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Services Available
Individual Counsel
For our individual clients (who include corporate executives, owners of family businesses, founders of start-up and emerging companies, prominent figures in the entertainment industry and other persons with significant wealth management concerns) we offer:
§ Advice on company compensation and benefit plans;
§ Strategies for personal tax planning;
§ Guidance on creation of trusts and conservatorships;
§ Counsel on estate planning matters; and
§ Representation in tax controversies.
Employee Benefits
Manatt’s substantial employee benefits practice primarily involves the implementation and operation of employee benefit plans on behalf of for-profit corporate employers, nonprofit organizations, governmental employers and Taft-Hartley trusts, including employee benefit administrative controversies and ERISA litigation.
Qualified retirement plans
We prepare and help clients to implement retirement plans that are qualified to receive preferential tax treatment under the Internal Revenue Code. These include:
§ Defined benefit pension plans;
§ Profit-sharing, stock bonus and other defined contribution plans;
§ 401(k) plans;
§ 403(b) plans;
§ ESOPs;
§ Counsel regarding prototype and volume submitter plans; and
§ IRA arrangements sponsored by financial institutions.
We offer legal counsel regarding plan design issues, prepare benefit plan and trust documents and review standardized plans. Our attorneys advise regarding administrative procedures governing enrollment of participants, investment elections, payment of benefits, processing of domestic relations orders and legal restrictions on plan investments.
Multiemployer and collectively bargained plans
Our ERISA lawyers have significant experience with multiemployer and other collectively bargained pension and welfare arrangements. We often represent large multiemployer plans themselves with respect to all matters, including ERISA compliance, litigation, legal aspects of pension investment, and benefit design.
Legal aspects of pension plan investment
We advise pension plans as investors in institutional real estate and in institutional investment partnerships designed to implement leveraged buyouts, private equity and venture capital investments, and real estate finance and development projects.
Employee stock ownership plans (ESOPs)
We counsel clients on how to make these specialized retirement plans serve corporate finance needs by allowing employees to acquire employer stock with pretax dollars on a leveraged or nonleveraged basis. In all such ESOP transactions we are prepared and qualified to represent any of the key players, including the ESOP sponsor, the ESOP administrative committee, the ESOP trustee and the ESOP financial advisor.
Special needs of non-profit organizations
Manatt’s experience with the special employee benefit needs of tax-exempt organizations includes assistance in all aspects of their broad-based plans, as well as executive compensation, including 403(b) plans and both eligible and ineligible deferred compensation plans under Code Section 457.
Nonqualified deferred compensation plans
We also help clients implement and operate deferred compensation plans that are not tax-qualified, but which meet the comprehensive recent requirements imposed upon deferred compensation by Section 409A of the Internal Revenue Code. These plans are generally of two types:
§ Excess Benefit Plans that provide unfunded retirement benefits for highly compensated employees who are constrained by the maximum dollar contribution limitations that may be imposed under tax-qualified plans; and
§ Top Hat Plans, which may provide unfunded, deferred compensation retirement benefits to a select group of management and highly compensated employees.
We create such plans as limited benefit programs or as part of executive contractual arrangements, and coordinate them with the client’s tax-qualified retirement plans. Because nonqualified plans are generally unfunded in order to avoid adverse income tax consequences, we often work with companies and executives to implement various arrangements to secure, to the extent permissible, payment of benefits under such plans (such as “Rabbi trusts”).
Welfare benefit plans
In addition to retirement benefit plans, Manatt attorneys help many companies implement and operate many other kinds of employee benefit programs, such as:
§ Insured and noninsured healthcare and medical expense plans;
§ Life and disability insurance plans;
§ Dependent care assistance plans;
§ Severance pay plans;
§ Educational assistance plans; and
§ Fringe benefit programs.
To help our clients make the most of these plans, we develop tailored strategies to contain costs, manage liabilities, and comply with rapidly changing laws and regulations. For example, we help many companies establish programs that fund plan benefits by using “flexible benefits” or “cafeteria” arrangements, with the employees (and retirees, if they are included) effectively paying for the benefits they choose to receive on a pretax basis.
When companies are in the process of downsizing, we help manage the provisions of benefit plans to meet any legal requirements that cover employees terminated through a reduction in force. We have also worked with a number of companies that are restructuring their workforces to help them implement severance incentive programs.
Stock option plans
We help many start-up and emerging companies, including those involved in advanced-technology activities, establish incentive and nonstatutory stock option plans for their employees. We also show these companies how to create other incentive compensation arrangements, both stock-based (such as employee stock purchase plans, stock grant plans and stock appreciation rights plans) and nonstock-based incentive compensation arrangements.
Parachute arrangements
Our benefits attorneys work with many companies to establish programs that provide compensation to key employees if there is a change in control of the company. Such programs are typically designed to give these key employees greater employment security, allowing them to focus on maximizing company and shareholder value without having to worry about their status as the result of a tender offer or hostile takeover. If there is a takeover, we advise the companies and individuals affected by these arrangements how to best implement the provisions.
Transactional involvement
Manatt’s employee benefits and corporate attorneys work in close cooperation to analyze and resolve employee benefits issues that arise when a client undertakes a merger or acquisition. When drafting the agreements and carrying out the related due diligence for such transactions, we assess and allocate among the parties the employee benefit program liabilities that may accompany the ongoing businesses that are purchased or sold.
Often these issues are quite complex. For example, we represented an acquired company with respect to all employee benefits matters arising on its sale in a $5.3 billion transaction. This included issues involving funded and unfunded pensions, active and retiree healthcare plans, severance pay, parachute payments, stock option and stock appreciation rights, all on an international scale.
We also advise selling and acquiring companies about the impact that unfunded pension, healthcare and other benefit plan liabilities have on the value of the company to be acquired and on the restrictive covenants in the acquisition financing. Where continuity of benefits is the objective, we will take whatever steps are necessary. For instance, we advised the acquiring company in a deal where pension benefits for employees of the acquired company were funded by annuity contracts with Executive Life Insurance Company. We represented our client in discussions with and actions against the selling company, Executive Life and its successor, to determine how to best protect these pension benefits for the company’s employees.
We regularly advise companies with respect to multiemployer plan withdrawal liability in the acquisition or disposition (or closing) of unionized facilities, and engage actuaries with whom we are familiar to perform the specialized calculations necessary to analyze this issue.
Investment sponsors and “plan asset” issues
We help the sponsors of venture capital and private equity funds, real estate partnerships, REITs and other pooled investment vehicles to structure their investments in ways that appeal to benefit plan investors while minimizing concerns over fiduciary liability, prohibited transaction and unrelated business taxable income.
Tax
Joint ventures and venture capital
Our tax attorneys structure all types of joint ventures, including those between real estate developers and financial partners, and between industrial co-venturers. We have particular strength in structuring, documenting, and offering a large number of venture capital partnerships in such centers of emerging technology companies as Silicon Valley, Southern California and Northern Virginia.
Real estate
We advise both developers and investors on like-kind real estate exchanges, partnership formations, dissolutions, distributions and transfers of interests. We also plan the use of low-income housing credits and determine the tax effects of loan workouts and installment sales. With Manatt’s extensive international practice, our attorneys also help clients plan for and comply with the Foreign Investment in Real Property Tax Act.
Our tax attorneys have particular experience with real estate investment trusts (REITs and UPREITs) and other real estate entities and joint ventures. Our attorneys handle all of the complexities of these transactions, including capital structures, distribution priorities, profit and loss allocations and other tax considerations, management rights and duties, transferability and dispute resolution. We are particularly adept as tax counsel involving REIT operations, including the purchase and sale of assets, mergers and acquisitions, public and private offerings of debt and equity securities, and various partnership structures. All of our experience is part of Manatt’s general capabilities to resolve federal and state income tax, property tax and documentary transfer tax issues related to the acquisition, development, holding and disposition of real property.
Tax controversy
Manatt’s tax and litigation attorneys work in partnership to resolve tax controversies and develop strategies for such matters as the tax effects of structured settlements. We represent clients before the Internal Revenue Service and state tax agencies such as the California Franchise Tax Board, State Board of Equalization and other state and local tax agencies in disputes involving audits and appeals. If necessary, we litigate in the Tax Court and other courts.
Legislation and administrative matters
With Manatt’s strength in public policy advocacy, we are able to work with agencies and legislative bodies to affect tax legislation.
Among the many specialized administrative tax issues we handle are certification of tax-exempt status for nonprofit organizations and securing favorable rulings, determinations or opinions from the IRS and Department of Labor.
Individual taxation
Our attorneys help wealthy clients structure their personal business activities to minimize the tax consequences of investments and family business assets. We also regularly advise on executive compensation matters, including deferred compensation agreements, stock purchase and stock option agreements, golden parachute payments and loans.
Foreign tax
Manatt helps companies and individuals from the U.S. and other countries to minimize global tax costs through innovative structuring of their international transactions and operations. We can assist with virtually any tax-related need that involves:
§ International mergers, acquisitions and joint ventures;
§ Project finance;
§ Everyday business activities involving leasing, licensing, manufacturing, distribution and marketing operations;
§ Use of tax treaties, conduit entities, hybrid entities and domestication of foreign corporations to optimize tax deferral where desired;
§ Foreign tax credits on repatriation of profits;
§ Cost sharing agreements and transfer pricing issues relating to development of technology, subpart F and foreign tax credit planning opportunities, and central cost sharing agreements for nontechnical functions to reduce overall international tax burdens; and
§ Operations and transactions by U.S. companies in Mexico and other Latin American countries.
Foundations and tax exempt organizations
Manatt represents a wide range of public charities, private foundations and charitable trusts. We make sure that their organizational form and structure meet all Tax Code requirements for tax-exempt status. Our attorneys handle status applications to the Internal Revenue Service, secure letters of determination, and respond to audits and inquiries involving Section 501(c)(3) charitable or educational organizations, 501(c)(4) social welfare organizations, 501(c)(6) trade associations and similar entities. Because Manatt has extensive experience and good working relationships with IRS personnel, we are effective advocates for securing and maintaining our clients’ tax-free designation. We also form charitable lead trusts and charitable remainder trusts to handle the deductibility of gifts to various charitable organizations, finalizing all of the details of tax status qualification and advising on the appropriate deductibility of contributions.
Foundations and trusts are organizations with their own unique operational challenges, and our nonprofit team guides them through the complexities of:
§ Governance issues such as avoiding self-dealing;
§ Management of for-profit subsidiaries in compliance with tax requirements;
§ Documentation of board proceedings and distribution decisions;
§ Preparing and filing state and federal tax and information returns;
§ Leases, loans, contracts and other business agreements; and
§ Legislative advocacy and political matters.
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