Should Donald Trump’s (or Anyone Else’s) Net Operating Losses Really Be Getting So Much Attention?

Daniel Willingham

By Daniel Willingham

Perhaps the most talked-about subject of the Tax Code right now is the allowance of net operating losses (NOLs). This is no doubt due in large part to the October 1 New York Times article that claims Donald Trump recognized roughly $915 million in losses on his 1995 tax returns, giving rise to his ability to use NOLs to offset taxable income in other years.

Like many stories we hear from the media, the truth about NOLs is much more complex than most pundits have suggested. It is interesting that in all the chatter surrounding NOLs, I have yet to hear a single commentator cite Tax Code Section 172, which does have the heading “Net Operating Loss Deduction.”

Section 172 defines NOLs as the excess of deductions over gross income. Because a deduction by definition reduces taxable income, when a taxpayer’s deductions are greater than his income in a given year, he needs to apply the deductions against income in other tax years. Otherwise, the taxpayer would completely lose a deduction to which he is entitled solely because he did not receive enough income. Continue reading »

Hurry Up! We Have a Plane to Catch! The Effects of Time Pressure on Negotiation and Mediation

Joseph R. Soraghan

By Joseph R. Soraghan

Not surprisingly, there is both anecdotal and empirical evidence that time constraints affect behavior generally.  It is also, therefore, not surprising that high time pressure (hereinafter “HTP”) probably affects both parties and mediators in mediation.

I recently ran across this question, and found particularly interesting (though not recent) articles by social science researchers which could assist both parties and mediators in their participation in mediation sessions.

In “Time Pressure in Negotiation and Mediation,” a 1993 article, Professors Peter Carnevale, Kathleen O’Connor and Christopher McCusker, then professors in the Department of Psychology, University of Illinois (“Carnevale, et al.”), reviewed the scientific research to that date on HTP in negotiation generally, and mediation in particular, to identify common themes, interesting questions, possible outcomes of differing HTPs and resulting behaviors.  It is only possible here to review possible conclusions of (not the methods of) the research and suggest actions to be taken accordingly by mediation participants to benefit their outcomes.  [This article was one of 18 chapters in a larger volume entitled “Time Pressure and Stress in Human Judgment and Decision Making” (Plenum Press 1993). The article, as did the other chapters, discussed the effect of HTP in negotiation generally; it then discussed the effects of such pressure on mediation in particular.]

The authors initially noted that the three strategies primarily used in mediation are: Continue reading »

HIPAA Non-Compliance Results in Largest Single-Entity Settlement to Date

Laura Gerdes Long

By Laura Gerdes Long

Co-authored by Laura Gerdes Long and Katherine M. Flett

On August 4, 2016, the U.S. Department of Health and Human Services (HHS), Office for Civil Rights (OCR) entered into a settlement agreement with Advocate Health Care Center (Advocate) in which Advocate agreed to pay $5.5 million to settle multiple violations of the Health Insurance Portability and Accountability Act (HIPAA).  This is the largest HIPAA settlement against a single entity to date, and according to OCR, is due to the severity of the violations and the length of time that those violations continued.

According to OCR’s press release, OCR began its investigation of Advocate in 2013, after Advocate submitted three breach notification reports relating to three separate instances of breach of unsecured electronic protected health information (ePHI).  The combined breaches resulted in unsecured access to over four million patients’ information. Continue reading »

Your Restaurant is Failing – Now What?

A. Thomas DeWoskin

By A. Thomas DeWoskin

Restaurants fail for a variety of reasons, from failure to watch costs to failure to develop the right menu to a nearby construction project eliminating most of your on-street parking.  If you followed the tips in my previous article, you should have some money to rely on going forward.

If your financial problems are operational or managerial, one of the things you can do at this late stage is to hire a consultant to help you tweak your menu, streamline your operations, or take any of a number of additional steps to bring you back to profitability.  This is the time to be humble, rather than arrogant – ask for help!  You should also consult with a bankruptcy lawyer at this point.  That does not mean you are necessarily going to file bankruptcy, but an attorney knowledgeable in this area can tell you what to expect if different scenarios unfold. Unanswered ‘end-game’ questions will add to your stress and divert you from your primary mission of saving your restaurant. You can learn a lot of useful information for not a lot of money, and gain some peace of mind as well.

A bankruptcy attorney also can help with your current problems. For instance, the attorney can negotiate with the landlord, either to reduce the rent or give back some space.  He can negotiate with your lender and your suppliers to negotiate better terms, or a temporary break in your monthly payments. Continue reading »

Opening a Restaurant: Plan for Success – and Failure, Too

A. Thomas DeWoskin

By A. Thomas DeWoskin

Failure is a topic most restaurateurs would prefer to avoid when setting up a new venture, when their heads are full with visions of success. However, the restaurant business is tough, and problems can arise due to circumstances both within and outside of your control.

A great time to protect yourself from potentially devastating problems is now, while you are setting up your business and you can plan calmly.

In this post, I will discuss several of the initial legal steps you can take to prepare for a potential failure.  In my next post, I will turn to the ramifications of failure and what actions you can take at that time.

First, consult an attorney to prepare your initial legal documents.  There are many issues of which you may be unaware, or that you may not know how to resolve. You need to choose an appropriate legal structure and learn about human resource issues. Especially if you have a partner, you will want to deal with buyout issues, succession issues and how to handle deadlocks if multiple owners are unable to reach decisions on major issues.  As they say, an ounce of prevention is worth a pound of cure. Continue reading »

Eighth Circuit Interprets Missouri Law: Non-Compete Agreements May Be Transferred to Subsequent Employer

Katherine M. Flett

By Katherine M. Flett

In Symphony Diagnostic No. 1, Inc. d/b/a/ MobilexUSA v. Greenbaum, the Eighth Circuit Court of Appeals recently addressed the question of whether a successor company in Missouri may enforce a predecessor company’s non-compete agreements in situations where the successor company purchases the predecessor company’s assets. Missouri law already provides that assignment is allowed in situations where there is an acquisition of stock.  Alexander & Alexander, Inc. v. Koelz, 722 S.W. 2d 311, 312 (Mo. Ct. App. 1986).

In MobilexUSA v. Greenbaum, Kimberly Greenbaum and Josephine Tabanag worked for Ozark Mobile Imaging as X-ray technicians.  Both employees signed non-compete agreements.  The non-compete agreement prohibited the employees from “directly or indirectly engaging in the mobile diagnostic business in any manner” for two years after their employment terminated and within a specified 100-mile radius geographical area.

In December 2012, Mobilex acquired Ozark Mobile Imaging through an Asset Purchase Agreement.  Mobilex offered Greenbaum and Tabanag employment, but they both refused.  In January 2013, they each accepted new positions as mobile X-ray technicians at Biotech X-ray, Mobilex’s competitor. Continue reading »

It’s Almost Time: DOL Overtime Exemption Rules Effective Dec. 1, 2016

Ruth Binger

By Ruth Binger

Changes are coming soon to overtime exemption rules. Issued in May 2016 by the United States Department of Labor (DOL), the updated final overtime rule (Final Rule) will be effective December 1, 2016.

Under the Fair Labor Standards Act, unless considered “Exempt,” an employee must be paid overtime pay of time and one half of regular hourly rate (150%) for all hours worked over 40 in a seven-day regular workweek. Currently, in order to be exempt, the employee must meet all parts of a three-part test:

  1. Salary level test (currently $455 per week or $23,660 per year),
  2. Salary Basis test (employees must be paid a pre-determined salary that is not subject to reductions based upon quality/quantity of work), and
  3. Duties Test for White Collar Employees. Employees engaged in bona fide executive, administrative, or professional capacities that meet a prescribed “duties test” (including any employee employed in the capacity of academic administrative, or teacher in elementary or secondary schools or in the capacity of an outside sales employee, computer systems analyst, computer programmer, software engineer and other similarly skilled computer engineer (“White Collar Exemptions”).

The Final Rule changes effective in December 2016 are only directed to the Salary Level Test; the remaining two parts remain the same. Those changes are as follows: Continue reading »

Update: Governor Vetoes Missouri Senate Bill Imposing New Requirements on Health Care Providers

Katherine M. Flett

By Katherine M. Flett

On July 5, 2016, Governor Jay Nixon vetoed Missouri Senate Bill 608. In his veto letter, Governor Nixon offered reasons that are unrelated to the “Health Care Cost and Transparency Act” provision of the Bill. Specifically, he opposed the provision of the Bill that would impose fees on MO HealthNet participants for missing appointments or failing to provide twenty-four hour cancellation notice. The Bill would also prohibit a MO HealthNet participant from scheduling another appointment until the fee is paid. Governor Nixon argued that this would needlessly punish our state’s most vulnerable citizens, calling the fees “cruel and punitive.”

He used the opportunity to criticize the legislature for refusing to expand Medicaid edibility over the past four years, costing Missouri billions of dollars in federal funding. He argued that Medicaid needs to be strengthened in Missouri, noting that currently, in order for an individual to qualify for Medicaid in Missouri, a single parent with two children can make no more than $3,600 per year. “Strengthening Medicaid would provide health coverage to an additional 300,000 working Missourians, create thousands of jobs in high-paying health care fields, and generate millions of dollars in revenues for other priorities.” Continue reading »

Short-term Rentals Via Internet Outlets: Three Tips for Homeowner & Condominium Association Boards

Jeffrey R. Schmitt

By Jeffrey R. Schmitt

Community associations continue to struggle with the emergence of the “sharing economy” issues raised by AirBnB, VRBO and other online outlets (see CNN Money article: Why everyone is cracking down on Airbnb).

When addressing these issues, condominium, townhome, and neighborhood association boards should consider the following steps as a proactive approach to maintaining their desired community environment:

  1. Be vigilant. The good news is that you are only a few mouse clicks away from finding out whether your owners are making short term or transient leases. Nearly all of these sharing economy services are online and searchable by location. Additionally, urge other residents to keep an eye out for new faces on a regular basis.
  1. Know the rules. Does your association prohibit short term leasing or lodging? Is permission required to rent? Do tenants have access to all common areas?  The answers to these questions should all be found in your governing document, the declaration or indenture and possibly in your rules and regulations as well. Know the rules of the game and consider whether they should be updated or amended to address emerging issues.

Continue reading »

Passage of Missouri Senate Bill 608 Imposes New Requirements on Health Care Providers

Katherine M. Flett

By Katherine M. Flett

On May 25, 2016, Missouri Senate Bill 608 was passed by the Missouri House and Senate.  The Bill adds new requirements to the provision known as the “Health Care Cost and Transparency Act.” Beginning July 1, 2017, the new law would require all licensed health care providers, facilities, and imaging centers to provide an estimate on the cost of a particular health care service or procedure within three business days of a written request from the patient, along with a medical treatment plan from the patient’s health care provider. The estimate must only include those services within the direct control of the health care provider and the amount that will be charged to a patient if all of the charges are paid in full by the patient, without a public or private third-party paying for any portion of the charge. Further, these provisions do not apply to charges for hospital emergency departments.

If health care providers provide publicly available links to the estimated costs or post such costs on a publicly available website, they are not required to provide cost estimates to patients upon written request.

Beginning also July 1, 2017, hospitals will be required to make publicly available the amount that would be charged, without discounts, for each of the 100 most prevalent diagnosis-related groups, as defined by Medicare. Continue reading »