Foley Hoag LLP

SUMMARY

The I.R.S. has recently issued its annual cost-of-living adjustments applicable in 2011 to qualified retirement (pension, profit-sharing, § 401(k), money purchase and stock bonus) plans. Generally, there has been such a low rate of inflation in the nation’s economy that many of these cost-of-living adjustments will remain unchanged.

SUMMARY

As the end of 2010 approaches and we receive numerous inquiries concerning developing hiring plans, I thought you might be especially interested to note some particulars about the Hiring Incentives to Restore Employment Act (the “HIRE Act”) which was enacted earlier this year to stimulate prompt hiring of workers by businesses.

SUMMARY

Late yesterday afternoon, the U.S. House of Representatives passed legislation that would tax carried interest income (sometimes called “performance allocations” or “incentive allocations”) at ordinary-income rates beginning in 2010. The legislation (H.R. 4213, the “Tax Extenders Act of 2009”) also provides that carried interest income will be subject to self-employment taxes, regardless of certain exceptions previously available.

We will monitor the bill's progress in the Senate and Conference Committee and provide more detail as the bill moves closer to enactment.

SUMMARY

Insider trading cases often have focused on “the CEO’s brother-in-law” or similarly situated individuals who used a tidbit passed along at Thanksgiving dinner to make a quick and easy personal profit.  Today, hedge funds have joined “the CEO’s brother-in-law” as the target of insider trading cases.  In the hedge fund context, charges are being based on a hedge fund employee’s collection of information as part of the employee’s job in trading the hedge fund’s assets, unlike the classic cases based upon receipt of an isolated “tip” outside of the work setting that will be used to generate profit for an individual.

SUMMARY

On October 27, 2009, the U.S. House of Representatives Financial Services Committee (the “Committee”) voted 67-1 to approve the Private Fund Investment Advisers Registration Act (the “Bill”), sponsored by Representative Paul E. Kanjorski (D-PA). The Bill would require advisers to private funds (which would include advisers to hedge funds and private equity funds as defined by the SEC, but not advisers to venture capital funds) to register as investment advisers with the Securities and Exchange Commission (the “SEC”) under the Investment Advisers Act of 1940, as amended.

SUMMARY

On July 2, 2009 the United States Bankruptcy Court for the Southern District of New York issued an order establishing September 22, 2009 as the deadline for filing proofs of claims against Lehman Brothers Holdings Inc. or any of its debtor affiliates (the “Order”). The Order provides that any holder of a claim against the Debtors who fails to file a proof of claim before the September 22, 2009 deadline will be forever barred from asserting such claim thereafter. The Order also establishes certain procedures that must be followed when filing proofs of claims, and sets forth additional requirements for claims based on either a derivative contract or an obligation that was guaranteed by one of the Debtors.

SUMMARY

On Friday August 7, the IRS further extended the deadline to file Treasury Form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts, commonly known as an “FBAR”) for (i) persons who have only signature authority over a foreign financial account, but no financial interest in the account; and (ii) persons who have financial interests in “commingled funds,” including offshore hedge funds, private equity funds and mutual funds. The extended deadline is June 30, 2010, and applies to FBARs for 2008 and earlier years. The extension does not apply to persons who have financial interests in traditional financial accounts such as bank and brokerage accounts.

The IRS made the announcement in Notice 2009-62 [.pdf]. The IRS also announced that it is studying these questions and has solicited comments from interested parties, with a view to issuing regulations clarifying the requirements.

SUMMARY

As a follow up to our June 18, 2009 Foley Adviser, we note that the Internal Revenue Service (the “IRS”) has announced an extension to the previously announced deadline for the Treasury Form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts, commonly known as an “FBAR”) from June 30, 2009 to September 23, 2009 (without penalty) for filers who have paid all taxes and reported all income for 2008.

SUMMARY

On June 17, 2009, President Barack Obama released a series of proposed initiatives entitled Financial Regulatory Reform: A New Foundation (the “White Paper”) [.pdf], which, if implemented, would effect sweeping reforms to the U.S. financial regulatory system. Certain individual proposals of particular importance to investment advisers and the alternative investment community are summarized below. 

SUMMARY

June 30, 2009 Deadline

Every U.S. person with a financial interest in, or signature or other authority over, any financial account outside the U.S. must file an annual report on Treasury Form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts, commonly known as an “FBAR”) if the aggregate value of all such accounts exceeds 10,000 USD at any time during the calendar year.  The FBAR for 2008 must be received by Treasury by June 30, 2009. 

SUMMARY

Included in this Issue:

• Get Your Pole Vaults Out - Mark Haddad
• The Numbers - Amanda Vendig
• Selected New England Series A Round Transactions: First Quarter 2009
• Selected New England Series B and Later Round Transactions: First Quarter 2009
• Terms of Selected New England Series A Rounds 2009
• Terms of Selected New England Series B and Later Rounds
• The Activity Level Summary
• New England Series A and First Round Transactions by Industry
• New England Series B and Later Round Transactions by Industry
• National Series A and First Round Transactions by Industry
• National Series B and Later Round Transactions by Industry
• Size of New England 2009 Series A and First Round Transactions by Industry
• Size of New England 2009 Series B and Later Round Transactions by Industry

SUMMARY

Trade secrets can be a valuable component of an intellectual property (IP) portfolio, whether as a complement to patents or as an alternative. Companies benefit from an IP portfolio that matches the unique benefits of trade secrets and patents to the types of information they seek to protect. Trade secret protection can be available immediately, without going through a government agent, whereas a patent is available only after an application to and approval by the government. And unlike patents, trade secrets provide IP protection of potentially infinite duration. Trade secret protection is also available for a broad array of information for which patents are not available.

SUMMARY

Delaware has added two new sections to the General Corporation Law, effective August 1, 2009. While the legislature appears to be concerned about improving shareholder access to proxy materials, the effect of these changes may not be clear for a while.

SUMMARY

By an amendment effective August 1, 2009 to section 213(a) of its General Corporation Law, Delaware has provided a way for corporate boards to avoid a problem sometimes referred to as “empty voting.” The purpose of the change is to better align shareholders’ voting rights with their actual economic interests.

SUMMARY

Effective August 1, 2009, Delaware has amended section 145(f) of the Delaware General Corporation Law to address the problem created by the Delaware Chancery Court’s recent decision in Schoon v. Troy Corp., 948 A.2d 1157 (Del. Ch. 2008).

SUMMARY

The American Recovery and Reinvestment Act of 2009 has allocated approximately three quarters of a trillion dollars across a variety of industries and for a variety of purposes, some of which are well publicized and well known.  Included in this stimulus package is $4.7 billion for the Broadband Technology Opportunities Program (“BTOP”), which is to be managed and distributed by the National Telecommunications and Information Administration (“NTIA”) of the US Department of Commerce. These funds will be dispersed in three application tranches, with the first phase scheduled to be launched in May 2009. All monies must be disbursed no later than September 30, 2010, and projects must be capable of being implemented within two years after BTOP funding is awarded.

SUMMARY

President Obama signed H.R. 1, the American Recovery and Reinvestment Act of 2009 (Recovery Act) into law on February 17, 2009. The bill represents the largest investment in public works since the Great Depression.

The Recovery Act allocates more than $150 billion to health related programs, and makes significant down payments on medical research, comparative effectiveness initiatives, and health information technology. The chart below describes the major health provisions in the Recovery Act.

SUMMARY

On March 26, 2009 Treasury Secretary Timothy Geithner testified (.pdf) before the House Financial Services Committee (the “Committee”) outlining a “comprehensive framework for regulatory reform” of the U.S. financial system. Geithner's testimony focused on four key areas, including reducing systemic risk. 

SUMMARY

Included in this Issue:

• The End of Doom and Gloom by Dave Broadwin
  
• The Numbers by David Pierson
  
• Selected New England Series “A” Round Transactions: Fourth Quarter 2008
  
• Selected New England Series “B” and Later Round Transactions: Fourth Quarter 2008
  
• Terms of Selected New England Series A Rounds 2008
  
• Terms of Selected New England Series B and Later Rounds
  
• The Activity Level Summary
• New England Series A and First Round Transactions by Industry
• New England Series B and Later Round Transactions by Industry
• National Series A and First Round Transactions by Industry
• National Series B and Later Round Transactions by Industry
  
• Size of New England 2008 Series A and First Round Transactions by Industry
  
• Size of New England 2008 Series B and Later Round Transactions by Industry

SUMMARY

Beginning on March 16, 2009 all federal Form D filings must be made electronically using the SEC’s online filing system (“EDGAR”). In order to comply with this requirement, any issuer effecting a private placement of securities in reliance upon Regulation D will need to obtain EDGAR access codes. Current EDGAR filers can use their previously assigned EDGAR filing codes to complete Form D filings.