In New York when the equity interest in real estate that is residential is transferred, the transaction may be subject to transfer taxes, and secured financing on such realty may be subject to mortgage recording taxes. How might a Seller’s credit line mortgage (“CLM”), or HELOC (home equity line of credit), be used and of potential savings on transfer taxes and on mortgage taxes applicable to a residential matter involving secured financing?

When are investments in US companies made by venture capital or private equity funds with foreign investors subject to review by the Committee on Foreign Investment in the United States (CFIUS)? What soon will be an Act of Congress answers that question.

Since the arrival of the Trump Administration, CFIUS has been scrutinizing investments that may be acquisitions of control by investment funds with foreign fund investors.  The Committee would seek to determine whether the foreign investor was obtaining control over the US operating business, notwithstanding that the foreign investor was investing through the fund.  If control was acquired, the investment was a “covered transaction” and CFIUS then could reject the investment or subject it to a mitigation agreement.  The existing regulatory regime did not provide much guidance beyond a few examples.  Typically the parties argued to CFIUS that the fund’s investment in an operating business was not an acquisition of control and therefore not a “covered transaction” subject to CFIUS jurisdiction or that it was purely passive.  CFIUS staff would request information regarding the fund's governance documents.  When the foreign investor was on an advisory board or committee of the fund and technically did not have control in the statutory sense, CFIUS would investigate deep and even withhold clearance.  Industries such as communications received substantial attention.

This past fall we provided an in-depth article addressing the notable discrepancy that had developed in the Circuit Courts concerning the important issue as to the breadth of the "safe harbor" provision of Section 546(e) of the Bankruptcy Code. In particular, Section 546(e) limits the power of a debtor or a trustee to avoid and recoup the financial benefits of certain pre-bankruptcy transfers made to such financial market participants as commodities brokers, stockbrokers, financial participants, forward contract merchants, and securities clearing agencies. We noted that the majority view (as espoused by, for instance, the Second, Third, Eighth and Tenth Circuits) generally applied a broad interpretation of the extent of the parties covered by the safe harbor language of Section 546(e). While, at the same time, the Courts in the Seventh and Eleventh Circuits HAD applied a more narrow interpretation. This split, as we mentioned, resulted in the United States Supreme Court agreeing to hear the issue as then most recently addressed by the Seventh Circuit in the case of FTI Consulting, Inc. v. Merit Mgmt. Grp. LP., 830 F.3d 690 (7th Cir. 2016).