Wednesday, September 9, 2015

Amendments to the Michigan Nonprofit Corporations Act

By Grace K. Trueman

In January 2015, Governor Snyder signed Michigan Senate Bills 623, 624, and 929, which make significant revisions to the Michigan Nonprofit Corporation Act (MCL 450.2101-450.3192) (the “Act”). The purpose of these companion bills is to clarify and modernize the law governing nonprofit corporations that conduct activities in Michigan; indeed, the revisions constitute a major overhaul of the Act and provide increased flexibility for creating and governing nonprofit corporations. Among the numerous changes, the following major revisions may need to be addressed or incorporated into governing procedures or organizing documents:

1. Indemnification and Liability

The Amended Act revised and expanded upon provisions concerning the indemnification of a director, officer, employee, non-director volunteer, or agent, who is or is threatened to be made a party to a civil, administrative, or criminal suit or proceeding. In addition, a nonprofit may now amend its articles of incorporation to contain a provision limiting or even eliminating a director’s liability to the nonprofit corporation, its members, or its shareholders (except for intentional wrongdoing, such as an intentional criminal act or intentional infliction of harm to the corporation or shareholders).

Of particular importance, Section 209 provides that if an entity’s articles of incorporation contain a provision eliminating volunteer director or officer liability (filed before the effective date of the 2015 amendments), the existing provision automatically works to eliminate the liability of a director or volunteer officer under Section 209(1)(c).

2. Mergers

MCL 450.4705a of the Amended Act now allows one or more domestic nonprofit corporations and limited liability companies to merge. A surviving or new corporation may use the same corporate name as the merged or consolidated corporation. See MCL 450.2722. A nonprofit corporation organized for charitable purposes, however, is restricted from merging (as well as dissolving or converting) without the Attorney General’s consent. The Department of Licensing and Regulatory Affairs will not file a certificate of merger for a nonprofit organized for charitable purposes without a copy of the written consent from the Attorney General’s office, or an affidavit that the nonprofit corporation served the notice on the Attorney General and the Attorney General’s office failed to respond within 45 days after filing with the Department of Licensing and Regulatory Affairs.

3. Electronic Voting and Notifications

In an effort to keep pace with electronic forms of communication, the Amended Act allows for electronic voting on, and notice of, various corporate matters. Now, participation in meetings via electronic methods of communication is permitted by default, unless there is a provision in the nonprofit’s organizing documents that prohibit such voting methods. This opens the door for electronic voting or notifications through email, online surveys or other polling venues; but this also means that nonprofit corporations will need to address and prevent issues concerning identification of members or shareholders voting through electronic mediums.

4. Learned Profession

Nonprofit corporations operating in Michigan may provide “services in a learned profession” which includes services provided by a dentist, a physician, a doctor of divinity or other clergy, or an attorney. These revisions incorporate the Attorney General’s opinion that nonprofit hospitals and other nonprofits may provide medical services through employed physicians. In other words, the changes clarify from a statutory perspective the industry understanding that nonprofits may employ and enter into other arrangements with licensed or authorized professionals to provide services on behalf of the nonprofit corporation.

The Act also provides nonprofits with the option to limit access to information for shareholders and members. A nonprofit’s articles of incorporation or bylaws can specify that there is no right to inspect in certain instances, such as opening lists of donors would not be in the best interests of the corporation. Other revisions, such as permissibility of certain mergers and acquisitions, and restrictions on dissolving may be applicable to your nonprofit. Nonprofit corporations should consider reviewing and/or amending their respective governing procedures or organization documents to take these significant revisions to the Michigan Nonprofit Corporation Act into account.

Wednesday, August 5, 2015

Getting to Know Las Vegas Attorney Jennifer Gaynor

Jennifer Gaynor is a member in Dickinson Wright’s Las Vegas office who joined the firm in January of this year. Jennifer practices government relations, gaming and regulatory law. In a nutshell, this means she acts as a conduit between clients and government regulators, at each level of government - from city councils, county commissions and local licensing and planning boards, to state-level departments and boards. Jennifer also represents clients before the Nevada state legislature when it meets every other year in the odd-numbered years for 120 days.

The 2015 Nevada Legislative session just ended at the beginning of June, and some of the laws Jennifer worked on for clients included those regulating UBER and other rideshare companies in Nevada, those dealing with HOA superpriority liens, those affecting Nevada’s business licensing and tax structure, and several dealing with Nevada’s gaming laws.

Jennifer and the other gaming attorneys in the Las Vegas office, Jeff Silver, Kate Lowenhar-Fisher and Greg Gemignani, are all now involved in assisting clients as the Nevada gaming regulatory bodies draft new regulations as directed by the new laws passed this session. Of particular interest to gaming and entertainment clients are new regulations that will:

  • adjust how Nevada’s Live Entertainment Tax (“LET”) on live event admissions is calculated;
  • create a new multi-tier licensing scheme for associated equipment manufacturers, including a requirement for some to obtain full gaming licensure for the first time;
  • bring nightclub employees under the regulatory reach of the Nevada Gaming Control Board;
  • allow “entity wagering” (the formation of business entities to place race and sports wagers) and centralized race book and sports pool operations; and
  • create a new class of “hybrid” games, which combine elements of skill and chance, as well as integration of the games with social media accounts and electronic commerce transactions.

When Jennifer is not at work, she enjoys spending time with her husband Paul (who is from Sydney, Australia) and her almost two-year-old son, Parker. She also volunteers as the State Chair for the international humanitarian organization, CARE; sits on the board of the Nevada Preservation Foundation; and is an active member of the Nevada State Bar CLE Committee and the Howard D. McKibben Inn of Court.

Wednesday, June 24, 2015

EPA Rolls Out New eDisclosure System for Audit Policy Disclosures

By Sharon R. Newlon & Kelly M. Martorano

On June 10 and 15, 2015, the U.S. Environmental Protection Agency (EPA) rolled out a new system for e-reporting violations being disclosed pursuant to EPA’s audit policy, eDisclosure, which is expected to go online as soon as Fall 2015. The new system was designed to streamline the implementation of the audit policy, resolve routine disclosures quickly, and save the time and resources of EPA and the regulated community.

The new system divides reported violations into Tier I and Tier II. Tier I violations are limited to most Emergency Planning and Community Right-to-Know Act (EPCRA) violations if they meet the nine existing EPA audit policy conditions. Tier II violations include all other violations, as well as EPCRA violations involving release reporting or those violations not identified in the course of an audit. Under the new system disclosures must be e-filed within 21 days of discovery of the violation and a compliance report must be e-filed within 60 days of discovery.[i] Upon the filing of the compliance report, Tier I violations will trigger an immediate electronic notice of determination, confirming that the violations are resolved, subject to the accuracy of the disclosure. Tier II violations will trigger an acknowledgement letter noting that EPA will determine the applicability of the audit policy to the disclosed violations if and when it considers potential enforcement. The new system does not apply to new owners of existing businesses that qualify for special audit policy treatment, though they can use the new system if they choose to do so.

Disclosures may be withdrawn from the system before the deadline for e-filing the compliance report. If the disclosure is not withdrawn, and the compliance report is not timely filed, the system will record the reported violation and send the discloser a notice of non-qualification. A filer can request a 30-day extension to file the compliance report, and it will be granted automatically.[ii] If more time is needed, the request must include a justification. While the system will reflect the additional time, the extension is not considered automatically granted, and EPA can later determine that the violation was not promptly corrected. EPA will screen Tier II submittals for significant concerns such as potential criminal conduct or imminent hazards. As with current policy, EPA will release information regarding resolved disclosures in response to FOIA requests, but may withhold information regarding unresolved disclosures on a case-by-case basis under the enforcement exception. EPA has also established a procedure for addressing unresolved disclosures that are pending when the new system comes on line.

If you have any questions regarding the new eDisclosure system, the benefits of conducting an environmental compliance audit, or the procedures for securing penalty reductions, immunity and/or privilege protection under the EPA and state environmental audit programs, please contact Sharon Newlon, 313.223.3674 or or Kelly Martorano, 248.433.7274 or

[i] Under the Small Businesses Compliance Policy, small businesses have up to 90 days to file a compliance report.
[ii] For small businesses, an automatic 90-day extension can be obtained.

Wednesday, May 27, 2015

Notes from MBA Legal Issues & Regulatory Compliance Conference

By K.J. Miller and Amy Sabbota Gottlieb

K.J. Miller and Amy Sabbota Gottlieb both have extensive experience in commercial and business litigation. Today, their practices center on consumer finance litigation, including federal lending laws and regulations like TILA, RESPA, FDCPA and FCRA, and state consumer protection laws. They represent a number of lenders, ranging from national banks to local credit unions, investors, and servicers in actions pending in MI, IL, TN, NV, OH, MN, IN and KY. Both Amy and K.J. handle large caseloads, supervising a number of attorneys in various DW offices, and consistently meet the needs of their clients in an ever-changing and demanding financial industry.

K.J. and Amy recently attended the Mortgage Bankers Association’s Legal Issues and Regulatory Compliance Conference. The housing market has improved and purchases are up, while foreclosures are down. However, mortgage lenders and servicers are under increased scrutiny and have more regulations than ever by which they must comply. A central topic of discussion was the Consumer Finance Protection Bureau’s (CFPB’s) interpretative authority over consumer regulations and the impact on everyone from large financial institutions to used car dealers. One of the many challenges associated with the new regulations is trying to help clients predict how the CFPB will enforce its rules. Unlike other regulatory agencies, the CFPB is not issuing Official Agency Interpretations; instead, the CFPB is using enforcement actions and consent orders to provide guidance to the industry. But consent orders only legally bind the parties to the order, and are often factually specific (and not all the facts are disclosed!), making it hard to generalize their impact on other entities. Plus, consent orders have no legal precedential value on any company that was not a party to the order.

But clients need to be aware of how the CFPB is treating other entities, because making the same or similar mistakes as those entities can have costly consequences. Counsel should try to determine which parts of a consent order may have general applicability, and try to gather more detail on the evidence the CFPB gathered on the alleged violations before the Consent Order was created. With the assistance of their clients and other knowledgeable and trusted experts, counsel can help clients minimize risks and better defend against claims.

Thursday, May 7, 2015

A Night of Sharing Success with Dickinson Wright’s Women’s Network

Each year the Dickinson Wright Women’s Network gathers for one night in the metro Detroit area to celebrate the achievements of the past year with our clients and to raise awareness of a local non-profit organization. This year was no exception!

Last month, over a 100 women gathered at the Detroit Public Library for the Women’s Network Annual “Sharing Our Success” Event. This year’s theme was literacy and participants were all encouraged to bring book donations for Beyond Basics.

Beyond Basics is a 501(c)3 non-profit student-centered, literacy non-profit, serving students in Detroit public schools since 2002. The organization partners with principals and schools to increase students’ literacy by providing reading, tutoring, and supplemental programs, such as writing, art, and mentoring throughout the school day for students in grades Pre-K through 12. In addition to providing these services, Beyond Basics provides free books to every student and parent that enters their classroom.

In keeping with the literacy theme for the evening, guests were treated to a presentation by Beyond Basics President Pamela Good and a lecture from local young adult author Bethany Neal. With such an appropriate setting as the Detroit Public Library, the night was filled with networking, great food and conversation as well as honoring those organizations that make an impact on our community!

To learn more about Beyond Basics and how they are helping to create a better future, please click here.

To learn more about the Dickinson Wright Women’s Network, please click here.

Wednesday, April 22, 2015

Are You Really Prepared to Consider Divorce?

By Marlene Pontrelli

For some reason, divorces nationwide tend to peak in the springtime. Perhaps it is because of the reluctance of wanting to pursue a dissolution of marriage during the holidays, or perhaps it is the realization that a spouse simply does not want to go through another summer of family vacations, family reunions and pretending that everything in the marriage is picture perfect. However, for anyone considering a divorce or legal separation, there are some important steps to consider in advance.

  1. Take an inventory. If you have valuable jewelry, art work, furniture, and furnishings, take pictures and make a detailed inventory of what exists. Even if you have no concern over whether the items will disappear during the divorce, it is good to have pictures and an itemized list of the more expensive items.

  1. Gather documents. Understanding your financial situation is important. Gather copies of prior tax returns, pay stubs, credit card statements, bank statements, investment accounts, employee benefits, life insurance, and trust documents. In addition, if there are deeds of trust, mortgage statements, promissory notes or any other documents indicating property owned and liabilities, be sure to obtain those as well. Put copies in a safe deposit box or at the home of a trusted friend.

  1. Consider whether you need a protective order. If you are in an abusive relationship, it is important to make sure you and any children are safe. Consider obtaining an order of protection that includes having your spouse stay away from your residence, away from your place of employment, or other places you may frequent.

  1. Determine if other alternatives exist. Determining the reason you are considering a divorce is important. Can you achieve the same results with a legal separation, post-nuptial agreement, or creating a trust? Are there sufficient difficulties in the marriage that may be helped with marriage counseling? Consulting with an attorney that understands the options available may help you determine whether there is an ability to repair the marriage.

  1. Choose an attorney who understands your goals and priorities. The relationship with your lawyer should be a partnership in pursuing what is most important to you. The counsel of your attorney may affect your life for years to come. This may require interviewing more than one attorney to determine the right choice for you and your family. You will never regret taking the time to find the right lawyer.

Wednesday, April 8, 2015

A Moment with Columbus Attorney Laura Hult

Laura joined Dickinson Wright’s Columbus office last year. “I knew a place like Dickinson Wright with a lot of Wolverines and Canadians was the place for me,” says Laura. “It was kismet.”

Laura handles matters for clients at all levels of the capital structure. She regularly represents senior lenders, mezzanine lenders, institutional investors and subordinated debt funds in all aspects of complex financial transactions, including alternative investments, financings of management buyouts, tender offers and other leveraged acquisitions; bridge financings; financings for growth capital; recapitalizations; workouts; and portfolio purchases and sales.

“The best thing about my job is my relationships with my clients,” says Laura. “They are incredibly smart and kind and they are wonderful advocates and sponsors. I like developing that client relationship over time and it feels very two-way, where you have an incredible amount of trust and respect for one another.  We root for each other – it is incredibly rewarding to see careers and companies achieve their goals and knowing you were a part of the team. ”

One of her favorite transactions so far at Dickinson Wright has to do with a success story using Dickinson Wright’s cross-border platform. When one of Laura’s clients made a debt and equity investment in a US company acquiring a Canadian company, Laura contacted Dickinson Wright’s US/Canada resource Dan Ujczo.  He immediately put her in touch with the firm’s Toronto “crash team” and they gave smart and practical guidance on structuring and diligence issues. “It was an immediate value-add for not only my clients but also the other lenders and investors in the deal,” says Laura.

In terms of what is on the horizon for banks and other lenders, Laura says that banks are facing a lot of competition and having a hard time getting highly leveraged deals approved. In Laura’s opinion, it is a great time to borrow money and/or the best time to sell your business if you are interested. She also encourages companies to bank with partners that can support them in their growth since pricing among the regional and larger banks remains so competitive. 

When Laura is not working, she enjoys spending time with her family and friends and practicing yoga. She is the current chair of the newly launched emerging leaders platform for the Association for Corporate Growth in central Ohio.  She is involved and spends a lot of her time working with organizations to develop and advance women leaders.  She is also a mentor to Stephanie Green, an associate attorney in the firm’s Columbus office.

To read more about Laura’s practice, please click here.