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MBBP Client Goes for Super Bowl Gold – A Commercial Spot 09/04/2015

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download (3)Have you ever offered to do the laundry out of good nature just to realize you’ve accidentally ruined your wife’s best sweater?  Or what about the time you were in such a rush you threw all your clothes in the wash and that one favorite piece came out the size that could fit a doll?

Well you’re in luck!  MBBP startup client Unshrinkit, has created a patent-pending solution which saves shrunken wool clothing that fell victim to a washer or dryer mistake.

Exciting news, right?  What’s more exciting is that Unshrinkit has been named as one of ten finalists in Intuit’s “Small Business, Big Game Contest”.  The contestants are competing for a chance to win an all-expense paid 30 second commercial at Super Bowl 2016!

Vote for Unshrinkit here.

L-1B Denials on the Decline: A new dawn of reasonableness? 09/03/2015

Posted by Morse, Barnes-Brown Pendleton in Immigration.
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By John J. GalliniGrant W. Godfrey

On August 28, 2015, the U.S. Citizenship & Immigration Services (“USCIS”) released its performance data related to the adjudication of L-1B Immigration Attorney John Gallini“specialty knowledge” worker petitions through the end of the third quarter of Fiscal Year 2015.  The L-1B visa is an important visa that enables multinational companies to transfer workers to the U.S. who have been employed abroad with a qualifying, related entity if the worker has been employed in a position that requires noteworthy or advanced knowledge of the company’s products and procedures.

A review of the data shows that since the start of Fiscal Year 2015 (i.e. October 1, 2014), USCIS denials of L-1B petitions are on the decline, with the denial rate dropping from 30% to approximately 20%.  The fact that one fifth of all L-1B petitions filed can expect a denial is still sobering.  However, the downward trend is somewhat encouraging considering that according to data for Fiscal Years 2003 through 2011 denial rates had increased 500% from a low of 6% in Fiscal Years 2005 and 2006 to a high of over 30%.

One likely explanation of this downward trend in denials stems from President Obama’s executive order signed in November of 2014. The executive order included a directive to USCIS to implement better guidelines for its adjudicators to use when evaluating L-1B petitionsImmigration Attorney Grant Godfrey and to create a more uniform and predictable standard.  On August 17, 2015, USCIS released a new L-1B Adjudications Policy Memorandum.  While the new policy memorandum appears to adopt a relatively restrictive definition of “specialized knowledge”, it at least does so in a more predictable way.  The jury is still out on how USCIS will go about implementing the policy memorandum.  It is our hope that USCIS will continue to educate its adjudicators on the importance of the L-1B visa program as well as on Congress’ intent to facilitate knowledge transfer from key employees.  It is also our hope that the related government agencies continue to evaluate their standards to ensure the fair treatment of workers who drive economic innovation.

For more information on this topic please contact John Gallini or Grant Godfrey.

MBBP’s Faith Kasparian’s Article Draws National Interest 09/01/2015

Posted by Morse, Barnes-Brown Pendleton in Privacy and Data Security.
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IP Licensing and Trademark Attorney Faith KasparianMBBP Senior Attorney Faith Kasparian’s article on M&A privacy and compliance concerns (M&A Privacy and Compliance with Applicable Privacy Laws and Sharing of Customer Information) drew the attention of Reporter Katie Rucke of Communication Daily, who consequently called upon Faith to comment for a story Ms. Rucke was preparing for her publication. Ms. Rucke’s story, entitled Privacy Policies Should Say what Happens in M&A, Experts Say, appears in the August 17, 2015 edition of “the Daily”, as the “news source for communications regulation” is familiarly known.

The premise of Ms. Rucke’s story, that “a clause about the sale or transfer of data in the event of a merger, acquisition or bankruptcy should be included in every company’s privacy policy…”,  was validated by Faith’s stance. “If a privacy policy is too vague,” Attorney Kasparian is quoted as saying, “a company runs the risk that the disclosure that its data could be sold or transferred isn’t sufficiently clear, and the deal could fall through.”  Faith goes on to cite the example of a dating company in Texas which wanted to sell its list of users, but the privacy policy was found to be so ambiguous that the transaction was called off.

In the Daily story, Faith also authoritatively comments on other notable aspects of the privacy policy issue, such as a weak company privacy policy bringing down the selling price, and warns about the consequences of the FTC going after unfair and deceptive practices regarding these policies. To learn more, read the full article which can be found here.

DraftKings Kicks off Football Season at Gillette 08/26/2015

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DraftKings_Logo-495x353MBBP Client DraftKings, the leading provider of daily fantasy sport, will be opening a branded fantasy sports lounge at Gillette Stadium. The startup, which has raised $375 million in venture funding since 2012, also announced similarly-branded lounges at AT&T Stadium  and Arrowhead Stadium.

The openings are scheduled for September 10, 2015.

Read the full article.

MBBP Client Sophity To Be Featured At MIN#78 08/26/2015

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higherreslogo_swongOur client Sophity, which empowers consulting businesses to increase revenue and margin by automating the collection of critical business data, thereby improving data accuracy for billing and planning purposes, has been chosen as a presenter at the next Mass Innovation Nights event (MIN#78) on September 9th at the brand-new TripAdvisor Needham headquarters.

A mainstay of the Massachusetts innovation community, the MIN events are held once a month at varying venues, providing a showcase each time for ten select, stand-out companies as they demonstrate their ingenuity and entrepreneurship to a mixed audience of experts, bloggers and fellow innovators. The highly-prized chance to present one’s product or service at an MIN event is viewed as both an honor and an opportunity. We know that Sophity, previously an EforAllAccelerator Winter 2015 winner, will make the most of it, and we congratulate them on their selection!

Click here for more information and to vote for your favorite products.

MBBP Client ‘Fuels’ Pan Mass Challenge Riders 08/24/2015

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collage-2015-08-21This Summer’s Pan Mass Challenge athletes got a chance to taste what the folks at Fuel For Fire have been cooking up: an innovative nutrition product made entirely of real food.

MBBP client Fuel For Fire donated Banana Cocoa “fuel” for 6,000+ riders and volunteers over the course of the weekend.

Wondering how it tastes? MBBP’s own Mike Cavaretta – who rode the PMC for the 11th time this year – got a sample and gave it two thumbs up!

Way to support your community, Fuel For Fire!

MBBP Client Dane Street on Inc. Magazine Hot List 08/21/2015

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Our client Dane Street, a Dane Street Client Logo (M0739750)leading national provider of IME and Peer Review services to the Worker’s Compensation, Disability, Auto and Group Health markets, was recently named to the noted Inc. Magazine’s List of Fastest Growing Private Companies for 2014. What might be even more impressive is the fact this is the 3rd year in a row Dane Street has made the list, reflecting their 522% revenue growth during the period from 2011 to 2014. As CEO Will Fulton said, “Being recognized by Inc. Magazine for three consecutive years is a source of great pride for Dane Street.”

The focus of the List issue is on the importance of outstanding leadership in achieving success in today’s highly competitive market.  As Inc. President and Editor–in-Chief Eric Schurenberg said, “You have to remember that the average company on the Inc. 500/5000 [list] grew nearly six-fold since 2012. Business owners don’t achieve that kind of success by accident.” Clearly, Will Fulton and his savvy executive team have what it takes to take their company to the top.

MBBP is proud to partner with Dane Street and we congratulate them on this well-earned honor.

MBBP Attorneys Travel to the University of North Carolina for Patriot Boot Camp 08/18/2015

Posted by Morse, Barnes-Brown Pendleton in Attorney News, Events.
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Startup Funding Panel (2)When Charlotte Creech, Operations Director of Patriot Boot Camp contacted MBBP attorneys Scott Connolly and Joe Martinez  to serve as volunteer mentors, they were eager to accept.  Charlotte whose relationship with MBBP goes back to her intern days at Bentley College is now conducting Patriot Boot Camp, presented by Techstars.   Joe and Scott mentored a group of more than 50 military veteran tech entrepreneurs, assisted them with developing and improving their business plans and investor pitches, and provided general start-up guidance.  In addition to serving as a mentor, Joe also participated as a panel speaker on corporate finance issues.

The event received very positive news coverage on WNCN.

Read the full article.

MBBP Client DraftKings Raises $300M in Funding 07/30/2015

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DraftKings_Logo-495x353

MBBP Client DraftKings, the leading provider of daily fantasy sports announced on Monday, that Fox Sports will provide about $150 million for an 11 percent stake in the company.  Other investors include the Kraft Group, Wellington Management, and several sports leagues and franchises.

Morse, Barnes-Brown & Pendleton served as one of the counsel and advised DraftKings in connection with negotiation and documentation of the transaction. Read the full announcement.

So what’s a company to do with all this funding?  Why expand of course!  Read the latest news on how DraftKings is going global.

Congratulation DraftKings!

IC-DISC Structure Provides Permanent Tax Deferral for Exporters 07/07/2015

Posted by Morse, Barnes-Brown Pendleton in Taxation.
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Tax Attorney Robert FinkelExporters, are you taking full advantage of an important U.S. export incentive to achieve Federal income tax savings, known as the Interest Charge Domestic International Sale Corporation or “IC-DISC”? If not, this short but informative article describes how IC-DISCs generate Federal income tax savings for exporters and the basic IC-DISC requirements.

Please contact the article’s authors, Robert M. Finkel and Diana C. Española, to learn more about IC-DISCs.Tax Attorney Diana Espanola

Summer Angel / Entrepreneur Panel – Registration Open! 07/06/2015

Posted by Morse, Barnes-Brown Pendleton in Events, Venture Capital & Private Equity.
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Pitfalls, Perspectives and Possibilities of Angel Investments – Register Today!

With the proliferation of angel groups in the Boston area over the past several years, it has become increasingly challenging for entrepreneurs to navigate the process of raising money from angel investors. Better understanding the angel network and process can be extremely helpful to entrepreneurs as they go through this process.

Please join us for a lively discussion with our distinguished panel of angel investors and entrepreneurs which will address:

  • What criteria do angels use when considering an investment in portfolio companies?   How do they evaluate startup business plans? 
  • How should entrepreneurs prepare when targeting various angel groups? 
  • What common mistakes do companies make during the due diligence process?  
  • How can angels add value to their portfolio companies? 

Panelists:
Monica Brady-Myerov, Founder ListenCurrent
Paul Liberman, Co-founder, DraftKings
Ryan Moore, Partner, Accomplice (f/k/a Atlas Ventures) 
Vinit Nijhawan, Co-founder & Board Member, LearnLaunch

Get details here.

Recent Amendment to Delaware General Corporation Law 07/06/2015

Posted by Morse, Barnes-Brown Pendleton in Legal Developments, Public Companies.
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By Joe Marrow

Corporate Attorney Joseph MarrowAs expected, on June 24, 2015, Delaware Governor Jack Markell signed into law legislation amending the Delaware General Corporation Law (DGCL) that will (1) prohibit “fee shifting” provisions in corporate “charter documents” (certificate of incorporation and by-laws) and (2) permit the use of forum selection clauses in charter documents.  The amendments become effective August 1, 2015.

The prohibition against “fee shifting” provisions was adopted in response to the Delaware Supreme Court’s 2014 decision in ATP Tour, Inc. v. Deutscher Tennis Bund (ATP Tour).  In ATP Tour, the Delaware Supreme Court upheld a by-law provision that required that a party suing a nonstock corporation must pay attorneys’ fees and other costs related to intracorporate litigation.  As a result of the ATP Tour decision, many Delaware stock corporations adopted “fee shifting” provisions in by-laws.  The legislation amending the DGCL prohibits the use of “fee shifting” provisions in the charter documents of Delaware stock corporations (the new legislation does not impact the use of such provision in nonstock corporations).  New DGCL Section 109(f) provides that a certificate of incorporation may not contain any provision imposing liability on a stockholder for the attorneys’ fees or costs of any other party in connection with an “internal corporate claim.”  Similarly, new DGCL Section 109(b) provides for the same prohibition in by-laws.  New DGCL Section 115 defines internal corporate claims as “claims, including claims in the right of the corporation, (i) that are based upon a violation of a duty by a current or former director or officer or stockholder in such capacity, or (ii) as to which this title confers jurisdiction upon the Court of Chancery.”  The amendment to the DGCL does not prohibit privately-negotiated contractual fee-shifting provisions (i.e., as contained in a stockholders agreement).

In an effort to limit litigation filed in multiple jurisdictions, many Delaware corporations have adopted forum selection clauses in their charter documents.  These clauses require that litigation asserting “internal corporate claims” may be brought exclusively in Delaware courts.  The new legislation codifies the Delaware Chancery Court’s holding in Boilermakers Local 154 Retirement Fund v. Chevron Corporation in which the court upheld the validity of a Delaware corporation’s adoption of a forum selection clause in its corporate by-laws.  New DGCL Section 115 authorizes Delaware charter documents to require that “internal corporate claims” be brought exclusively in Delaware courts.  The amendment to the DGCL does not prohibit Delaware corporations from selecting a forum other than Delaware as an additional forum to hear internal corporate claims.  In addition, the new legislation does not prohibit parties from privately contracting for the selection of a forum outside of Delaware as an exclusive forum to hear such disputes.

Delaware corporations should carefully review existing charter documents to determine if amendments are warranted by the new legislation.

Any questions regarding this topic, please feel free to contact Joe Marrow.

MBBP’s Joe Martinez Elected to MITEF Board 06/25/2015

Posted by Morse, Barnes-Brown Pendleton in Attorney News, MBBP news.
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Corporate Attorney Joseph MartinezMBBP Corporate attorney Joe Martinez has been elected to the MIT Enterprise Forum of Cambridge Board of Directors. Joe takes over a seat formerly held by MBBP’s Jon Gworek, a longtime participant in MITEF.

The mission of the MIT Enterprise Forum is to inform, connect, and coach technology entrepreneurs—enabling them to rapidly transform ideas into world-changing companies, which makes it a natural fit with MBBP and our attorneys. While certainly not restricting our client base to start-ups and tech companies, we have always had a particular understanding of the needs common to them. As such, MBBP has been an active member and sponsor of MITEF since our earliest days.

MBBP is proud to continue a longstanding relationship with the Forum and congratulates Joe on his new role.

Bureau of Economic Analysis – Five-Year Benchmark Survey 06/25/2015

Posted by Morse, Barnes-Brown Pendleton in Corporate, Legal Developments.
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By Joshua E. French

frenchWhat is this?

The Bureau of Economic Analysis (BEA) regularly analyzes data related to US investment in foreign corporations.  Many large companies are specifically requested to provide data which is included in semi-annual and annual reports.  Every five years, however, the BEA produces a more comprehensive five-year benchmark survey (the last one occurred for fiscal year 2009).

How does this affect me?

At the end of last year, the BEA adopted a new rule pursuant to the International Investment and Trade in Services Survey Act, which changed the requirements for who had to report data for the benchmark survey.  Whereas prior benchmark surveys only required responses from those companies specifically requested by the BEA, the new rule mandates that U.S. Persons (including individuals, business entities, trusts, funds, etc.) that owned, directly or indirectly, at least 10% of the voting securities of a “Foreign Affiliate” (essentially any entity governed by the laws of another country) during 2014, must complete the reporting requirements for themselves and each such foreign affiliate.

What are some examples?

  • A U.S. parent entity with foreign subsidiaries.
  • The general partner of a U.S. private fund which has investments in foreign portfolio companies.
  • A U.S. person which manages an offshore private fund.

What if I don’t fill it out?

Failing to file could result in civil penalties of up to $25,000 or injunctive relief.  Willful failure to file could even result in criminal penalties of up to a $10,000 fine and imprisonment for up to one year.

What does this report entail?

Each U.S. Reporter must file one BE-10A form for its domestic consolidated business.  If the domestic business enterprise’s total assets, sales or gross operating revenues excluding sales taxes or net income after taxes exceeds $300 million (either positive or negative), you must complete the entire form.  If the U.S. Reporter doesn’t meet this threshold, it only needs to report certain sections.  The BE-10A form asks for information regarding the U.S. Reporter’s business sector, sales and employment information, contract manufacturing services, financial data (limited if the $300 million threshold is not met, more significant if the threshold is met) and import and export data.

What about for the foreign affiliates?

For each “Foreign Affiliate” for which the U.S. Reporter is required to provide data, you must file a Form BE-10B, BE-10C or BE-10D.

  • You file a Form BE-10B if the Foreign Affiliate (i) is majority-owned by the U.S. Reporter AND (ii) its total assets, sales or gross revenue (excluding taxes) or net income (after foreign income tax) exceed $80 million (positive or negative).
  • You file a Form BE-10C if the Foreign Affiliate (i) (1) is minority-owned by the U.S. Reporter AND (2) its total assets, sales or gross revenue (excluding taxes) or net income (after foreign income tax) exceed $80 million (positive or negative); OR (ii) if its total assets, sales or gross revenue (excluding taxes) or net income (after foreign income tax) exceeds $25 million but is less than $80 million (positive or negative); OR (iii) if the Foreign Affiliate is the parent of another Foreign Affiliate which has to file a Form BE-10B or BE-10C.
  • You file a Form BE-10D if the Foreign Affiliate doesn’t meet any of the above criteria.

The BE-10B is extremely detailed, seeking information regarding location, when it was formed, the ownership breakdown, what industries it is involved in, financial and operating data, and investments and transactions between the U.S. Reporter and the Foreign Affiliate.  The entire form is 24 pages and you would have to complete one form for each Foreign Affiliate that meets the criteria set forth above.

The BE-10C is slightly less burdensome (16 pages) and covers much of the same information as above, with slightly less detail.

The BE-10D is very straightforward.  A U.S. Reporter can list every Foreign Affiliate which meets the criteria for BE-10D on one form and only needs to list for such affiliate its name, location, industry code, number of employees, the U.S. Reporter’s ownership percentage, total assets, total liabilities, gross revenues, net income or loss after income tax, and any intercompany debt between the Foreign Affiliate and the U.S. Reporter.

Is this confidential?

Yes.  The BEA is not permitted to identify the individual respondents to the Benchmark Survey and may not share responses with other government agencies (including the IRS).  The information provided may only be used for analytical and statistical purposes.

When is it due?

The deadline is June 30, 2015.  There is an opportunity to request an extension through no later than August 31, 2015, but the request must be filed by June 30, 2015.

For more information contact Josh French.

M&A Video Clip: Investment Banker Engagement Letters 06/22/2015

Posted by Morse, Barnes-Brown Pendleton in Corporate, Legal Developments, M&A, New Resources.
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The second video in MBBP’s M&A Clip Series addresses the necessity of Investment Banker Engagement Letters. Corporate attorney Shannon Zollo gives a brief overview.

Catch Shannon next week discussing another common issue in M&A transactions: Cash vs. Equity

SSZvideo

Did you miss last week’s topic? No problem. Check our archive.

Insight Venture Partners Leads $92 Million Financing in Virgin Pulse 06/22/2015

Posted by Morse, Barnes-Brown Pendleton in Client News.
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VirginShortly after Virgin Pulse launched its next generation workforce well-being platform, the company completed a $92 million funding transaction. Insight Venture Partners led the round of funding, along with existing investor Virgin Group.

Joe Martinez was the lead corporate attorney on MBBP’s team, which also included attorneys Shannon Zollo, Diana Española, Jonathan Calla, David Dinwoodey and Stan Chalvire.

Morse, Barnes-Brown & Pendleton serves as counsel to Virgin Pulse, and advised it in connection with the structuring, negotiation and documentation of this transaction.

More information on the transaction can be found here.

Sports Psychologist and Author George Mumford on NPR’s OnPoint 06/19/2015

Posted by Morse, Barnes-Brown Pendleton in Client News.
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Mindful AthleteSports psychologist and author George T. Mumford was a guest recently on NPR’s OnPoint program discussing mindfulness and meditation in the NBA as a competitive edge. Mumford, who has served as “meditation master” to superstars such as Kobe Bryant, Shaquille O’Neal and Michael Jordan, is the author of a new book, The Mindful Athlete Secrets to Pure Performance.

Listen to the full broadcast at OnPoint Radio at this link:
Zen and the Art of the Free Throw

Mumford is a trademark client of Morse, Barnes-Brown & Pendleton. Congratulations George on your new book!

To learn more about the book or to purchase online, visit George’s website mindfulathlete.org.

Hot Off the Press: Basic Tax Issues In Choosing a Business Entity 06/18/2015

Posted by Morse, Barnes-Brown Pendleton in Legal Developments, New Resources, Taxation.
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Tax Attorney Robert FinkelHot off the press! MBBP tax attorneys Robert Finkel and Diana Española recently released an updated version of their article entitled “Basic Tax Issues In Choosing a Business Entity”. This article provides insight on numerous factors to consider when choosing to start a business as a C corporation, S corporation or LLC.

The full article can be accessed here.

Please feel free to contact Robert and Diana directly with any questions on this topic.Tax Attorney Diana Espanola

MBBP Client OtoSense Wins Red Herring Top 100 Award 06/16/2015

Posted by Morse, Barnes-Brown Pendleton in Client News.
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downloadMBBP Client OtoSense, developer of applications based on a new generation of sound recognition engines, was among the Top 100 North America award winners selected by Red Herring.  Each year Red Herring’s editorial team analyzes hundreds of privately financed companies with cutting edge technologies and evaluates them on quantitative and qualitative criteria.  Companies recognized in the past include Facebook, Twitter and Google, just to name a few.

Congratulations OtoSense!

VIDEO: Common Issues in M&A Transactions: Deal Structure 06/15/2015

Posted by Morse, Barnes-Brown Pendleton in Corporate, Legal Developments, M&A, New Resources.
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Head on over to MBBP’s YouTube page and enjoy the 1st in our 2015 M&A Clips Series. Attorney Scott Bleier discusses Deal Structure and other common issues in M&A transactions, as well as practical information on how to avoid complicated, expensive and time-consuming pitfalls.

Make sure to visit the M&A Blog too. You won’t want to miss Video 2 – Investment Banker Engagement Letters!

Also – have you registered for next week’s seminar: Tax Issues in M&A Transactions? Space is filling quickly!

SRBvideo

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