Intercompany loan agreements

It’s probably unfair to say that it’s a hallmark of a well-run company that it has established processes for documenting all of the processes which are key to its business. That would be easy to assert, but very hard to do. But if that principle did apply, then it would also apply to the creation and documentation of intra-group loan relationships. This includes cash-pooling arrangements, which typically amount to loans made by the various participating companies to the cash pool leader.

From a legal perspective, this is not rocket science. The key terms will include:

drawdown and utilisation of advances conditions precedent to drawdown term (repayment date) and the borrower’s ability to repay early (prepayment) interest rates, interest periods and compounding security and subordination events of default triggering early repayment, and default interest

As with any intra-group arrangements, a critical litmus test is whether directors can properly approve the terms of the loan relationship as being in the interests of each individual company of which they are a director.

From a lender’s perspective, this ‘corporate benefit’ issue is particularly relevant for loans by a subsidiary to a parent company or a sister company. It may less of an issue in the case of a loan by parent to its subsidiary, since the parent has a clear financial interest in the success of its investment. However, for upwards or sideways loans within a group structure, factors such as the borrower’s ability to repay the loan will obviously be important. It should go without saying that it’s not enough for the making of the loan to make sense from a group-wide perspective. The loan must also be justifiable from the perspective of each legal entity participating in the arrangements.

In one extreme but typical example, a group finance company made a loan of over a billion dollars to a special purpose vehicle (SPV) which used the loan proceeds to acquire listed securities in the market. The SPV was a sister company of the finance company – in other words, they were both subsidiaries of the same holding company. The loan was expressed to be repayable on demand. As was expected, the value of the securities fell almost immediately, leaving the SPV with negative net assets. It would be hard to justify those arrangements as being for the corporate benefit of the lender, in the absence of additional arrangement such as a parent company guarantee to support the borrower’s obligations.

From the borrower’s perspective, a parent company guarantee in favour of the lender doesn’t help. If the guarantee were to be called on – and the parent procured repayment of the loan amount to the lender – the balance sheet position of the borrower would not be improved. It would simply owe the same amount to the parent rather than the original lender. From the borrower’s perspective, it would therefore need some additional comfort, such as a subordination agreement with the parent or some other commitment of financial support.

Please see the following link for examples of short-form intercompany loan agreements.

http://www.groupreorganisation.com/?p=115

Michigan Unemployment Benefits Made Easy

Michigan Unemployment Benefits Explained

The State of Michigan is facing tough times. With rising unemployment and the often complex unemployment benefits system, mistakes are being made and workers are wrongfully being denied their unemployment benefit payments. With new developments in unemployment laws and the federal stimulus package, unemployment benefits in Michigan are worth more than ever. For some beneficiaries, benefits can reach 72 weeks and nearly $30,000.

If an initial claim for unemployment benefits is denied, it is important for an unemployed worker to understand why they were denied, and what they can do to request a re-determination or appeal to protect their rights and get a proper and just determination. This article addresses the basic framework and is intended to help the Michigan unemployment applicant understand the process. In difficult situations, experienced legal representation may be essential.

The Unemployment Application Process in Michigan

During their first week of unemployment, unemployed workers are asked to visit the Michigan Unemployment Insurance Agencys website at: http://www.michigan.gov/uia, the website is available to file new unemployment claims Monday Saturday from 7am to 7pm. There is also a telephone option: 1-866-500-0017. Unless instructed otherwise by Unemployment Agency staff, applicants must register within two to three business days at their local Michigan Works! Agency to upload a resume to the Michigan Talent Bank.

First time applicants will receive in the mail the following items:

–A determination showing the amount of weekly benefits and the number of weeks they may receive based on the wages earned.
–A booklet with detailed information about their rights and responsibilities for unemployment benefits.
–If there is an eligibility issue with their claim, they will receive a separate notice.

The unemployment claim process starts with an initial determination by the Unemployment Agency as to whether the applicant is eligible. Provided the applicant was fully employed in an eligible job, the agencys determination is based on two questions: whether the separation from employment was voluntary and, if not, whether the employment termination was based on misconduct. The initial determination is a first look and is not often without mistakes.

Unfortunately, mistakes in the initial unemployment determination are common. The most common mistakes involve inappropriate assumptions about a resignation or overreaching claims of misconduct in employer challenges. Often, employers challenge the benefits based on general performance issues or tardiness, issues not considered to be misconduct under the unemployment law. Misconduct under the employment laws is meant to be a limited category related to outright theft, misrepresentation or workplace drunkenness, not generalized performance issues.

When it comes to voluntary termination of employment, mistakes are often based on assumptions when employees resign just to protect their record, when in fact, many employees resign only involuntarily and only because they have been told their job is ending. Such resignations are not voluntary under the Michigan unemployment laws and should not be used to deny benefits.

Basic Requirements for Michigan Unemployment Benefits

The Michigan unemployment agency looks at the unemployed workers earnings in the first four out of the past five completed calendar quarters to determine if they are eligible for benefit payments. If they do not qualify under the standard base period they will then be reexamined using the four most recent quarters called the alternate base period. There is one last section to determine qualifications that the unemployed worker will have to certify with the State of Michigan. According to the UIA website, To be eligible for unemployment benefits, you must be unemployed and able to, available for, and actively seeking suitable full-time work. Some may worry that if they left their previous employer by turning in a resignation that they would be exempt from unemployment benefits. Although initial unemployment determinations may result in a denial of benefits, the fact of a resignation should not result in a denial, if it is involuntary.

The Process for Unemployment Beneficiaries Explained

Once qualified with an approved claim, the unemployed worker must continually certify their unemployed status with the State of Michigan every other week. The unemployed worker is expected to report to the UIA through the use of the Internet or telephone using Michigans Automated Response Voice Interactive Network, (MARVIN). A scheduled MARVIN appointment is based on the last two digits of their Social Security number. To access MARVIN via the Internet, unemployment beneficiaries can visit http://www.michigan.gov/uia and select the UIA Online Services for Unemployed Workers link. A free UIA online account can be created. MARVIN can also be reached at 1-866-638-3993, to find out scheduled times, beneficiaries can visit http://www.michigan.gov/uia.

How Much Will Michigan Unemployment Beneficiaries Receive and How?

Once approved and certified, it is important to know how the UIA determines the amount of unemployment benefit payment and how to receive it. During the unemployment application process, the UIA will ask the unemployed workers to select a choice of payment through either a state issued debit card or direct deposit into their personal bank account. To determine the specific amount of benefit payments, the UIA staff multiplies the highest amount of wages paid in any base period quarter by 4.1%. For each dependant claimed, the UIA adds $6 per dependant up to five. Currently, the weekly benefit amount is capped at a maximum of $362.

To determine how many weeks of benefits are available to an unemployed worker, the UIA multiplies total base period wages by 43% and then divides that answer by a weekly benefit amount. The initial benefit cannot be less than 14 weeks or more than 26 weeks. However, many emergency changes to the process have resulted in a series of extensions for unemployment beneficiaries. For some, benefits may extend up to 72 weeks. The new federal stimulus package may also include subsidy for extended COBRA benefits for some beneficiaries.

Special Emergency Extensions Available to Michigans Unemployed Workers

In recent developments, the Federal Government has provided an extension of benefits under the Emergency Unemployment Compensation (EUC), which includes a 20 week extension upon the initial state benefit period. The second part of the EUC is an additional 13 week extension upon that. In addition, Michigan Governor Jennifer Granholm signed an extension benefit for an additional 13 weeks as of February 13th, 2009. Therefore, the total of available weeks of unemployment benefits that unemployed workers may receive would equal 72 weeks. The unemployment agency is responsible for notifying those eligible for the extensions when they are approaching the end of their initial claim.

What to Do If Michigan Unemployment Benefits are Denied or Challenged

The Michigan unemployment process is complex and has many layers. The agencys first decision is called a determination. After that the employer or the employee has 30 days to challenge the determination and request a redetermination. If either side is not satisfied, they are given an additional amount of time to request an appeal, to be heard by an administrative law judge at the unemployment agency.

For both sides, the appeal will be the first chance to present evidence and take testimony. After the appeal, challenges may go on to a board of review and then to Michigans court system. The biggest mistake people make is to give up on the process too early or to allow deadlines to pass. Employees often lose their rights sometimes worth over $20,000 simply by missing the deadlines. Sometimes, employers succeed by making continuous challenges and waiting for the employee to give up.

Other times employees may lose because they did not prepare for the appeal, or they are not adequately represented when they get there. When it comes to an appeal, many employees lose because they are not prepared to give testimony at the hearing or they are not represented. Simple steps can be taken to protect unemployment appeal rights. Unemployment advocates are available free of charge through the agency and some private employment attorneys are willing represent individuals in the unemployment process for a flat fee. Whatever they do, beneficiaries should never let their unemployment agency deadlines lapse with out seeking qualified legal advice.

Its the business, stupid bringing strategy tools into the practice of law

A lawyer who has not studied economics is very apt to become a public enemy” Brandeis J. Law schools do not generally teach anything about business, as opposed to business law. As a result, lawyers learn about business legal forms and contracts, but nothing about the non-legal imperatives of running a business like corporate finance, marketing, or corporate strategy. Furthermore, as members of an inherently conservative profession many lawyers resist engaging in any topic that goes beyond the four corners of their legal brief (“I only give legal advice”).

This is highly problematic for business, because every legal problem comes within a business context, and lawyers who are not willing or able to understand that context cannot give good advice; Brandeis J.s dictum is as applicable with respect to business knowledge as it is with respect to economics, and there remains a significant knowledge gap between the practice of law and the practice of business.

In some cases lawyers address this knowledge gap by specializing not only in a particular field of law but also in a particular industry, and in this way they develop industry expertise in substitution of more general business knowledge. At the same time the scale of the knowledge gap can be masked by the natural hubris of the legal professionlawyers who are at the pinnacle of every information and decision making-tree they are associated with can suffer from the illusion of knowing more, not less, than their clients.

A great deal has been written about alternatives to lawyers billing by the hour, or lawyers working from home instead of at a desk in a big law firm, but in my view these topics are relatively trivial. A much more significant topic is bringing business financial and strategy tools into the practice of law in order to develop a multi-disciplinary approach to the delivery of legal services.

In a litigation context for example the focus of lawyers should not be on winning their clients case but on solving the underlying business problemsthe disputes which were the reason clients came to them in the first place. One very simple example of this would be to compare the cost of litigation with the cost of buying the other sides companyif the two numbers bear some similarity then a rare opportunity for a litigator to participate in value creation instead of value destruction may exist.

Business clients want to know how much their case will cost, how long it will take, what the risks are, and the probable result. These four basis elementscost, risk, time, and reward, are the foundation of the financial analysis of any business proposal, and there is no reason why lawyers cannot make reasoned and reasonably reliable assessments of these elements in any given legal contextthe law is no more uncertain than many projects undertaken by business, and in many cases is substantially more certain.

Once we have attached numbers, or a range of numbers, to the four elements then we can financially model them the same way we can model any other business proposal. We can start with a simple spreadsheet comparing cost to risk-discounted reward, or add time to give a net present value calculation (which will show how high the reward would have to be to justify the risk over time, all other things being equal). Nor does it stop therewe can go on to decision tree modeling to assess the value of certain choices and options, and use sensitivity analysis or tornado diagrams to identify the assumptions in the model around which most of the risk in the model revolves; this in turn allows us to go back and further assess the assumptions.

I am aware of no lawyers anywhere in the world who consistently adopt this multi-disciplinary approach in their practices. Discovering such lawyers, and developing a framework with readers to put some flesh on the bones of this theoretical multi-disciplinary approach, is a key objective of this Journal.

Legal Details About Az Divorce Documents On The Internet

A county Clerk of Court is the office-in-charge of Divorce Records Arizona. If you want to retrieve a certain divorce file, you can get it at the Clerk of Court that finalized the divorce. You do not have to worry about legality issues because it is legal to retrieve files that are considered as public records. The state of Arizona does not have a main storage for divorce files even though it has an Office of Vital Records. But if you have no idea which county Clerk of Court has the files you need, you can ask for help from the Office of Vital records.

Only divorce files are considered by the court as supporting documents to prove the dissolution of a marriage. Before you tie the knot with your lover, it would not hurt if you check if he or she got involved in a previous marriage or not so you will not have to deal with legal problems one of these days. If you have been married in the past but now want to enter into another marriage, prepare your own divorce file when you apply for a license to marry.

Only the husband, wife, their legal representatives, and any other individual that has the consent of the court can access and view everything that is included on the files. If you are otherwise, you will be given limited access to the files, which includes the names of the husband and the wife and the date and location where the divorce was finalized. Pieces of information that are deemed as personal, like the terms and conditions of the case, are kept private.

To retrieve the records, submit a request at the county Clerk of Court. You have to supply the full name of either the husband or the wife. If you can add more information such as their place of residence, their birthday, or their job description, it will make the search process faster. You may also opt to mail your request if you cannot hand it personally to the Clerk of Court. However, you will have to wait about two to three weeks to get the files. You will be charged a certain amount for retrieving the files and the amount varies from county to county.

You can also retrieve the files from online search tools that venture in supplying divorce files to the public. If you browse the Internet, you will find various search tools that can help you get the files you need. Fortunately, not all of them can be trusted. In order to check if they are a reliable source or not, research about their background first.

There are search tools that will charge you for retrieving divorce files but there are also those that will offer you Free Public Divorce Records. You will be granted limited information but they will suffice in proving if a divorce is final or not. And if you are unaware which county to search, look for a search tool that gives you an option to search all the other states of the country.

Comparing The Most Beneficial Tricks For Finding The Right Employment Lawyers

Knowing the significance of employment laws needs to be one of the most essential things that every business must do if they want to operate legitimately. These laws and regulations are related to your personnel and how you are handling them.

Most of the employers these days don’t really have a concept about these employment laws and how they work. Employment attorneys are vitally important because of this reason.

Most of you are probably confused why you need these lawyers for your company, but you will find a lot of circumstances where they are badly needed. Listed below are a few of the advantages that you may get by hiring employment lawyers.

If you do not have any idea about the employment laws and you are having some troubles with regard to the demands of your workers, you need to definitely hire an employment lawyer. They will properly explain the rights of your employees and all the settlements and bonuses that are required to be given. The only thing that you have to know is that employment laws and regulations are focused on the workers. It means that no matter what you do, the laws are composed of rules and regulations that are favorable to them. Try to hire the best lawyer to manage these issues appropriately because it will not be easy to manage these legalities.

Claims that are originating from your staff should not be dismissed because they can always file a legal case against you if you’re not honoring their legal rights. Without an employment attorney, it will be tough to find a good answer to all of these uncomplicated problems.

You should always make a choice based on the employment legislation when you’re referring to compensation, personnel contractors, bad behavior in the workplace and more. An employment attorney will help you think about the best legal action to avoid difficulties in the foreseeable future.

Businesses will never be safe from legal complaints and you will certainly have lots of difficulties if an worker files a complaint against your company. When you have an employment attorney, all of your decisions will all be depending on the employment law.

As the owner of the company, your responsibility is to handle the day to day operations of your enterprise. It means that you don’t have the time to study all the things that are related to the employment legislation as they can already be taken care of by the Human Resource department. You need to consider a professional employment attorney if you wish to make sure that you are handling your personnel properly. Though you will need to spend some extra resources when you employ a attorney, it is worth the shot because it will provide a lot of benefits to your organization. They will certainly help you prevent a few legal difficulties in the future.

It’s not really a bad thing to spend a few money for the future, especially if you’d like to make the right decisions. If you wish to make sure that there will be no problems between your firm and your workers, hiring an employment lawyer is a must.