September 2024 - MPL Law Firm

Out with the Old, In With The Old?

If you did not know, the now former CEO of Nike retired (at least that is how Nike termed it in their press release) and was replaced by a long-time veteran leader. This reminded me of some other surprising leadership changes where prior leaders were brought back to run the company (e.g., Kevin Plank @ Under Armour, Bob Iger at Disney and Steve Jobs at Apple).

What does this say about companies as they assess and implement leadership transition plans? Do you want to bring someone in new that will “shake things up”, “put a fresh set of eyes on things” or continue with the existing strategy? The answer is a little bit of all of them.

If an organization is not thinking through and implementing leadership succession plan, I would say that its long-term viability is in question. Below are some articles that may be of interest to address this vital part of an entity’s life cycle:

“It is not the strongest or the most intelligent that will survive but those that can best manage change.”

Charles Darwin

Here are some other items of interest:

Year-End Tax Strategies (eisneramper.com) (Webinar; 11/25 12pm-330pm)

As always, please don’t hesitate to email myself (jsanders@mpl-law.com), Andy Miller (amiller@mpl-law.com), Christian Miller (cmiller@mpl-law.com), Erik Spurlin (espurlin@mpl-law.com), Brad Leber (bleber@mpl-law.com) or anyone in our office with questions or comments.  

Please see all of our prior updates at this link or if you would like to be added to our email list, please click here.

BOI & FinCEN REPORTING – Have You Filed?

As we approach the end of 2024, we continue to get questions about the BOI filing requirements for entities. While there are legal challenges to this new regulation, none have succeeded on a national level. As such, please make sure you are aware of this potentially new obligation if you own or lead an entity. For those that have questions, we have an information page for your reference. In addition, on September 10, 2024, FinCEN issued new FAQs (updated sections are listed below):

C. 14. If a reporting company created or registered in 2024 or later winds up its affairs and ceases to exist before its initial BOI report is due to FinCEN, is the company still required to submit that initial report?

Yes, reporting companies still have a 90 days to file in 2024 and 30 days in 2025 (if formed/registered in 2025). If they cease to exist after the initial report but prior to the initial 90/30 day period, there is no additional obligation to file a report.

C. 15. Who may file a BOI report on behalf of a reporting company created or registered in 2024 or later that ceases to exist before its initial BOI report is due to FinCEN?

Anyone whom a reporting company authorizes to act on its behalf—such as an employee, owner, or third-party service provider.

C. 16. Is a foreign company required to report its beneficial ownership information to FinCEN if the company stopped doing business in the United States before reporting requirements went into effect on January 1, 2024?

A foreign company is not required to report its beneficial ownership information to FinCEN if it ceased to be registered to do business in the United States before January 1, 2024 (FYI, the foreign company must be entirely withdrawn from US registrations).

G. 4. Should an initial BOI report include historical beneficial owners of a reporting company, or only beneficial owners as of the time of filing?

An initial BOI report should only include the beneficial owners as of the time of the filing (unless the report is filed after the company ceases to exist, then the BOI information at the time it ceased to exist should be included).

Here are a few other items of interest:

Two reports reveal the impacts massive tax hike would have (nfib.com)

2025 is Right Around The Corner – Are You Ready?

2025 is just a few months away. Elections, recessions, inflation, interest rate uncertainty, tax rates and so on are all “top of mind” items in the media. How will these things impact your organization? What are you doing to wrap up 2024? What are your plans for 2025? If you are not thinking about it, I bet your competitors are. Below are some questions that you may want to ponder:

How would I summarize 2024 so far?
How would my staff summarize 2024 so far?
How would my customers summarize 2024 so far?
Have I met my personal 2024 goals? If not, what do I need to do?
Has the company met its 2024 goals? If not, what does it need to do?
For goals that won’t be met, should I have them in place for 2025?

While this list is not extensive, I think if you honestly review these questions, you will find some areas for growth moving into 2025. In case you want to learn more about budget or strategic planning, check out some of the articles below:

I will leave you with this quote from Yogi Berra:

“If you don’t know where you are going, you might wind up someplace else.”

Other Items of Interest

How Acquisition Financing can Lead to Massive Business Growth (youtube.com) (attractcapital.com)

Take Down That Sign!

by: Thompson Wymard

Determining the extent of free speech is always a tricky issue for individuals, politicians, or courts. Seldom, however, do you think about how it relates to your yard. Recently, the justices on the Pennsylvania Supreme Court in Oberholzer v. Galapo had to do just that, determining the level of protection afforded to yard signs. In Oberholzer, a Pennsylvania couple, over a number of years, placed twenty-three anti-racism and anti-discrimination signs directly facing their neighbor’s property. The couple, the Galapos, began their displays after one of their neighbors, the Oberholzers, called them an anti-Semitic slur. The Oberholzers alleged that the signs equated to picketing and could, therefore, be enjoined. The Galapos argued that the signs were “pure speech” and entitled to the strictest possible constitutional protection.

In litigation, a Montgomery County trial court issued an injunction allowing signs already standing to remain but directing that they not face or target the Oberholzers’ property. The trial court found that the signs were not protected because they were erected in response to the neighbors’ alleged racism and not as a rebuke of racism’s continued existence in society as a whole. On appeal, the Superior Court decided that the trial court applied the wrong test, vacated the judgment, and remanded the case for further proceedings.

The Pennsylvania Supreme Court granted an allowance of appeal to answer three questions posed by the Galapos:

Whether an injunction prohibiting ongoing publication constitutes an impermissible prior restraint under Article I, Section 7 of the Pennsylvania Constitution?
Whether the publication of language which gives rise to tort claims other than defamation cannot be enjoined under Article I, Section 7 of the Pennsylvania Constitution?
Whether the Superior Court committed an error of law by concluding that the injunction was content-neutral and therefore not subject to strict scrutiny?

Oberholzer v. Galapo, No. 104 MAP 2022, 2024 WL 3869294 (Pa. Aug. 20, 2024).

First, the Court decided that sign posting was an act of pure speech and not the same as picketing (which is distinguished as a type of speech and assembly). To the Court, the placing of signs by the Galapos in their yard was speech attempting only persuasion with a complete absence of accompanying physical acts. Furthermore, the fact that the purpose of the signs was to engage in a personal protest was completely irrelevant. The court cited precedent to emphasize that the Pennsylvania Constitution “specifically affirms the ‘invaluable right’ to the free communication of thoughts and opinions, and the right of ‘every citizen’ to ‘speak freely’ on ‘any subject’ so long as that liberty is not abused.”

The Court also held that for speech, a court usually “lacks the power to grant injunctive relief, regardless of the nature of the underlying cause of action.” Still, there is a heightened interest in one’s home, and courts may even enjoin pure speech occurring in a residential context if there is a showing that “substantial privacy interests are being invaded in an essentially intolerable manner.” The Court decided that was not the case here. The Court deemed that the Galapos’ message was aimed at highlighting the dangerous consequences of hatred and racism and that by placing the signs on their own lawn, they were communicating their own beliefs more than they were making accusations about the beliefs of others.

Ultimately, the trial court incorrectly issued its injunction against the Galapos. The placing of signs, particularly ones like these, which were general denunciations of hate and racism, is speech afforded the highest level of protection, even considering subjective intent and visibility. Still, there are ways that the government could regulate regular signs like these. Specifically, the Court mentioned that municipalities can regulate the physical characteristics of signs so long as the regulations are content-neutral. However, as the Oberholzers found out, any regulation or attempt at governmental intrusion beyond this will likely run afoul of at least the Pennsylvania Constitution. While free speech will likely remain a hotly contested political and legal topic, its status in Pennsylvania’s front lawns seems settled, at least for the time being.

I Respect Your Opinion, As Long As You Agree With Me!

This Wednesday will be 23 years since the tragic events of 9/11. Every year, I take time to remember my experience and share it with others. At the time, my wife and I lived in NYC and I was working at my office downtown that awful day. As I watched the second plane hit the South tower from my office window, I can remember my feelings of shock, sadness, fear and ultimately anger as if it were yesterday. Finally getting on a train heading back home, I can remember a bond trader sitting behind me trying to close out a position and dropping the phone gasping that one of the Towers just collapsed. I stared in disbelief and could not fathom what I was seeing. In the days and weeks after, one thing that I can tell you is that everyone, and I mean everyone, in NYC and around the country worked together towards a common goal, which was recovery.

Fast forward to today, and we as a nation have lost that feeling of togetherness and working toward a common goal. In the business setting (and pretty much everywhere else), job security, inflation, politics and more are all hot button topics. Unfortunately, social media, unclear guidance from our leaders and a rapidly approaching election has not helped the situation. I don’t recall where I heard it (probably a comedian), but I think the following quote is unfortunately applicable in the current times:

“I respect your opinion as long as you agree with me”

When this type of mentality becomes pervasive in your organization, bad things typically result. It is critical to check in with your team and be open to others’ perspectives. It does not mean you have to agree with them but be respectful and know that you are working towards a common purpose. More importantly, as long as everyone is on board with the direction of the business, the differences will work themselves out. Below are some good communication strategies that successful organizations embrace:

To wrap up, I will share this quote:

“The way we communicate with others and with ourselves ultimately determines the quality of our lives” ~ Anthony Robbins

Here are a few other things that may be of interest:

August Update From August Wealth Advisors (Thanks to Howie Greenberg for sharing)
Economic Review: September 2024 – Silvercrest (silvercrestgroup.com)
- Tunnel 2 Towers Run-Walk – This is a great organization honoring the memory of NYC Firefighter Stephen Stiller, who lost his life to save others at the Towers on 9/11. My friend, Sean O’Dowd from Silvercrest Asset Managment, is participating again in this annual event.

What a difference a year makes! Happy Labor Day….I think?

I went back and looked at my Labor Day post from last year (and the prior years before that). I try to keep it employment related for this update. Last year, I was talking about the continued issues with finding staff and what the appropriate way would be to classify them. This year, I am seeing more in the way of layoff announcements.

Just yesterday, Goldman Sachs announced that it was laying off over 1,300 workers (or 3-4% of this workforce). In the release, they couched it by saying this is a normal annual reduction. However, I would venture to guess that more are to come. The employment numbers are trending in the wrong direction and inflation’s impact on the consumer (driver of 2/3^rd of the US economy) continues, albeit at a slower pace.

With that being said, as a business owner, you may be thinking about your current workforce and how it matches to the demand levels from your customers. Do you know the appropriate way to let go of a worker in the form of a layoff? If not, check out these helpful articles:

Employee Layoffs: Important Steps to Consider (adpinfo.com)
How to Lay Off Employees? 5 Steps to Conduct a Successful Layoff | Careerminds
How To Lay Off Employees: A Small Business Guide(paymentdepot.com)

I do hope that the unfortunate decision to make layoffs do not happen. However, a business owner’s chief objective is to stay in business.

Other items of interest:

Acquisition Financing Dilemma: People vs. Loan (attractcapital.com)