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On July 14, 2014, the Michigan Supreme Court ruled in IBM v. Department of Treasury, Docket No. 146440, that the taxpayer, IBM, was entitled to a refund of income taxes paid to the state by virtue of its election to apportion its income using the three factor apportionment formula provided in the Multistate Tax Compact, MCL 205.581 et seq. The opinion has garnered a lot of attention, as it is the first state supreme court decision addressing whether taxpayers should…

Understanding Enhanced Asset Protection Structure in Bermuda It is important to know and understand the laws for asset holding when trying to recover claims. New legislation in Bermuda seeks to stimulate the trust industry and to attract international customers who wish to retain a certain level of control over their trusts. The Trusts (Special Provisions) Amendment Act 2014 enhanced the reserved power trusts where a settlor may retain fairly extensive powers over the trust. The new law adds specific provisions…

In a recent decision, Relfo v. Vasani (2014) EWCA Civ 360, the Court of Appeal was confronted with the Liquidator being unable to show evidence of each transaction transferring monies through various bank accounts and ultimately being received by the recipient. There, the Liquidator of Relfo sought funds belonging to Relfo, which were misappropriated and paid to accompany called Mirren. A director of Relfo had close ties to the Vasani family and at a time that Relfo owed substantial monies…

According to a list published by Forbes magazine in 2013, Maryland was among the worst states for retirement for several reasons. One such reason is its estate tax and, according to Maryland's comptroller, is at least partially to blame for an outflow of its retirees to other states. So, trying to change its image and curb the outflow, Maryland recently increased its estate tax exemption (effective 1-1-2015) so that it gradually increases over a 5-year period at which point it should…

What do Papa John's Pizza, delivery charges and whistleblower lawsuits have in common?  When it comes to state sales tax, a lot it turns out. Zachary Tucker is an Illinois resident who ordered a Papa John's pizza for delivery one day.  Whether Mr. Tucker enjoyed the pizza is not known.  What is known is that Mr. Tucker did not appreciate the fact that Papa John's charged him 16 cents in sales tax on the $2.39 delivery fee.  Mr. Tucker, on…

Section 550 of the US Bankruptcy Code allows for the bankruptcy trustee to recover for the benefit of the estate property transferred to an immediate transferee that can be avoided under other Code provisions. In a recent matter in the Madoff bankruptcy proceeding, Sec. Investor Prot. Corp v. Bernard L. Madoff Inv. Secs. LLC, 2014 U.S. Dist. Lexis 91508 (S.D. N.Y. July 6, 2014), the bankruptcy trustee sought to recover funds that had been transferred from Madoff Securities to certain…

There are numerous international banks with offices in New York or that do business in New York. Recently in Mashreqbank PSC v. Ahmed Hamad A1 Gosaibi & Bros., 2014 N.Y. Lexis 705 (N.Y. April 8, 2014), the Court of Appeals clarified the reach of jurisdiction in New York when a foreign national moves money through a bank in New York as a part of a fraudulent transaction. There, the Court of Appeals dismissed an action arising from an international swap…

When a case is brought in the Cayman Islands involving a disputed question of fact, a litigant is entitled to discovery of documents relevant to the issues raised in the dispute. Relevant means if the documents assist one party, however slightly, to advance his case. The definition of documents is broad to include, paper, computerized including metadata, audio or video, and contents of portable devices. The rules contemplate discovery to be given two weeks after the pleadings close and the…

When a fraud has occurred, a private investigator is often engaged by counsel to gather evidence about the fraud and the fraudsters. If events take you to Canada, one must understand the law surrounding privilege and privacy and be cautious to avoid prejudicing the case. An investigator must be retained "for the dominant purpose of litigation" for his work to be protected from disclosure by litigation privilege. Blair v. Wawanesa Mutual Insurance Co., 1998 ABQB 1025. To maintain the privilege,…

In the past, courts had decided that RICO's reach depended upon the location of the enterprise. European Community v. RJR Nabisco, Inc., 2014 U.S. App. LEXIS 7593 (2d Cir. April 23, 2014) redirected the focus to predicate acts. There, plaintiffs alleged that RJR Nabisco and related entities ("RJR") managed and controlled a global money-laundering scheme involving organized criminal factions in Russia and Colombia. Plaintiffs alleged that RJR employees travelled from the U.S. to Europe, Central America and other locations to…

The Department of Justice and Carl A. Zwerner ("Taxpayer") have agreed to settle the case of United States v. Zwerner (S.D. Fla., No. 1:13-cv-22082). The settlement calls for the Taxpayer to pay penalties and interest totaling about $1.8M in connection with the Taxpayer's failure to file the FBAR in multiple years.  Despite the jury finding the Taxpayer guilty of willful noncompliance of the FBAR filing requirements, the Government agreed to settle the matter for an amount that is significantly less…

For private foundations interested in a "return on investment" on the distribution of their foundation's charitable dollars (that is, a return beyond the satisfaction of doing good), Program Related Investments ("PRI's") are generally the tool of choice.  A PRI can be counted as part of the foundation's required 5% annual distribution provided that the investment accomplishes one or more the foundation's charitable purposes, is not made to achieve a significant investment return, and is not used for lobbying or political…

A recent decision in the Southern District of New York, Wultz v. Bank of China, 2014 U.S. Dist. Lexis 1841 (S.D.N.Y. February 13, 2014), required a non-party bank to prepare a Rule 30(b)(6) witness with information that was only available overseas. There, the Bank of China subpoenaed Bank Hapoalim, a non-party Israeli bank, requesting documents pertaining to transactions and wire transfers involving an alleged Islamic Jihad leader. Bank Hapoalim moved to quash, arguing that Rule 45 did not require it…

For many Gen Y'ers (a/k/a Millennials, and generally understood to be people in their 20's and 30's today), philanthropy goes far beyond writing a check to one's favorite public charity (or, even, texting a donation to the Red Cross following some natural disaster or another). Instead, philanthropy is now understood as a broader deployment of social capital with consideration of the Return on Investment (ROI) to be achieved through that deployment. Outright donations, in which the donor's ROI is a good…

On April 3, 2014, in Matter of Kapon v. Koch, 2014 N.Y. Slip Op 02327, the New York Court of Appeals clarified the standard for enforcing subpoenas to nonparties in civil litigation. There, William Koch commenced a fraud action in California and served nonparty subpoenas for deposition on two New Yorkers who moved to quash the subpoenas. The Court held that "so long as the disclosure sought is relevant to the prosecution or defense of an action, it must be…

Provisional remedies are a powerful tool for creditors. In New York, two recent cases have limited a creditor's ability to attach funds of a defendant at a foreign bank with a correspondent banking relationship with a New York bank. The premise of the attachment is that a foreign defendant has an attachable property interest in its "share" of its bank funds maintained with its correspondent bank in New York. In Toisa Ltd v. PT Transamudra Usaha Sejahtera, 13 CV 1407…

In Italy, Article 671 of the Italian Civil Code permits a precautionary seizure of property if a creditor has a "valid fear of losing the security for his claim." The order will prohibit the debtor from disposing of all of his assets and not just specifically identified ones. A freezing order can be granted if: 1) the Court is persuaded that the claim has a prima facie basis based on the documentary evidence presented, and 2) the Court is persuaded…

The U.S. Court of Appeal for the Eleventh Circuit recently emboldened a litigant's ability to obtain discovery under 28 U.S.C. Section 1782 for a foreign proceeding that was only "within reasonable contemplation." In Consorio Ecuatoriano de Telecomunicaciones S.A. v. JAS Forwarding (USA), Inc., 2014 U.S. App. Lexis 531 (11th Cir. January 10, 2014), Concel filed an ex-parte application for judicial assistance in order to obtain evidence pursuant to Section 1782. Concel's detailed application sought evidence from JAS USA relating to…

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