News

‘For-Profit Benefit’ Corporations Set for Senate Committee

Legislation advancing “for-profit benefit corporations” in Tennessee is on Tuesday's calendar for the Senate Commerce and Labor Committee. SB972/HB767 would enact the “For-Profit Benefit Corporation Act,” requiring such an entity to identify at least one specific public benefit in order to maintain its status. The bill was heard in the House Business and Utilities Subcommittee this week, where it was strongly backed by the Nashville Chamber of Commerce. Mike Yopp, chair of the TBA Business Entity Study Committee, also testified as the TBA has serious reservations about the act as written.

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New Business Court Will be Model for State

A new Business Court in Davidson County will provide “more predictable, consistent results, and more timely resolutions of business disputes,” Chief Justice Sharon Lee said in announcing the pilot project. Chancellor Ellen Hobbs Lyle will preside over the court and help develop best practices for future business courts.

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Agency Revamps Business Registration Form

The Tennessee Department of Revenue recently revamped its business registration application with the goal of making it easier to understand and use. The new form also allows users to save their work, exit and return later to any content they previously entered. Demonstration pages that show how to use the application also have been updated. The form should be used to register a new business, notify the department of an address change or pay a range of taxes, including the franchise and excise tax, sales and use tax, television and telecommunications tax, automobile rental surcharge tax and business tax.

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ABA Urges Corporations to Fight Labor Trafficking

The ABA called on Fortune 500 companies this week to help eradicate human rights abuses by adopting and implementing anti-human trafficking policies consistent with its Model Business and Supplier Principles. The group also unveiled a new database to assist companies in this effort. In a letter to CEOs and general counsels, ABA President William C. Hubbard reiterated the need: an estimated 21 million people are subjected to forced labor around the world and 168 million children are in situations of child labor. Read more from group.

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State Agency to Hold Hearing on New Securities Rule

The Tennessee Department of Commerce and Insurance will conduct a rulemaking hearing April 22 on a new rule to be known as the “Invest Tennessee Exemption.” The proposed rule would be an addition to current rules governing securities registration and exemptions. The hearing will take place at 2 p.m. Central in Conference Room 8C of the Davy Crockett Tower, 500 James Robertson Parkway, Nashville 37243. Read the full notice, which also includes the text of the proposed rule.

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Vandy Law Prof Weighs in on Licensing Boards Ruling

States have three options to react to a Feb. 25 U.S. Supreme Court ruling making state licensing boards more vulnerable to antitrust lawsuits, say two law professors whose research was cited in the decision. Rebecca Allensworth, associate professor of law at Vanderbilt Law School, and Aaron Edlin, the Richard Jennings Professor of Law and professor of economics at UC Berkeley, argue that states can change the composition of licensing boards, increase supervision of the boards or do nothing. News@Vanderbilt has more.

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Panel OKs TBA Fixes to Business Organization Laws

The TBA bill (SB144/HB 620) to make housekeeping changes to last year’s Nonprofit Corporation Act and the Business Corporation Law moved out of the state Senate Commerce Committee today by a vote of 9 to 0. The bill is sponsored in the Senate by Jack Johnson, R-Franklin, and in the House by Rep. Andrew Farmer, R-Sevierville.

The Senate Judiciary Committee also met today and recommended passage of amendments to the Rules of Appellate Procedure (SR13) and Rules of Criminal Procedure (SR12), which previously were adopted by the Tennessee Supreme Court.

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Pilot Whistleblower Sues for Wrongful Termination

A Morgan Stanley executive who apparently was a key confidential source in the FBI investigation into Pilot Flying J filed a whistleblower lawsuit in federal court last week alleging he was fired after his role in the investigation was discovered, the Tennessean reports. Financial planner John Verble filed the suit in federal court in Knoxville. He is seeking hundreds of thousands of dollars in back pay and personal brokerage funds.

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AG Joins Challenge to Sysco, US Foods Merger

Tennessee Attorney General Herbert Slatery has joined with 10 other attorneys general and the Federal Trade Commission (FTC) to seek a temporary restraining order and preliminary injunction preventing the proposed merger of Sysco and US Foods pending a FTC administrative proceeding. The group alleges the merger would significantly reduce competition nationwide and drive up prices for food service customers, the Daily Times reports. In Tennessee, US Foods has a distribution center in Alcoa while Sysco has a facility in Knoxville. Read more in the AG’s press release.

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Judge Rules Against AmEx in Antitrust Suit

A federal judge today ruled that American Express’ rules for merchants violate antitrust law, the Wall Street Journal reports. The case stems from a 2010 lawsuit in which the Justice Department contended that AmEx’s rules for merchants inhibit competition and drive fees higher for consumers. The government wasn’t seeking monetary damages in the case, but instead was trying to force AmEx to drop its restrictions.

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Attorneys Form Green Hills Law Firm

Three Nashville attorneys, including the former legal counsel to then-Gov. Phil Bredesen, have opened a law firm in the Green Hills area of the city. Trajan Carney, Steve Elkins and Leslie Curry have created Carney|Elkins|Curry PLC at 3817 Bedford Ave. in Bedford Commons. The firm will handle general civil litigation and appellate practice, with a focus on construction law, general business litigation, administrative and regulatory law, and labor and employment law. It also will offer estate planning and probate services. The Nashville Post has more on the story.

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Holder Sets 90-Day Limit for Cases Against Bankers

U.S. Attorney General Eric Holder said Tuesday that he has given federal prosecutors 90 days to determine whether they can bring criminal or civil cases against individuals for alleged involvement in the 2008 financial crisis. The announcement comes amid criticism over a lack of prosecutions or even civil cases against bankers and other financial industry executives, even as the government extracts record civil penalties from banks, Bloomberg News reports. Recommendations will be turned over to Holder’s successor Loretta Lynch to determine if any cases should be brought.

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Baker Donelson Partners with ETSU Innovation Lab

Baker Donelson is partnering with East Tennessee State University's Innovation Laboratory and the Northeast Tennessee Valley Regional Industrial Development Association to recruit international companies to the area and provide market entry assistance, the Chattanoogan reports. The Innovation Laboratory is a full service small business incubator that offers an array of business services for foreign firms entering the U.S. market.

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Butler Snow Acquires Nashville Litigation Firm

Butler Snow is acquiring locally based litigation firm Walker Tipps & Malone, according to the Nashville Business Journal. The deal will boost Butler Snow's Nashville office to more than 60 attorneys, expanding its practice lines, which currently specialize in health care, commercial litigation and business services. Walker Tipps & Malone brings along civil and business litigation as well as personal injury practices.

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S&P Settlement Means $25M for Tennessee

The U.S. Department of Justice, 18 states (including Tennessee) and the District of Columbia have reached a settlement with Standard & Poor’s Financial Services (S&P) resolving allegations that the company took part in a scheme that inflated the credit ratings of structured finance securities, hiding their true risk. The settlement requires S&P to pay $1.38 billion to the states and the Department of Justice, National Public Radio reports. Tennessee will receive $25 million for its role as a lead state in the enforcement action, according to state Attorney General Herbert Slatery.

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AG: Ban on Beer Signs Likely Unconstitutional

A little-known Tennessee law banning bars and stores from including beer brands or sales on outside signs could be unconstitutional, state Attorney General Herbert Slatery said in a recent legal opinion. Slatery found that the ban likely would not survive a legal challenge on free speech grounds because it bans “truthful and non-misleading commercial messages about lawful products.” Republican Rep. Ryan Haynes of Knoxville had requested the opinion on behalf of a constituent, the Associated Press reports. News Channel 5 has the story.

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Bass Berry Launches International Trade Group

Bass, Berry & Sims is establishing an International Trade Practice Group in its Washington, D.C., office. Thad McBride, previously with the San Diego-based Sheppard Mullin, will chair the new group, which will focus on trade, economic sanctions and anti-bribery issues. It also will handle matters before the Committee on Foreign Investment in the United States. The Memphis Business Journal has the story.

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CCA Denounces Shareholder Resolution on Re-entry Programs

Nashville-based Corrections Corporation of America is falling short in its commitment to help reduce recidivism rates, former prisoner and Human Rights Defense Center Associate Director Alex Friedmann says. He proposes the company dedicate an additional 5 percent of its net income to related programs and services, the Tennessean reports. As a shareholder of the for-profit prison owner and operating company, Friedmann has written a resolution requesting a spending increase, a proposal that CCA opposes. On Jan. 9, CCA filed a formal objection with the Securities and Exchange Commission seeking to keep the resolution out of the proxy materials it sends to shareholders. Read more from the Tennessean

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Apple, Google, Others Pay $415M in Wage Case

Apple, Google and two other Silicon Valley companies have agreed to pay $415 million in a second attempt to resolve a class-action lawsuit alleging they formed an illegal cartel to prevent their workers from leaving for better-paying jobs. The settlement filed yesterday in a San Jose federal court revises a $324.5 million agreement that U.S. District Judge Lucy Koh rejected as inadequate five months ago. Koh indicated that she believed the roughly 64,000 workers in the case should be paid at least $380 million, including attorney fees. The lawsuit, filed in 2011, sought $3 billion in damages that could have been tripled under U.S. antitrust law. Attorneys for the workers decided to settle after concluding it would have been difficult to prove the alleged conspiracy to a jury. WRCB has more from the Associated Press.

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Judge Seeks Details in Fraud Claims Against Pilot

U.S. District Judge Amul Thapar asked attorneys to provide more details about what Pilot Flying J promised several trucking companies that claimed they were cheated by the retail giant. The trucking companies claim they were cheated out of fuel rebates and discounts promised by Pilot Flying J, the nation’s largest diesel retailer with annual revenues of about $30 billion. Most of the lawsuits against Pilot were resolved by a class-action settlement, in which Pilot agreed to pay out nearly $85 million to 5,500 customers. The trucking companies involved in this hearing opted out of the settlement to pursue their own suits. The Tennessean has more.

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DOJ: Verso Can Acquire NewPage

The U.S. Justice Department and Memphis-based Verso Paper Corp. have reached a settlement that will allow Verso to move ahead with its $1.4 billion acquisition of NewPage Holdings Inc. The settlement terms became formal Wednesday. They require NewPage to sell its paper mills in Biron, Wis., and Rumford, Maine, to a subsidiary of Catalyst Paper Corp. The Memphis Daily News has more.

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Circuits Split on Definition of ‘Applicant’

In her Journal column this month, Kathryn Reed Edge makes a prediction: "As the financial crisis wanes and fewer banks are plagued by their borrowers’ credit problems, we in the business are seeing the federal banking agencies gear up for an energetic assault on consumer compliance violations." And adding to the confusion that many bank compliance officers have in interpreting the Equal Credit Opportunity Act, she writes that two judicial circuits, the 6th and the 8th, "have split on a seemingly simple issue of the definition of 'applicant' under the ECOA." She explains the important differences and advises readers of her column "Bank On It" to watch the U.S. Supreme Court for an answer.

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Appeals Court Deals Blow to U.S. in Insider Cases

The Second U.S. Circuit Court of Appeals yesterday dealt a blow to the government's success in insider trading prosecutions by reversing two convictions with a decision that also jeopardizes a third — and attempts to further define how far prosecutors can push the law in their quest to clean up Wall Street. The three-judge panel criticized the government for a blitz of Manhattan insider trading prosecutions that resulted in over 80 convictions since 2008, citing the "novelty of its recent insider trading prosecutions, which are increasingly targeted at remote tippees many levels removed from corporate insiders."  WRCB reports from the Associated Press.

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Pilot CEO Seeks Dismissal of Suit

Pilot Flying J CEO Jimmy Haslam has filed a motion in federal court seeking to dismiss a lawsuit filed by two trucking companies, WBIR.com reports. The motion, filed last week, claims the companies fail to state any viable claim against Haslam. National Retail Transportation Inc. and Keystone Freight Corp. accuse Haslam of orchestrating a scheme to cheat customers out of promised rebates and discounts. In July, Pilot agreed to pay $92 million in fines and accept responsibility for the criminal conduct of its employees while the government agreed not to prosecute the company.

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Get Ready for Changes to Tennessee Nonprofit Law

Effective Jan. 1, Tennessee lawyers will see big changes to the Tennessee Nonprofit Corporations Act. Three online video CLE courses offer insights into these changes and are available for viewing now. Choose from courses on disclosure and conflict of interest rules; charter and bylaw provisions; or entity conversions, membership exchanges, charitable assets and public benefit transactions.

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