Business Formation, Governance & Commercial Contracts

Chicago-based partner Megan Mathias will co-present at the Hinshaw-sponsored event "Breaking the ICE: Capital Formation and RegTech" on March 3, 2025, in New York City.

Hinshaw partners Todd Young and Connie Mayer recently co-authored a chapter in the Illinois Institute for Continuing Legal Education (IICLE) 2023 handbook titled "Elements of Illinois Law." IICLE is the premier provider of continuing legal education in Illinois. Founded in 1961, the Institute publishes a comprehensive set of handbooks designed by and for Illinois attorneys.

The U.S. law firm of Hinshaw & Culbertson LLP is pleased to announce that Andrew May, a seasoned securities and commodities attorney, has joined the firm as a partner in the Chicago office. Formerly a principal at Chuhak & Tecson, May has two decades of futures and securities law experience and provides a powerful combination of industry-specific knowledge and personal investment in his clients' success.

Hinshaw is pleased to announce the publication of a new white paper—titled “Partnership and LLC Agreements Require Changes by 2018”—that reviews new partnership audit rules scheduled to go into effect in 2018, and looks at their impact on partnerships and multiple-member limited liability companies (LLCs) taxed as partnerships. Authored by estate planning and wealth management attorney Steve Frost—a Certified Public Accountant—the paper focuses on the prospect that these entities may be obliged to pay federal income tax audit assessments at the partnership level, which could have negative effects unless steps are taken to mitigate the impact of the new law.

Hinshaw & Culbertson LLP partner Adam L. Saper will present as part of a panel on the topic "LLC and S Corporations: Funding Options, Liability Limitations, Dispute Processes, and Leadership/Management Structures," at the Illinois Institute for Continuing Legal Education's (IICLE's) "LLCs vs. S Corporations" program from 1:15 – 3:00 on June 8, 2015. Specific issues to be addressed include:

College of Business at Illinois State University 470 S. University St. Normal, IL 61790

Anthony J. Jacob recently gave a lecture for the Illinois Institute for Continuing Legal Education (IICLE) on entity selection for the formation of a business, the tax ramifications of each, and certain compensation arrangements (e.g., stock options) that affect entity choice. "Starting Points: Fundamentals of Forming a Business Entity - Entity Selection 101," April 2014.

On February 21, 2013, the Illinois Supreme Court adopted three rules (99.1 (which relies on existing Rule 99), 113 and 114) which are “aimed at mitigating abuses and uncertainty in the mortgage foreclosures, and helping those who face loss of their homes by imposing several requirements on mediation programs and lenders seeking foreclosure.”The rules were scheduled to take effect on March 1, 2013. But on February 28, 2013, the Illinois Supreme Court delayed implementation of them until June 1, 2013. The purpose of the delay was to allow time to determine how the rules would be applied to existing cases or whether they should only apply to new cases.Most importantly, it does not appear that these rules will shorten the time it takes to foreclose on a property in Illinois. Currently, Illinois has one of the longest foreclosure processes in the country. At the end of January, there were more than 77,000 foreclosures pending in Cook County alone. According to Realty Trac, the average foreclosure in Illinois takes 697 days. Recently, the Federal Housing Finance Agency (FHFA) indicated that it was considering increasing the guarantee fees that Fannie Mae and Freddie Mac charge for mortgages in Illinois and four other states. These increased fees would offset the long foreclosure times and additional administrative costs incurred in Illinois and the other states. Furthermore, one can expect additional delays and costs to be incurred if these rules are applied to existing foreclosures. A copy of the rules and the related commentary from the special committee that drafted the rules are attached to this alert.Rule 113Under Rule 113, all copies of a complaint for foreclosure must include a copy of the note, as it currently exists, including all endorsements and allonges. The plaintiff must also file an affidavit in support of the amounts due and owing when it files any motion requesting a judgment of default. The affidavit must contain, at a minimum, the following:

On Thursday, January 18, 2013, the Consumer Financial Protection Bureau (CFPB) released its Final Rule (the Rule) incorporating Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) provisions into the Regulation Z rules, which regulate certain loan originator compensation practices. In addition, the rule requires: (1) employers of loan originators to ensure that the originators are licensed under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) and applicable state law, and (2) employers whose employees do not have to be so licensed (such as bank employees who originate mortgages) to ensure that such employees meet character and fitness standards and receive proper training. Furthermore, the Rule prohibits the inclusion of mandatory arbitration clauses in home loan or home equity loans.The Rule does not address the Dodd-Frank provisions that require the CFPB to adopt regulations prohibiting steering and various related types of conduct. The CFPB will address these regulations in the future. The Rule’s loan originator compensation and qualification provisions will take effect on January 10, 2014, while the prohibition against the use of mandatory arbitration clauses will become effective on June 1, 2013.Loan Originator Compensation

Timothy M. Sullivan and Michael D. Morehead authored a memo entitled “SEC Approves NYSE and Nasdaq Rules on Independence of Compensation Committee Members and Advisers.”Brief Overview To implement Section 10C of the Securities Exchange Act of 1934 (the Act), as added by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank), the SEC adopted Rule 10C-1 which became effective on June 21, 2012. The national securities exchanges have been directed to adopt listing standards which require that each member of the compensation committee must be a member of the board of directors and must be independent. In establishing these independence standards, the exchanges must consider relevant factors, including, but not limited to, the following factors:

On Thursday, January 10, 2013, the Consumer Financial Protection Bureau (CFPB) released its Final Rule setting forth new “ability-to-repay” determination requirements that will appy to traditional residential mortgages and any other consumer credit transaction secured by a dwelling. Under the rule, lenders are required to make a good faith determination that the borrower has the ability to repay the loan prior to making a mortgage or dwelling secured loan.

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