Last week's Supreme Court securities decision and recently proposed legislation which could ban some non-compete agreements in Michigan are featured in this month's briefing. That and more, including why joint bank accounts don't work well as an estate planning substitute and the importance of valuations in divorce proceedings, is below.
Happy Baseball Season!
|
U.S. Supreme Court Issues Landmark Securities Decision
A March 24, 2015, decision of the United States Supreme Court clarified the standard of liability for statements of opinion provided in registration statements.
In connection with public offerings, the Securities Act of 1933 requires the filing of a registration statement containing representations of fact or opinion about the company and the securities offered. A purchaser of securities may sue the persons signing the registration statement if the statement "contained an untrue statement of a material fact" or if it "omitted to state a material fact."
In Omnicare, Inc. v. Laborers District Council Pension Fund,
the Supreme Court found that incorrect statements of opinion provided in a registration statement give rise to liability if the stated opinion is materially untrue and subjectively disbelieved by the speaker, and, in instances where omission liability is alleged, if the issuer did not have a reasonable basis for the opinion. The decision effectively limits the ability of a plaintiff to "Monday morning quarterback an issuer's opinions" if those opinions ultimately turn out to be untrue.
John Hubbard
advocates the rights of investors i
n securities law disputes and regularly handles contingent fee plaintiff litigation. Contact him with questions on securities matters.
|
Get Them While They're Legal? Non-Competes Could Be Banned in Michigan
Recently proposed Michigan legislation would ban all non-compete agreements between employers and employees in the state. Proposed
House Bill 4198
was passed amid
highly publicized
non-compete litigation such as one involving Jimmy John's which requires all of its employees to sign non-compete agreements.
An employer's use of non-disclosure and confidentiality agreements would remain permissible under the law.
Although it's unclear whether the legislation has enough political support to pass, an employer's review of existing
protective covenants with its employees would be prudent. Contact Eric Parzianello to discuss.
|
Using Joint Accounts As A Method of "Estate Planning"? It May Not Carry Out Your Wish
Using joint bank or securities accounts as a way of leaving assets to your loved ones is dangerous as shown by a
February 24, 2015, Michigan Court of Appeals decision.
In the case of In re Soltys, Leo and Dolores Soltys had three children: Kathleen, Marlene and Dennis. They died without wills and had put only one of them, Kathleen, on their various bank and securities accounts as a joint owner. Kathleen claimed that her parents
intended for her to keep all of the money in the accounts to the exclusion of Marlene and Dennis.
In Michigan, the presumption that the survivor of a joint account was intended to take title to it can be rebutted by persuasive proof to the contrary, i.e., by proof of the decedent's intent that title to the jointly held funds not vest in the survivor. The Court found that there was no family disharmony, that Leo and Dolores trusted Kathleen and that evidence showed they put Kathleen on the accounts for the "convenience of avoiding probate." The Court therefore rejected Kathleen's claim of sole ownership.
The lack of a will left only questions and litigation for the Soltys family. If you intend to exclude family members from your estate, say so in your will. Contact
Mark Snitchler
with your estate
planning questions.
|
Business Valuations Critical For Business Owners Involved In Divorce Proceedings
 When a business owner gets divorced, the value of his or her business is often a critical component for any determination of marital property.
There are several basic methods experts utilize to determine the value of an asset including fair market value, intrinsic value and the value of the holder's interest. Valuations are typically conducted by expert witnesses to reflect the best interest of the party who hires them. A business owner will likely argue for a fair market value approach because this method reflects the true value of the business if it were to be sold in the open market. The owner's spouse, however, typically prefers a holder's interest value which actually measures the value to the owner. The final determination of value often has significant impact on the division of property.
 For more on the concept of valuations in divorce proceedings, contact Gavin Fleming or check out his blog on the topic at Cover Your Assets.
|
|
|
|
