitures, and initial public offerings.

Steven P. Emerick ◆ Quarles & Brady LLP
602-230-5517 ◆ quarles.com
Emerick’s practice is focused on corporate finance, securities and business transactions for companies in a broad range of industries.

Martin R Galbut ◆ Galbut & Galbut, P.C.
602-955-1455 ◆ galbutlaw.com
Galbut has been selected to The Best Lawyers in America for Securities Law (2007 – 2010) and Business/Commercial Litigation (2001-2009).

Robert J. Hackett ◆ Ridenour, Hienton & Lewis, PLLC
602-254-9900 ◆ rhkl-law.com
Hackett’s practice focuses in the areas of corporate, securities and banking law, including public offerings, private placements, mergers and acquisitions and corporate finance.

Robert S. Kant ◆ Greenberg Traurig, LLP
602-445-8302 ◆ gtlaw.com
Kant has represented large and small issuers of equity and debt securities in hundreds of securities transactions involving the sale of more than $20 billion of securities.

David P. Lewis ◆ DLA Piper LLP
480-606-5126 ◆ dlapiper.com
Lewis focuses his practice in the area of corporate and securities law, including mergers and acquisitions, securities offerings and compliance issues.

Julie Rystad ◆ Gallagher & Kennedy, P.A.
602-530-8070 ◆ gknet.com
Rystad advises financial institutions and business entities in various types of financial transactions, including asset-based, equipment, and real estate loans and leases, and warehouse lending.


TAX

James Benham ◆ Moore Benham & Beaver PLC
602-254-6044 ◆ mbmblaw.com
Benham practices individual, corporate and partnership taxation law, tax controversy, estate preservation and probate; formation, operation and reorganization of corporations, partnerships and limited liability companies.

Timothy D. Brown ◆ Gallagher & Kennedy, P.A.
602-530-8530 ◆ gknet.com
Brown practices in all areas of federal tax law, with an emphasis on real estate, partnerships, limited liability companies, corporations, real estate, international taxation, and civil tax controversy.

John F. Daniels, III ◆ Fennemore Craig PC
602-916-5431 ◆ fclaw.com
Daniels chairs the Tax and Tax Controversy practice groups at Fennemore Craig.

Pat Derdenger ◆ Steptoe & Johnson
602-257-5209 ◆ steptoe.com
Derdenger’s practice emphasizes federal, state, and local taxation law. He is certified as a tax law specialist by the Arizona State Bar.

James R. Hienton ◆ Ridenour, Hienton & Lewis, PLLC
602-254-9900 ◆ rhkl-law.com
As a certified tax specialist of the Arizona State Bar Association, Hienton works to structure business transactions in a most tax-effective manner.

Kirk A. McCarville ◆ Kirk A. McCarville PC
602-468-1714 ◆ mccarvillelaw.com
McCarville practices nationwide, engaging in civil and criminal law principally in the area of taxation.

Thomas J. Morgan ◆ Lewis and Roca LLP
602-262-5712 ◆ lrlaw.com
Morgan practices in the areas of securities, corporate and tax law with emphasis in public and private securities offerings, and general tax planning.

Martha C. Patrick ◆ Burch & Cracchiolo, P.A.
602-234-9939 ◆ bcattorneys.com
Coming from the IRS, Patrick represents taxpayers involved in civil and criminal tax controversies before the Internal Revenue Service and the Arizona Department of Revenue.

Lawrence Pew ◆ Pew Law Center
480-745-1770 ◆ pewlaw.com
Pew is an experienced tax, bankruptcy, and transactional attorney.

Les Raatz ◆ Mariscal Weeks Mclntyre & Friedlander, P.A.
602-285-5022 ◆ mwmf.com
Raatz has extensive experience in a broad range of tax, probate and trust matters, including estate planning, audits and litigation, and corporate, trust, exempt organizations, real estate, and partnership and limited liability company taxation.

Arizona Business Magazine has used its best efforts in assembling material for this list, but does not warrant that the information contained herein is a complete or exhaustive list of the top lawyers in Arizona, and hereby disclaims any liability to any person for any loss or damage caused by errors or omissions herein.

Arizona Business Magazine March/April 2012

Environmental Legal Issues - AZ Business Magazine November/December 2011

Arizona Faces Environmental Legal Issues To Grow ‘Green’ Movement

Though Arizona may be working to reach a higher standard of sustainability, a myriad of environmental legal issues will be seen as these changes are implemented. Arizona Business Magazine spoke with the state’s top law firms and industry experts to find out the most important environmental legal issues the state can expect to face in the next decade.

Particulate Matter-10

Attorney Megan Lennox of Bryan Cave LLP says, “The single biggest environmental legal issue Arizona will be facing for the foreseeable future is the regulation, implementation and enforcement of regulations concerning Particulate Matter-10, also referred to as PM-10, which is essentially “dust.”’

According to an Aug. 25, 2011, press release by the Arizona Department of Environmental Quality stressing a high pollution advisory: “State and county agencies measure PM-10 and PM-2.5 which are extremely small solid particles and liquid droplets found circulating in the air. PM, or particulate matter, comes from either combustion (cars, industry, woodburning) or dust stirred up into the air. High levels of PM are typically created when the air is especially stagnant or especially windy. PM-10 stands for particulate matter measuring 10 microns or less. PM-2.5 stands for particulate matter measuring 2.5 microns or less. To put this in perspective, one strand of human hair is 70-100 microns in size.”

“Over the summer, we saw a number of High Pollution Advisory (HPA) warnings issued by the Arizona Department of Environmental Quality (ADEQ) relating to PM-10, particularly in connection with the haboobs (dust storms) we’ve been having in the Valley this summer,” Lennox says. “But what is not as commonly known is that, even without a haboob, Arizonans face real health threats caused by common everyday dust generating activities.

“Indeed, the EPA has not been satisfied with what the Arizona has done in the way of dust control thus far, and because Arizona continues to exceed federal air quality standards for PM-10, we are now facing a very real possibility that the EPA will push the Arizona regulators aside and step in with their own plan to reduce PM-10.

“The real issue of concern is that, if the EPA is required to step in, Arizona will stand to lose over a billion dollars in federal highway funds,” Lennox says. “This translates to further loss of jobs, no new transportation projects, and likely intense regulation and economic impact to the construction industry — all of which will be decidedly detrimental to Arizona’s economy overall.”

Lennox says that Arizonans must prepare and prevent this from happening by doing their part, which includes refraining from leaf blowers, no fires in the fireplace, driving down dusty roads and joining forces with regulators “toward the common goal of reduction of PM-10 and maintenance of federal funding – both of which, everyone should be able to agree, are critical for the long-term health and prosperity of the Valley.”

Michelle De Blasi, partner at Quarles & Brady agrees: “Serious nonattainment areas must demonstrate PM-10 emission reductions of five percent per year until the standard is attained.  The state and local governments have instituted many measures to make these reductions.  To reach attainment, three years of clean data are needed at all PM-10 monitors… The state and local governments have instituted many proactive control measures to try to limit excesses at the monitors caused by dust.”

Utility Deregulation

As the state continues to develop renewable energy, several legal issues can arise. Court Rich, an attorney at Rose Law Group states that: “As renewable energy prices come down its implementation will grow quicker.  At some point the technology involved in distributed roof top solar energy is going to allow people not only to produce energy during the day but to store energy for power at night.”

If people are able to produce the energy they need, should they pay a utility company for its electricity service? These are the types of questions Arizona may face as renewable energy production grows.

“The State has previously looked into forms of utility deregulation…(and) could review forms of deregulation that may set up a better environment for future competition among energy providers ultimately providing lower cost electricity to all Arizonans and providing greater choices to the consumer,” Rich adds.

Balancing environmental protections with economic impacts

“Implementing more protective environmental regulations must be balanced with their economic impacts,” says Matt Bingham, attorney at Lewis and Roca.

Sometimes, small improvements that can be made come at a significant cost and may not be worthwhile for the state to pursue.

“(Government) agencies have accomplished A LOT since environmental laws were first enacted,” says Bingham, “but at some point, the costs of making further improvement are going to outweigh the benefits.  Agencies need to adequately consider industry’s concerns when developing stricter environmental standards to ensure that the benefits outweigh the costs.  Failing to do so will prolong Arizona’s economic recovery.”

Growth of renewable energy

“In Arizona, regulated utilities are expected to get 15 percent of their electricity from renewable sources by 2025 (in 2011, the goal is 3 percent),” says Bingham, attorney at Lewis and Roca. “This will require a massive expansion of our renewable energy capabilities over the next 10-15 years.”

As Arizona tries to catch up on renewable energy growth compared with some of its sustainability-driven neighboring states, many environmental impacts will need to be addressed. These include land use, water use, and effects on wildlife, endangered species and several others.

“The growth of renewable energy in the state also involves policy choices by the legislature and the Arizona Corporation Commission,” says Bingham.

Some examples:
➢    Requiring utilities to procure renewable energy.
➢    Increasing demand for solar by providing incentives.
➢    Providing tax incentives for companies who locate manufacturing and other facilities in the state and create jobs.

Arizona has essentially decided that it wants to be a hub of the growing solar industry and has made some good moves in that direction but it needs to continue pursuing an effective, comprehensively designed strategy while assuring companies that this support will not fade,” Bingham adds.

Enforcement of regulatory policies:

Since 61 percent of land in Arizona is either managed or controlled by federal agencies, many policies involving land use have a disproportionate impact upon our state, says Jeff Littell, principal geologist at Brown & Caldwell.

“By far, the greatest environmental issues facing Arizona will arise from federal agencies and their imbalanced enforcement of existing regulatory policies or the increased promulgation of new rules and regulations,” Littell says.

The state should apply balanced and measured responses to difficult environmental issues while empowering state agencies and the Legislature to defend Arizona against misapplied federal actions, Littell adds. “The results of their interaction with county and state agencies will have a profound impact on the long term success of Arizona, the diversity of our economy, and our ability to emerge from the current economic situation.”

For more information about environmental legal issues and other environmental issues, visit www.valleyforward.org.

 

Arizona Business Magazine November/December 2011