June 23, 2019

Archives for October 28, 2012

Crowdfunding and the Jumpstart Our Business Startups Act

On April 5, 2012, President Barack Obama signed the Jumpstart Our Business Startups Act (JOBS Act) into law. The JOBS Act was intended to increase the ability of small businesses to raise capital.

The legislation makes several changes to existing laws for small businesses. It enlarges the time from two to five years for certain small companies to begin compliance with some regulations, including provisions of the Sarbanes-Oxley Act. It allows certain small businesses to have more shareholders before registering with the SEC and becoming a public company. It also creates a new exemption from public filings with the SEC, and gives wider latitude to “emerging growth companies.”

The JOBS Act makes direct mention of “crowdfunding.” Crowdfunding refers to the funding of a company by selling small amounts of equity to many investors. Title III of the JOBS Act amends Section 4 of the Securities Act to allow “crowdfunding” by exempting issuers from the requirements of Section 5 of the Securities Act when they offer and sell up to $1 million in securities, provided that individual investments do not exceed certain thresholds and the issuer satisfies other conditions in the JOBS Act. The SEC has been tasked with developing regulations for crowdfunding; these are being developed and implemented. Until the regulations are implemented, however, the SEC cautions that “any offers or sales of securities purporting to rely on the crowdfunding exemption would be unlawful under the federal securities laws.”

Chapter 26 of The Practitioner’s Guide to Colorado Business Organizations discusses the JOBS Act and other securities issues for small businesses.

CLE Book: The Practitioner’s Guide to Colorado Business Organizations

The 2012 Supplement to The Practitioner’s Guide to Colorado Business Organizations is now available. Click here to purchase the supplement online, or call (303) 860-0608.

Tenth Circuit: Debtor May Not Appeal from Bankruptcy Court to Both Bankruptcy Appellate Panel (BAP) and District Court

The Tenth Circuit issued its opinion in Woodman v. Concept Construction on Thursday, October 25, 2012.

Mr. and Mrs. Woodman filed for bankruptcy in 2008. On December 1, 2009, the bankruptcy court ruled that Peter Woodman owed Concept Construction, his former employer, over $600,000, a debt not dischargeable in bankruptcy since it was obtained through embezzlement. Mr. Woodman filed two timely notices of appeal from this decision by the bankruptcy court.  One appeal was heard by the bankruptcy appellate panel (BAP), which dismissed the appeal a month later for failure to prosecute.  The other appeal was heard by the district court, which decided to consider the matter despite the prior BAP ruling, but ruled against Mr. Woodman on the merits.  Mr. Woodman appealed from the judgment of the district court.

Bankruptcy appellate panels were designed to provide an alternative, not a supplement, to an appeal to the district court. Nothing in the statutory language creating the panels suggests that Congress would tolerate the confusion and waste of resources that would result from simultaneous appeals of the same bankruptcy court decision to both the district court and a panel. To the contrary, the statute authorizing appeals from the bankruptcy court speaks in terms of alternatives, giving a party a choice—an election—between the two appellate forums.

Accordingly, The Tenth Circuit concluded that Mr. Woodman’s second notice of appeal to the district court was a nullity. He could not have filed a second appeal to the district court so long as he had a pending appeal before the BAP. His “Notice Voluntary Withdrawal of Appeal” did not comply with the bankruptcy rules.

Therefore, the district court did not have jurisdiction to review the decision of the bankruptcy court. The district court’s judgment is VACATED and the case is REMANDED to that court for dismissal of the appeal from the bankruptcy court.

Tenth Circuit: Unpublished Opinions, 10/25/12

On Thursday, October 25, 2012, the Tenth Circuit Court of Appeals issued one published opinion and one unpublished opinion.

Unpublished

Segler v. The Ross Management Group

No case summaries are provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.