2023 Advanced Business Law

Generative AI has suddenly become a must-have technology for almost every company. One reason is that generative AI (GenAI) has impressive capabilities useful for various applications such as natural language chatbots, text-to-image generators and text-to-video generators capable of producing incredibly realistic outputs based on text inputs. GenAI can also create human-like recommendations, robust content, and valuable new features for digitalproducts that can improve user experiences. As generative AI enters the mainstream, each new day brings a new lawsuit. Not only is GenAI being used to create new content, but other types of AI are also used to make decisions that, in years past, were the purvey only of humans. But what happens when AI discriminates, injures, or monopolizes, it then becomes the subject of discovery and litigation.

This is a link to the video presentation on Artificial Intelligence.

Now that ABA Resolution 100 has been adopted and ABA Model Rule 1.16 has been amended, it is important for practicing lawyers to become aware of how the amendment impacts their ethical obligations to conduct client due diligence. This article, along with the ethics CLE presentation for which it is written, is an early effort to begin that dialogue and to develop an understanding of the impact. The article will consider prior discussions about conducting client due diligence, a brief description of the change to Rule 1.16 itself and the Comments thereto, and some practical issues as to what level of client due diligence may now be required and when a lawyer should conduct such due diligence.

Today, the financial services industry (banks, investment advisers, broker-dealers, etc.) are subject to a variety of anti-money laundering regulations and reporting requirements. These requirements include having anti-money laundering policies, filing suspicious activity reports with governmental authorities, checking the list of persons barred from using U.S. financial services providers by the U.S. Office of Foreign Assets and Control (“OFAC”), and satisfying “Know Your Customer” regulatory requirements (“KYC”). But, until now other types of businesses operating in the USA did not have such requirements. That will change on January 1, 2024, when most U.S. business entities will become subject to a new anti-money laundering regulatory regime named the “Corporate Transparency Act.”

In 1995, under the leadership of then Chief Judge Judith Kaye, New York State established. the Commercial Division of the Supreme Court. Upon its creation, the Commercial Division was one of the first state court trial divisions. devoted entirely to business cases. Fast forward almost 20 years Iater. The success of the Commercial Division can be measured by the depth and breadth of the cases over which its judges preside, the active and innovative management·techniques employed by individual judges to manage cases of ever~increasing complexity, and the desire of nearly all counsel who are litigating a business case to have their matter heard in the Commercial Division.

This document is an Appendix provided to attendees of a continuing legal education presentation by Ladd Hirsch and Patrick Keating on November 3, 2023. The examples of contract provisions provided below are provided to illustrate how various optional provisions discussed during the presentation might be written in a contract. These example provisions are not appropriate for every contract. An attorney should carefully consider this issue and tailor each provision to the needs of the contract at issue.

The new Article 12 of the Uniform Commercial Code (UCC, or Code) is part of a broad set of amendments promulgated in 2022 by the Code’s sponsoring organizations, the Uniform Law Commission and the American Law Institute. As of late-September, 2023, ten jurisdictions have enacted the amendments, the bill awaits the governor’s signature in one jurisdiction, and there is still a possibility for enactment this year in three jurisdictions. Many more enactments are expected in 2024. Article 12 contains only seven sections but they are quite dense. This paper is limited to an exploration of the key concepts with many of the details (including notably the choice-of-law rules in Section 12-107) being omitted. The reader is referred to the Prefatory Note to the article and to the Official Comments to its sections for additional explanations. Great care has been taken to make them comprehensive and understandable.

This article discusses business law-related bills introduced in the 2023 Texas Legislature important to business law practitioners. They include bills related to property tax relief, anti-foreign ownership, TikTok use, ESG, UCC Article 12, sealing of trade secret documents, and data privacy law, as well as the Paxton impeachment trial.

This paper addresses recent judicial, administrative, rule-making, and legislative developments for both the Texas sales and use tax and Texas franchise tax.

This recent developments outline discusses, and provides context to understand the significance of, the most important judicial decisions and administrative rulings and regulations promulgated by the Internal Revenue Service and Treasury Department during the most recent twelve months— and sometimes a little farther back in time if we find the item particularly humorous or outrageous. Most Treasury Regulations, however, are so complex that they cannot be discussed in detail and, anyway, only a devout masochist would read them all the way through; just the basic topic and fundamental principles are highlighted – unless one of us decides to go nuts and spend several pages writing one up. This is the reason that the outline is getting to be as long as it is. Amendments to the Internal Revenue Code are discussed to the extent that (1) they are of major significance, (2) they have led to administrative rulings and regulations, (3) they have affected items previously covered in the outline, or (4) they provide an opportunity to mock our elected representatives; again, sometimes at least one of us goes nuts and writes up the most trivial of legislative changes. The outline focuses primarily on topics of broad general interest (to us, at least) – income tax accounting rules, determination of gross income, allowable deductions,treatment of capital gains and losses, corporate and partnership taxation, exempt organizations,and procedure and penalties. It deals summarily with qualified pension and profit-sharing plans,and generally does not deal with international taxation or specialized industries, such as banking,insurance, and financial services.

This is a copy of the slide deck used in the presentation.

In the world of corporate transactions, risk mitigation and deal facilitation are paramount. One indispensable tool used by both buyers and sellers is Corporate Transaction Insurance (“CTI”). This article and the accompanying presentation by the authors aim to demystify CTI, shedding light on its various forms and highlighting its impact on M&A deals. Especially in the last two decades, CTI has emerged as an alternative to the tools used to secure indemnification obligations in corporate transactions, enabling buyers and sellers to pursue their objectives with greater confidence. For sellers, CTI is a potent tool to attract competitive offers, assuage post-closing anxieties, and reduce clawback risks. Buyers, on the other hand, can use CTI to bolster their bids, safeguard relationships, and secure remedies for unforeseen issues. For both parties, CTI is often used to facilitate successful negotiations and eliminate potential obstacles to closing a transaction, such as protecting against unanticipated and unknown breaches of representations and warranties.The topics covered in this article consist of a primer on the most commonly used CTI, Representations and Warranties Insurance, followed by a brief discussion of other crucial and emerging forms of CTI. Contingent Risk Insurance, Tax Insurance, Environmental Insurance, and Litigation Insurance each play a pivotal role in addressing known risks, ensuring the smooth flow of corporate transactions, and mitigating potential roadblocks that may get in the way of closing a transaction. Each of these types of CTI could be the subject of a longer, more in-depth presentation.We hope this article and our presentation serve as a valuable introduction to this topic, and we have made an effort to incorporate footnotes that refer readers to more comprehensive materials should they wish to explore the subject of CTI in greater depth.

This article summarizes several bills that were passed by the Texas Legislature in its 2023 Regular Session and that amend the Texas Business Organizations Code (the “TBOC”). There are many other bills that were passed affecting business law, so this article should not be viewed as containing a listing of all business-related bills. The article contains summaries only and should not be relied on as a complete description of any bill or portion thereof.

Every year businesses organized in, having a presence or principal office in, or otherwise actively engaging in business in, the great state of Texas enter into hundreds of thousands of written contracts to govern their business arrangements (“Texas contracts”). Many of these Texas contracts include provisions expressing the parties’ agreements regarding the state, or subdivision of a state, in whose courts any litigation arising in connection with the contract will be conducted (choice of forum) and the specific county, city or court within that forum in which litigation arising in connection with the contract is to be conducted (choice of venue). Those agreements have been formed based upon the parties’ understanding of the laws of Texas and other leading commercial states governing the subject matter jurisdiction and geographic jurisdiction of their courts as established by statute and judicial decision.

This article discusses fiduciary duties, some history regarding fiduciary duties in Texas, and fiduciary duties with respect to LLCs.

Litigation is part of doing business, and costs businesses millions of dollars annually. Thirty states have created specialized courts to address complex business litigation with greater efficiency and consistency. With the passage of House Bill 19 (HB 19) by the 2023 Texas Legislature and Governor Abbott’s signature on June 9, 2023, Texas now has a business court that will open its doors in 2024, becoming the thirty-first state to undertake this judicial innovation. This followed unsuccessful efforts to pass business court legislation in the 2015, 2017, 2019 and 2021 sessions of the Texas Legislature. What made the difference in 2023?

While 2022 featured many new state laws and court decisions concerning covenants not to compete in employment contracts, the state of non-competes in Texas saw no change. However, 2023 brought non-competes to the headlines nationally and created a lot of questions for business owners and employees regarding the continued enforceability of non-competes. As of the date of this article, non-competes are still enforceable in Texas. However, employers with employees in other states need to pay close attention to the state of play for non-competes in the state in which their employees reside. In addition, national assaults on non-competes have arisen from the proposed rule making by the Federal Trade Commission and the National Labor Relations Board. This article summarizes the factors to ensure anon-compete is enforceable in Texas and then discusses recent federal actions: the Federal Trade Commission proposed rule and the National Labor Relations Board memorandum.