Stinson Morrison Hecker LLP

Stinson Morrison Hecker LLP http://www.stinson.com SMH logo http://www.stinson.com/images/logo.gif http://www.stinson.com 7/2/2009 <![CDATA[Stinson Morrison Hecker LLP Continues Strong Support of ArtsKC]]> http://www.stinson.com/legalpublications/smhlupage.asp?key=1024 http://www.stinson.com/legalpublications/smhlupage.asp?key=1024
Overall, this year’s ArtsKC campaign raised a total of $442,761. Despite the economic downturn, the workplace giving component of the campaign remained strong this year, totaling $225,352, or 90 percent of the 2009 workplace goal of $250,000. Stinson had the largest number of participants and increased involvement by 16 percent while total firm contributions increased by 7 percent from last year.

“In spite of a difficult and uncertain economy, our attorneys and staff have shown their generosity and community spirit by supporting this important civic and cultural initiative,” Mark Foster, firm managing partner, said. “We strongly believe that the arts play a vital role in the culture and success of Kansas City.”

This year marks the third annual ArtsKC Fund Campaign which started in 2007 at 32 metro-area companies. The fund has granted more than $1 million in just two years. Stinson has contributed more than $62,000 to the ArtsKC Fund during the past three years.

About the ArtsKC Fund
The ArtsKC Fund, an initiative of the Arts Council of Metropolitan Kansas City, is a united arts fund in the metropolitan Kansas City area that raises new money to support a wide range of arts organizations and programs. Its purpose is to provide stable sources of new financial support for the arts, broaden access to high-quality arts experiences, and sustain excellence in the arts and arts administration. The Arts Council of Metropolitan Kansas City is a private, not-for-profit organization that works to strengthen and enrich the community through the arts. For more information about the Arts Council and our programs, visit www.ArtsKC.org.

About Stinson Morrison Hecker LLP
Stinson Morrison Hecker LLP is one of the country’s largest law firms with more than 330 attorneys representing clients nationwide in a full range of corporate, transaction and litigation matters. With attorneys in nine offices throughout five states, the firm has experience in more than 45 industry-focused areas. Office locations include Kansas City, St. Louis and Jefferson City, Mo.; Overland Park and Wichita, Kan.; Omaha, Neb.; Phoenix, Ariz.; and Washington, D.C. ]]> Thu, 2 Jul 2009 6:00:00 GMT <![CDATA[Stinson Steps Up to ‘Save the Flame’]]> http://www.stinson.com/legalpublications/smhlupage.asp?key=1022 http://www.stinson.com/legalpublications/smhlupage.asp?key=1022
Since its dedication on Nov. 11, 1926, the Liberty Memorial’s flame has honored Americans who fought in World War I. After the war, as men and women have continued to serve in defense of our country, the flame has evolved to become a symbol for all American veterans.

In 2008, an unexpected budget shortfall forced the museum to extinguish the flame. To raise awareness, community activists created the “Save the Flame” campaign. The annual cost of the flame is approximately $65,000. The iconic flame is produced by a boiler system that generates steam coupled with lights which together create the effect of a flame. Stinson is proud to support this worthwhile cause, ensuring that this iconic flame continues to burn.

About Stinson Morrison Hecker LLP
Stinson Morrison Hecker LLP is one of the country’s largest law firms with more than 330 attorneys representing clients nationwide in a full range of corporate, transaction and litigation matters. With attorneys in eight offices throughout five states, the firm has experience in more than 45 industry-focused areas. Office locations include Kansas City, St. Louis and Jefferson City, Mo.; Overland Park and Wichita, Kan.; Omaha, Neb.; Phoenix, Ariz.; and Washington, D.C.
]]> Wed, 1 Jul 2009 6:00:00 GMT <![CDATA[Stinson Morrison Hecker LLP Recognized with Top Rankings by Chambers USA]]> http://www.stinson.com/legalpublications/smhlupage.asp?key=1018 http://www.stinson.com/legalpublications/smhlupage.asp?key=1018 Chambers USA: America’s Leading Lawyers for Business. In total, seven practice areas and 26 attorneys were recognized in this annual listing of top law firms and attorneys.

The firm ranked first in the following practice areas and locations:

Corporate/M&A - Missouri (Kansas City & Surrounds) and Kansas
Environment - Missouri (Kansas City & Surrounds)
Healthcare - Nebraska
Labor & Employment (Kansas City & Surrounds) - Missouri
Litigation: General Commercial - Kansas
Real Estate - Missouri (Kansas City & Surrounds) and Kansas

Other ranked practice areas were labor and employment in Kansas, litigation in Missouri and energy in Washington, D.C.

The following Stinson attorneys were selected as leaders in their specific practice areas by Chambers USA:

Kansas City

John Aisenbrey, Litigation: White-Collar Crime & Government Investigations
Rick Connors, Labor & Employment
Paul Donnelly, Labor & Employment
Craig Evans, Corporate M&A
Parthy Evans, Environment
Dave Everson, Litigation
Dave Frantze, Real Estate
John Granda, Corporate M&A
Kate Hauber, Real Estate
Mark Hinderks, Litigation: General Commercial
Todd LaSala, Real Estate
Bob Monroe, Corporate M&A
Neil Shortlidge, Real Estate
Stacy Stotts, Environment
Dave Tripp, Environment
Matt Verschelden, Litigation

St. Louis

Chip Misko, Real Estate

Omaha

Carl Bowman, Health Care
Scott Meyerson, Real Estate
Patty Zieg, Health Care

Wichita

David Bengtson, Litigation: General Commercial
Jack Marvin, Corporate M&A and Real Estate
Mindy McPheeters, Employment
Lynn Preheim, Litigation: General Commercial
Stephanie Scheck, Employment
Ron Williams, Litigation: General Commercial

The rankings and editorial comments featured in Chambers USA are derived from interviews with clients and attorneys. Thousands of interviews are conducted by a team of more than 50 full-time researchers. Firms and attorneys are ranked on technical legal ability, professional conduct, client service, commercial astuteness, diligence, commitment and other qualities most valued by the client.

About Stinson Morrison Hecker LLP
Stinson Morrison Hecker LLP is one of the country’s largest law firms with more than 330 attorneys representing clients nationwide in a full range of corporate, transaction and litigation matters. With attorneys in eight offices throughout five states, the firm has experience in more than 45 industry-focused areas. Office locations include Kansas City, St. Louis and Jefferson City, Mo.; Overland Park and Wichita, Kan.; Omaha, Neb.; Phoenix, Ariz.; and Washington, D.C. ]]> Thu, 18 Jun 2009 6:00:00 GMT <![CDATA[Jamie Boyer Selected by FOCUS St. Louis for 2009-2010 Leadership St. Louis Class]]> http://www.stinson.com/legalpublications/smhlupage.asp?key=1011 http://www.stinson.com/legalpublications/smhlupage.asp?key=1011
Boyer, a member of the Stinson’s Business Litigation Division, focuses her practice on commercial, environmental, and employment litigation. She also is actively involved in cases challenging the adequacy of public education in various states. Boyer earned her juris doctorate from the University of Illinois in 2003 and a bachelor’s degree from DePauw University in 2000.

About Stinson Morrison Hecker LLP
Stinson Morrison Hecker LLP is one of the country’s largest law firms with more than 330 attorneys representing clients nationwide in a full range of corporate, transaction and litigation matters. With attorneys in eight offices throughout five states, the firm has experience in more than 45 industry-focused areas. Office locations include Kansas City, St. Louis and Jefferson City, Mo.; Overland Park and Wichita, Kan.; Omaha, Neb.; Phoenix, Ariz.; and Washington, D.C.
]]> Thu, 4 Jun 2009 6:00:00 GMT <![CDATA[Joshua M. Mistler Joins the St. Louis Office of Stinson Morrison Hecker LLP ]]> http://www.stinson.com/legalpublications/smhlupage.asp?key=943 http://www.stinson.com/legalpublications/smhlupage.asp?key=943 Joshua M. Mistler as Of Counsel to its St. Louis office. Mistler joins the Real Estate Division and will focus his practice in the areas of commercial real estate and finance. Mistler’s expertise in working with state and federal tax credit programs relating to commercial real estate development further strengthens the real estate practice in the St. Louis office.

Mistler represents developers, lenders and equity investors in complex real estate finance transactions, including those involving the use of federal and state historic, low-income housing and new market tax credits. Specifically, Mistler represented investors in a $30 million rehabilitation of historic properties utilizing federal and Missouri historic tax credits and low-income housing tax credits. He also represents purchasers and sellers of commercial real estate and general contractors, owners and architects in the negotiation and preparation of construction contracts, professional services agreements, and more.

Mistler received his bachelor’s degree from the University of Kansas in 1993 and his juris doctorate magna cum laude from the University of Illinois in 1999.

About Stinson Morrison Hecker LLP
Stinson Morrison Hecker LLP is one of the country’s largest law firms with more than 340 attorneys representing clients nationwide in a full range of corporate, transaction and litigation matters. The firm has experience in more than 45 industry-focused areas, with attorneys located in eight key markets, including Kansas City, Mo., St. Louis and Jefferson City, Mo., Overland Park and Wichita, Kan., Omaha, Neb., Phoenix, Ariz. and Washington, D.C. ]]> Thu, 26 Feb 2009 6:00:00 GMT <![CDATA[St. Louis Business Journal Selects Stinson Attorney Jamie Boyer to 30 Under 30 List]]> http://www.stinson.com/legalpublications/smhlupage.asp?key=791 http://www.stinson.com/legalpublications/smhlupage.asp?key=791 Jamie L. Boyer, an associate with Stinson Morrison Hecker LLP, has been recognized as one of the St. Louis Business Journal’s 30 under 30. The list honors young professionals who are the next generation of business leaders in the St. Louis area.

As a member of the firm’s Business Litigation Division, Boyer represents clients in a variety of complex and commercial claims in both Missouri and Illinois. Additionally, she is actively involved in a case challenging the adequacy of public education in South Dakota and New Hampshire.

Outside of Boyer’s legal practice, she is active in a number of community organizations including AmeriCorps St. Louis, Women Lawyers Association of Greater St. Louis and CASA St. Louis County. She also volunteers as an attorney coach with the Bar Association of Metropolitan St. Louis High School Mock Trial Program. Boyer received her juris doctorate from the University of Illinois in 2003 and graduated from DePauw University in 2000.

About Stinson Morrison Hecker LLP
Stinson Morrison Hecker LLP is one of the country’s largest law firms with more than 360 attorneys representing clients nationwide in a full range of corporate, transaction and litigation matters. With attorneys in eight offices throughout five states, the firm has experience in more than 45 industry-focused areas. Office locations include Phoenix, Ariz.; Kansas City, St. Louis and Jefferson City, Mo.; Overland Park and Wichita, Kan.; Omaha, Neb.; and Washington, D.C. ]]> Mon, 14 Jul 2008 6:00:00 GMT <![CDATA[Tracey M. Ohm Joins Stinson Morrison Hecker LLP]]> http://www.stinson.com/legalpublications/smhlupage.asp?key=787 http://www.stinson.com/legalpublications/smhlupage.asp?key=787 Tracey M. Ohm as an associate in the Bankruptcy and Creditors Rights Division. Ohm earned her juris doctorate from Washington University in 2007. She received her master’s degree in business administration from Grand Valley State University in 2000 and a bachelor’s degree in Spanish from the university in 1999. During law school, Ohm interned for the Honorable Magistrate Judge Audrey G. Fleissig of the United States District Court for the Eastern District of Missouri.

About Stinson Morrison Hecker LLP
Stinson Morrison Hecker LLP is one of the country’s largest law firms with more than 360 attorneys representing clients nationwide in a full range of corporate, transaction and litigation matters. With attorneys in eight offices throughout five states, the firm has experience in more than 45 industry-focused areas. Office locations include Kansas City, St. Louis and Jefferson City, Mo.; Overland Park and Wichita, Kan.; Phoenix, Ariz.; Omaha, Neb.; and Washington, D.C.

]]> Wed, 9 Jul 2008 6:00:00 GMT <![CDATA[Penny Slicer Named to IP Law and Businesses "Top 50 Under 45"]]> http://www.stinson.com/legalpublications/smhlupage.asp?key=768 http://www.stinson.com/legalpublications/smhlupage.asp?key=768 Penny R. Slicer, a partner at Stinson Morrison Hecker LLP was named to IP Law and Businesses “Top 50 Under 45”. The list was published in their May issue and honors the top IP attorneys under the age of 45.

Penny Slicer is a registered patent attorney with Stinson and serves as general IP counsel to a wide range of companies in the Midwest advising on all aspects of intellectual property issues. Her practice encompasses a broad range of chemical, biochemical, mechanical and software inventions including pharmaceuticals and veterinary products, water treatments, industrial processes, coatings, surfactants, office products, sporting goods and web based business methods.

Slicer received her juris doctorate from the University of Missouri- Kansas City and her Bachelors degree from School of the Ozarks cum laude.

About Stinson Morrison Hecker LLP
Stinson Morrison Hecker LLP is one of the country’s largest law firms with more than 360 attorneys representing clients nationwide in a full range of corporate, transaction and litigation matters. With attorneys in eight offices throughout five states, the firm had experience in more than 45 industry-focused areas. Office locations include Kansas City, St. Louis and Jefferson City, Mo.; Overland Park and Wichita, Kan.; Omaha, Neb.; Phoenix, Ariz.; and Washington, D.C. For more information, visit them online at stinson.com.

]]> Tue, 24 Jun 2008 6:00:00 GMT <![CDATA[Climate Change: The Waxman-Markey Bill and What it Means to Your Company]]> http://www.stinson.com/legalpublications/smhlupage.asp?key=1020 http://www.stinson.com/legalpublications/smhlupage.asp?key=1020 The law firm of Stinson Morrison Hecker LLP invites you to join us for an afternoon seminar and reception on July 9, 2009, to discuss implications of the Waxman-Markey Bill. The focus will be on what the goals of the Waxman-Markey Bill will do to energy costs and availability. We will also explore how this will impact companies and other entities in the Midwest.

Topics will include:

Climate Change Pressure and Regulatory Action
Stacy Stotts, Stinson Morrison Hecker
Waxman-Markey Bill's Carbon Dioxide Reduction and Other Goals
Dave Tripp, Stinson Morrison Hecker
What Can Be Done to Prepare?
Grant Grothen, Burns & McDonnell
Where Does the Process Go From Here?
Bert Peña, Stinson Morrison Hecker

The seminar is tailored to general counsel, CEO's and executives whose entities will be affected by climate change legislation. This includes electric generation, gas processing and transmission, transportation, cement manufacturing, industrial processing, agriculture and municipal operations, among many others. Panel members will be available after the seminar to answer more specific questions.

If you are unable to attend in person, but would like to participate, a teleconference service is available. Please contact us to request more information. We hope you can join us on July 9 at 4 p.m. for this very timely and important seminar. We look forward to seeing you there!

]]> Wed, 1 Jul 2009 6:00:00 GMT <![CDATA[Harvey Reiter to Present at Michigan State Institute of Public Utilities]]> http://www.stinson.com/legalpublications/smhlupage.asp?key=970 http://www.stinson.com/legalpublications/smhlupage.asp?key=970 Harvey L. Reiter, a partner in Stinson Morrison Hecker’s Washington D.C. office, will present at the Institute of Public Utilities’ 51st Annual Regulatory Studies Program at Michigan State University. The program, known as “Camp NARUC,” will run from August 3-14 and is designed specifically and exclusively to meet the needs of public sector regulatory professionals, particularly members of the National Association of Regulatory Utility Commissioners.

Reiter’s presentations include “Legal Standards, Precedents and Processes,” a breakout session entitled “Energy: Federal-State Jurisdiction and Legal Issues,” and “Appellate Review of Regulatory Decisions.”

For more information about Camp NARUC, visit the Institute of Public Utilities web site.

]]> Tue, 17 Mar 2009 6:00:00 GMT <![CDATA[Tax, Trusts & Estates e-Alert: Limited Liability Companies Filing Gross Receipt Returns in California May Be Due a Refund]]> http://www.stinson.com/legalpublications/smhlupage.asp?key=1023 http://www.stinson.com/legalpublications/smhlupage.asp?key=1023 Two courts in California have found that the method used by the California Franchise Tax Board in calculating the gross receipts tax on limited liability companies either organized or doing business in California and elsewhere is improper. The California Franchise Tax Board has recently conceded that refunds are due. Previously, the California gross receipts tax on limited liability companies was based on worldwide receipts, not those strictly from California. This method of determining the California tax was successfully challenged by taxpayers, including by one limited liability company organized in California but doing no business in the state. Courts found the method unconstitutional.

The California Franchise Tax Board has conceded that such limited liability companies are due refunds and has established a procedure to pay refunds. If this applies to you, please contact your income tax preparer to see if you can obtain a refund from California for all, or a portion of, the gross receipts tax that you paid.

For more information on this e-Alert, contact Charley Jensen at 816.691.2760. ]]> Thu, 2 Jul 2009 6:00:00 GMT <![CDATA[Executive Briefing - Employment & Labor Law/ Employee Benefits, July 2009]]> http://www.stinson.com/legalpublications/smhlupage.asp?key=1021 http://www.stinson.com/legalpublications/smhlupage.asp?key=1021 Executive Briefing is an electronic newsletter that focuses on emerging developments in employment & labor law and employee benefits. The full text version of Executive Briefing is available on our Web site. The following topics are included in the July issue:

U.S. Supreme Court Decides Age Must Be "But For" Cause of Employment Decision to Prevail on ADEA Claim

The United States Supreme Court issued a management-friendly decision on June 18 in an age discrimination case. In Gross v. FBL Fin. Serv., Inc., a closely divided Court held that an employee suing an employer for age discrimination must prove by a preponderance of evidence that age was the "but-for" cause of the challenged employment action. Importantly, the Court rejected the burden-shifting analysis used in Title VII cases in its 5-4 decision.

Stimulus Bill May Require Amendments to Business Associate Agreements

On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act (ARRA), which is better known as the "Stimulus Bill." Contained within ARRA is the Health Information Technology for Economic and Clinical Health Act (HITECH). HITECH modifies the HIPAA privacy and security requirements affecting "covered entities" - such as health plans and health care providers - and business associates.

Supreme Court Rules in Firefighter Testing Case

In a 5-4 decision issued on June 29, 2009, the United States Supreme Court in the case Ricci v. DeStefano reversed the lower court and remanded the case ruling that the city's action in discarding test results of firefighters applying for promotion because all but one of the top candidates was white (the exception was Hispanic) violated Title VII of the Civil Rights Act of 1964.

Reduction in Force Legal Pitfalls

Due to the economy, many employers are continuing to face, or are facing for the first time, the need to reduce their workforce. Aside from the practical business considerations that influence which positions a business eliminates and which it retains, there are a number of legal issues employers should carefully consider when planning and implementing a reduction in force (RIF).

IRS Changing Employer Provided Cell Phone Rules . . . Oh, Never Mind!

On June 8, 2009, the Internal Revenue Service issued Notice 2009-46, which requested comments on possible alternatives to current requirements that employers maintain substantiation that cell phone usage by employees was business related. This was interpreted by news and commentary sources as the IRS seeking more taxes from employees (see The Wall Street Journal article on June 12, 2009, which was picked up and posted on the Huffington Post Web site).

Recent Developments in 401(k) Plan Fee Cases

Several years ago similar lawsuits were filed against a number of Fortune 500 type companies claiming a breach of ERISA fiduciary duty arising from the mutual fund fees incurred by 401(k) plans. Some in the 401(k) plan community were predicting that if the plaintiffs succeeded with that wave of lawsuits, more waves of lawsuits would follow, with other plaintiffs' lawyers pursuing similar claims against many other companies. One of the first cases (Hecker v. Deere & Co.) was resolved by the Federal Circuit Court of Appeals for the 7th Circuit a few months ago.

An Ounce of Prevention: H1N1 Flu Virus and Discrimination

The Equal Employment Opportunity Commission (EEOC) recently provided a reminder to employers that, despite the threat posed by the H1N1 virus and the desire to take steps to ensure employees' health, federal discrimination laws may not be ignored.

Inside Washington: New Laws, Regulations and Agency Guidance

This column includes the latest news and information on ADA, DOL, FMLA, OSHA and the proposed FOREWARN Act. ]]> Wed, 1 Jul 2009 6:00:00 GMT <![CDATA[Financial Services e-Alert: Tagging Out of the TAG Component of the FDIC's Temporary Liquidity Program]]> http://www.stinson.com/legalpublications/smhlupage.asp?key=1019 http://www.stinson.com/legalpublications/smhlupage.asp?key=1019
According to its announcement (available here), the FDIC is seeking input on whether to allow the TAG program to expire as scheduled, on December 31st, or whether to extend the TAG program for six months until June 30, 2010. If extended, depository institutions currently participating in the TAG program would be given the opportunity to opt out. However, any institution opting out of the program would be required to notify its customers that, beginning on January 1, 2010, deposits in qualifying noninterest-bearing transaction accounts would not be covered by the FDIC beyond standard deposit insurance limits. For institutions that do not opt out of the extended TAG program, the FDIC would increase the fees currently assessed for the program by 10 to 25 basis points during the proposed extension period.

To stay up to date with the latest regulatory developments, check out our Financial Services Division blog at www.bankinbits.wordpress.com.

For additional information about this announcement or other liquidity enhancement programs administered by the federal government, contact Bob Monroe at 816.691.3351, Mike Lochmann at 816.691.3208 or a member of our Financial Services Division. ]]> Tue, 23 Jun 2009 6:00:00 GMT <![CDATA[Financial Services e-Alert: FDIC and ABA Clarify Required Repo Sweep Disclosures]]> http://www.stinson.com/legalpublications/smhlupage.asp?key=1014 http://www.stinson.com/legalpublications/smhlupage.asp?key=1014 12 C.F.R. § 360.8(e).

Required Disclosures

The final rule requires institutions to inform sweep account customers if their swept funds are deposits under 12 U.S.C. 1813(l): (1) within the first sixty days after July 1, 2009 and periodically thereafter, but not less than annually; (2) in all new sweep account contracts; and (3) in all contract renewals. If the accounts are not deposits, the institution must also disclose the status of the funds should the institution fail, for example, secured creditor or general creditor status.

Additional Requirements

These disclosures must be consistent with how the institution reports the funds on its Call Reports or Thrift Financial reports. The disclosure requirements do not apply to sweep accounts where: “transfers are within a single account, or a sub-account;…[or involve] only deposit to deposit sweeps,…unless the sweep results in a change in the customer’s insurance coverage.” The final rule does not require any specific language in the disclosures, allowing institutions to draft their own disclosures. Finally, the FDIC listed several examples of the means by which disclosures may be made, including client letters, transaction confirmation statements or account statements.

ABA Request for Guidance

The ABA recently asked the FDIC for guidance on how banks can ensure that repurchase agreements that are tied to sweep accounts are "properly executed," such that customers possess perfected security interests in the underlying securities. This is significant, because an unperfected security interest would result in funds being treated as deposits and potentially uninsured in the case of a bank failure.

The ABA hosted a May 21 telephone briefing on these issues. It appears from the telephone briefing and subsequent guidance from the ABA, that the focus of the FDIC regarding "properly executed" repurchase agreements that are tied to sweep accounts is "control." In particular, this requires (1) identification of specific securities in the daily written confirmations that are required by the Government Securities Act; (2) inclusion of provisions in the repurchase agreement that appoint the bank as the customer's agent and that give the customer the right in an event of default (such as bank failure) to direct the bank to sell the securities and apply the proceeds to the bank's obligations under the agreement; and (3) removal of any provisions in the repurchase agreement (and in any confirmations) that permit the bank to unilaterally substitute securities.

For further information regarding this e-alert, contact Mark Hargrave at 816.691.2434 or Sam Wilkerson at 816.691.2674. ]]> Thu, 18 Jun 2009 6:00:00 GMT <![CDATA[Corporate Finance e-Alert: The Delaware Chancery Court Limits the Scope of a Director's Duty of Oversight]]> http://www.stinson.com/legalpublications/smhlupage.asp?key=1012 http://www.stinson.com/legalpublications/smhlupage.asp?key=1012 In re Citigroup Shareholder Derivative Litigation. Its holding that the duty of oversight does not encompass business risks is welcome news for directors. However, the desire to protect directors from personal liability should not lose sight of the suspect analysis employed in that case and the risk that it may be overturned or preempted. The specific focus of the case was whether the directors of Citigroup breached their duty of oversight by failing to monitor and manage the risks of investing in subprime mortgages, even in light of various red flags.

In dismissing the plaintiffs' fiduciary duty claims for failure to adequately plead demand futility in the context of alleged "inaction" by the board, Chancellor Chandler began his analysis by applying the standard set in Rales v. Blasband, which mandates that a plaintiff must allege particularized facts that “create a reasonable doubt that, as of the time the complaint is filed, the board of directors could have properly exercised its independent and disinterested business judgment in responding to the demand.” Next, the Chancellor properly noted that the concept of oversight liability defined in Caremark is based on the concept of good faith, which is part of the duty of loyalty. Thus to establish liability under Caremark, plaintiffs must show bad faith on the part of the directors, which in the case of inaction means "the directors demonstrated a conscious disregard for their responsibilities such as failing to act in the face of a known duty to act." Instead of proceeding to trial to determine whether bad faith was present, Chancellor Chandler determined that Caremark does not extend to the monitoring of business risk and disposed of the plaintiffs' Caremark claims.

Next, the Chancellor re-characterized the plaintiffs' claims as breaches of the duty of care, stated that the business judgment rule applied to the inaction by the director-defendants, and determined that the directors would be exculpated pursuant to Citigroup's charter even if the plaintiffs could rebut the business judgment rule and prove gross negligence on the part of the directors. Following this line of reasoning, the Chancellor dismissed the case for failure to adequately plead demand futility.

Citigroup would limit the duty of oversight to properly monitoring employee misconduct and violations of law. The Chancellor states "[w]hile it may be tempting to say that directors have the same duties to monitor and oversee business risk, imposing Caremark-type duties on directors to monitor business risk is fundamentally different." He goes on to write that "[o]versight duties under Delaware law are not designed to subject directors, even expert directors, to personal liability for failure to predict the future and to properly evaluate business risk." However, this view does not appear to be consistent with the holdings of Caremark or Stone, proper application of the business judgment rule, or sound public policy and application of this view would absolve all management, not just the board, from the responsibility of monitoring business risk.

In Caremark, Chancellor Allen stated that "relevant and timely information is an essential predicate for satisfaction of the board's supervisory and monitoring role under Section 141 of the Delaware General Corporation Law." Further, Chancellor Allen noted that a director's duty of oversight requires the director to assure that information and reporting systems are "reasonably designed to provide to senior management and to the board itself timely, accurate information sufficient to allow management and the board, each within its scope, to reach informed judgments concerning both the corporation's compliance with law and its business performance" (emphasis added). In Stone, the Delaware Supreme Court adopted the analysis and holding of Caremark as the appropriate standard for oversight liability and in doing so, did not limit its application to merely the monitoring of legal compliance. The test for oversight liability as annunciated in Stone is "(a) the directors utterly failed to implement any reporting or information system or controls; or (b) having implemented such a system or controls, consciously failed to monitor or oversee its operations thus disabling themselves from being informed of risks or problems requiring their attention."

The Citigroup decision is also questionable because it afforded the directors in that case the benefits of the business judgment rule even though the facts involved inaction in allowing employees to make investments in subprime mortgages without decisions being made by the board or its committee on that subject. Generally, the business judgment rule is not applicable to instances of inaction unless the inaction was preceded by a conscious and deliberate decision by the board that inaction was in the best interest of the corporation.

The gap on oversight which this law would leave open is also out of touch with the expectations of the financial and business community: (i) rating agencies like S&P look to the adequacy of business risk oversight as one of its rating criteria; (ii) the NYSE requires the Audit Committee to discuss with management the measures being taken to address business risk; (iii) the COSO Framework on Enterprise Risk Management creates significant expectations regarding the roles of the board and management to identify, assess and manage business and legal risks; (iv) the SEC is in the process of developing disclosure requirements regarding the process for overseeing risk management; and (v) most importantly, failure to carefully identify, assess and manage business risk can lead to enormous destruction of shareholder value, as evidenced by the sub-prime mortgage meltdown and the domino effect of credit default swaps.

The Citigroup analysis is further flawed because its logical extension would leave no one with responsibility for oversight of business risk. In Gantler v. Stephens, decided on January 27, 2009 before the decision in Citigroup on February 24, 2009, the Delaware Supreme Court held for the first time that the fiduciary duties of officers are identical to those of directors. If Chancellor Chandler were correct that directors have no duty to monitor business risk, then neither would senior management. This view is not in accord with Caremark's teaching that the information and reporting system must be sufficient to allow "management and the board, each within its scope" to reach informed judgments concerning business performance as well as compliance with law.

If Citigroup's limitation of the duty of oversight holds, Delaware runs the risk of having its law in this area preempted. Senator Schumer introduced the Shareholder Bill of Rights Act of 2009 on May 19 which, among other things, would require the board of a public company to create a committee of independent directors to establish and oversee the company's risk management practices. This bill could easily be adapted, or new federal legislation created, to reverse Citigroup's distinction that directors have no duty to oversee business risk.

For more information on this e-alert, contact John Granda at 816.691.3188 or any one of our Corporate Finance attorneys. ]]> Tue, 16 Jun 2009 6:00:00 GMT <![CDATA[Intellectual Property & Technology e-Alert: Act Immediately to Protect your Trademarks from an Onslaught of Facebook Registrants]]> http://www.stinson.com/legalpublications/smhlupage.asp?key=1013 http://www.stinson.com/legalpublications/smhlupage.asp?key=1013
User names must be at least five characters in length and can only include alphanumeric characters (A to Z, 0-9) or periods. User names will be allocated on a first-come, first-serve basis to users who access www.facebook.com/username/. After selection, user names cannot be changed or transferred.

Trademark owners can protect their marks by submitting information to Facebook, Inc. via an online form entitled "Preventing the Registration of a Username" which is available here. This form requests a registration number, and information is not yet available on whether use of an unregistered common-law mark can be prevented. The form provides entry of only one mark, so owners of several marks will presumably have to submit one form for each mark to be protected.

Time is short and Facebook expects a rush of requests beginning just after midnight on Friday. As with most of these online trademark matters, an ounce of prevention is worth a pound of cure, and we strongly urge all trademark holders to consider protecting their marks through the procedure outlined above.

For more information regarding this e-Alert, contact Tim Feathers, 816.691.2754. ]]> Wed, 10 Jun 2009 6:00:00 GMT <![CDATA[Executive Briefing - Employment & Labor Law/ Employee Benefits, June 2009]]> http://www.stinson.com/legalpublications/smhlupage.asp?key=1009 http://www.stinson.com/legalpublications/smhlupage.asp?key=1009 Executive Briefing is an electronic newsletter that focuses on emerging developments in employment & labor law and employee benefits. The full text version of Executive Briefing is available online. The following topics are included in the June issue:

The United States Supreme Court Weighs in on Pregnancy Discrimination Act Pension Benefits Claim

In a 7-2 decision, the United States Supreme Court has ruled that when calculating pension benefits due at retirement, employers are not required to give women credit for pregnancy leaves taken prior to the enactment of the Pregnancy Discrimination Act.

DOL Opinion Letter Clarifies When an Employer May Deny FMLA Leave to and Discipline an Employee Who Fails to Properly Call Off Work

Under the Family and Medical Leave Act (FMLA), an employee is required to provide his/her employer with notice of the need for FMLA leave at least 30 days in advance when the need for such leave is foreseeable that far in advance. When the need is not foreseeable that far in advance, notice to the employer must be provided "as soon as practicable." In early May 2009, the U.S. Department of Labor (DOL) issued an opinion letter clarifying that, under the revised FMLA regulations which took effect January 16, 2009, an employer does not always have to give an employee two business days to provide such notice.

Employers Suffering Substantial Business Hardships May Reduce or Suspend 401(k) Safe Harbor Nonelective Contributions

An employer who had committed to make safe harbor nonelective contributions to its 401(k) plan but has encountered a substantial business hardship may now amend the plan during the plan year to eliminate or reduce that contribution. This is the effect of a proposed Treasury Regulation issued in May 2009, which may be relied upon until final regulations are promulgated.

Online Posting of Form 5500 Actuarial Information of Defined Benefit Plans Now Required

The Pension Protection Act of 2006 (PPA) has amended ERISA to require the Department of Labor to post a defined benefit plan's actuarial information on the Internet and, if applicable, for the plan sponsor to post the same information on its internal Web site (intranet). This change will require action of plan sponsors of defined benefit plans that maintain an intranet site for participant communications.

Inside Washington: New Laws, Regulations and Agency Guidance

This column includes the latest news and information on ADA, DOL, EEOC, OFCCP and OSHA. Also featured is President Obama's announcement of Judge Sonia Sotomayor as his pick to be the next United States Supreme Court Justice. ]]> Mon, 1 Jun 2009 6:00:00 GMT <![CDATA[Real Estate e-Alert: Changes to Missouri TDD Statute]]> http://www.stinson.com/legalpublications/smhlupage.asp?key=1008 http://www.stinson.com/legalpublications/smhlupage.asp?key=1008

House Bill 191 now requires that the petition creating a TDD include a detailed budget indicating estimates for (i) real physical improvements; (ii) estimated land acquisition expenses; (iii) estimated expenses for professional services; and (iv) estimated interest charges. Although many TDD petitions included such estimates, the statute now requires this detail in all petitions.
The TDD Statute previously gave discretion to the circuit court whether or not it would hold a public hearing on the question of the creation and funding of the proposed TDD district. House Bill 191 now requires the circuit court to hold at least one public hearing if the petition for creating the proposed TDD district was filed by the real property owners within the district. The public hearing is still discretionary for petitions filed by registered voters.
House Bill 191 now makes it clear that the Missouri Director of Revenue performs all functions necessary for the administration, collection, enforcement, and operation of the sales tax authorized by the TDD Statute. Previously, this power was granted to the district itself, which frequently delegated its power to a municipality or a private entity.

House Bill 191 contains other significant provisions applicable to developers and businesses operating or considering operations within the state of Missouri. Please contact one of our attorneys for further information on development incentives, to assist with the creation of a transportation development district, or for assistance with other economic incentives that can be obtained in connection with job creation or business commencement or expansion in Missouri.

For information on this e-Alert, contact Dave Frantze at 816.691.3181, Blythe Jones at 816.691.2458, or one of our Real Estate attorneys. ]]> Fri, 29 May 2009 6:00:00 GMT <![CDATA[Real Estate e-Alert: Missouri Historic Preservation Tax Credit Program]]> http://www.stinson.com/legalpublications/smhlupage.asp?key=1006 http://www.stinson.com/legalpublications/smhlupage.asp?key=1006 As the most recent legislative session in Missouri came to a close, one of the most hotly debated issues left to resolve was the status of Missouri’s Historic Preservation Tax Credit program. Due to current economic conditions, all state tax credit programs, including state historic preservation tax credits (SHPTC), were reviewed and scrutinized. At various times throughout the spring, proposals were put forth seeking to cap the amount of SHPTC available for use by projects, and to eventually sunset the program all together.

Faced with the possibility of losing a key program which helps stimulate development and create much needed jobs, various constituencies made their voices heard in Jefferson City. The end result came in the passage of HB 191.

The final bill does include an annual cap on SHPTC in the amount of $140 million. However, the cap number represents an excellent compromise between groups concerned about escalating state tax “subsidies” and budget uncertainty, while balancing the need to provide developers with resources to undertake these important projects. Additionally, the new legislation exempts out small projects (projects with less than $1.1 million in “qualified rehabilitation expenditures”).

Because of the new cap, developers seeking to utilize SHPTC are encouraged to submit application materials early. There is a requirement, however, that a project commence rehabilitation within two years of the department’s approval of an application. The bill requires that all applications for SHPTC be prioritized based on the application’s postmark. Additionally, developers are urged to ensure that their applications meet the requirements set forth in the bill. If an application fails to meet these requirements, the application will be disapproved and lose its place in line. The postmark on the resubmission will then control the priority the project receives. The requirements are:

Proof of ownership or site control
Floor plans of existing structure and architectural plans
Estimated costs of rehabilitation, basis of the property, and estimated start and completion dates
Proof that the property is an eligible property and is a certified historic structure, or a structure in a certified historic district
Any other information reasonably required by the Missouri Department of Economic Development

While some were disappointed by the cap, it does give certainty to the state’s budget, which was a concern of opponents of the SHPTC program, while protecting historic preservation, continued job creation and economic development. Based on SHPTC usage in FY 08, the net effect of the cap, together with the small deal exemptions, will likely be minimal.

Missouri’s SHPTC program has long been deemed a model program on a national level, and the passage of this legislation will help ensure that it remains that way. The changes to the program enacted through the passage of HB 191 will ensure that the program continues to provide significant economic incentives for growth on a state-wide level, while helping the state manage its finances.

For further information regarding this e-alert, contact Joshua Mistler at 314.259.4548. ]]> Tue, 26 May 2009 6:00:00 GMT <![CDATA[Morgan Stanley Capital Group, Inc. v. Public Utility District No. 1 Revisits the Mobile-Sierra Doctrine: Some Answers, More Questions]]> http://www.stinson.com/legalpublications/smhlupage.asp?key=1005 http://www.stinson.com/legalpublications/smhlupage.asp?key=1005 In Morgan Stanley Capital Group, Inc. v. Public Utility District No. 1 of Snohomish County, Washington,1 the Supreme Court provided its most detailed exposition of the Mobile-Sierra doctrine since the Court decided the doctrine‘s namesake cases in 1956. This article describes the Morgan Stanley ruling, including the relevant aspects of the underlying proceedings before the Federal Energy Regulatory Commission (FERC) and the United States Court of Appeals for the Ninth Circuit.

Morgan Stanley clarifies a number of important issues related to the Mobile-Sierra doctrine, and, in so doing, reaffirms the role of contracts in the regulatory scheme established by the Federal Power Act (FPA) and the Natural Gas Act (NGA). Further, while explicitly declining to reach the issue of whether the FERC‘s market-based rate program for electricity sales complies with the FPA, Morgan Stanley indicates that the Mobile-Sierra presumption applies to bilateral market-based rate contracts and finds that market dysfunction that affects a contract rate is alone not sufficient grounds to refuse to apply the Mobile-Sierra presumption of justness and reasonableness.

The ruling, however, leaves unanswered questions concerning the scope of the FERC‘s authority to modify jurisdictional contracts under Mobile-Sierra. In particular, the Court‘s conclusion that the Mobile-Sierra presumption–that a contract is just and reasonable–does not depend on the FERC having had an initial opportunity to review the contract without applying the presumption may prompt arguments that the FERC has limited authority to reject contracts–including negotiated settlements–even where the contracts fail to adhere to the FERC‘s policies and regulations. The Court‘s ruling on the ―initial opportunity issue also raises the stakes with respect to the issue of whether non-parties to a contract must overcome the Mobile-Sierra presumption of justness and reasonableness in challenging a jurisdictional contract. Similarly, the Court‘s discussion of the circumstances where the Mobile-Sierra presumption does not apply, and the showing necessary to overcome the presumption, presents issues that will need to be resolved by the FERC in the years to come.

For the full version of this article, please click here.

This article was published in the Energy Bar Association's Energy law Journal.

John E. McCaffrey is a partner at Stinson Morrison Hecker LLP. He can be reached at 202.728.3013 or jmccaffrey@stinson.com.

]]> Thu, 21 May 2009 6:00:00 GMT