July 18, 2019

Archives for November 5, 2012

“Veterans Stand Down” Event To Be Held November 8, 2012

The U.S. Department of Veterans Affairs Denver Regional Office will hold its second Veterans Stand Down event on Thursday, November 8, 2012. Homeless veterans with certain types of open court cases in the Denver County Court can meet with Denver County Court Judge Raymond N. Satter and volunteer attorneys to resolve those legal issues. Denver Bar Association volunteer attorneys will also provide information and referrals to legal services organizations.

“We had a great response last year to the court being in place at the Stand Down and we’re happy that we can continue to offer this valuable service, in addition to Denver Bar Association volunteers providing general legal information. In this way, veterans can take care of old pending matters and have important benefits reinstated once again,” noted Satter.

The Veterans Stand Down will be held from 8:00 a.m. to 2:30 p.m. Thursday at the Colorado National Guard Armory at 5275 Franklin Street. Veterans who attend will also receive food, clothing, health check-ups, and employment services.

Crowdfunding: A New Means For Start-up Capital (Part 1 of 2)

This is the first part of a two-part series. Stay tuned for Part 2.

Between the Colorado Business Law Institute and Denver Startup Week, October was ripe with exciting events for attorneys in Denver interested in the entrepreneurial community. After speaking with attorneys and entrepreneurs alike, it is clear that great interest exists surrounding the forthcoming federal regulations in The JOBS Act (“Act”) pertaining to “crowdfunding.”  Although there is hope that this funding model will be a great source of capital for wanting entrepreneurs, legitimate concerns exist that regulations will be too strict when implemented at the Federal level.  This two-part piece will briefly introduce the idea of crowdfunding, explore how it fits with traditional start-up financing options, and identify potential issues.

Crowdfunding will enable companies to raise capital by seeking funding from a large number of unaccredited investors in relatively small amounts without violating SEC registration and solicitation rules. Title III of the Act specifically permits companies to leverage the internet for this purpose through “funding portals.” At its core, crowdfunding is a simple idea. By way of example, it will enable entrepreneurs from various geographic locations to advertise the efficacy of their start-up entity through social media outlets to individuals in Denver, among other locations, and an interested Denverite could then invest limited funds with that start-up entity. As a result, a wider base of capital will exist for start-up companies to tap into, thereby complementing traditional funding avenues. This is important because less than two percent of start-up companies are ultimately funded by traditional angel investors or venture capitalists.

Crowdfunding rules and regulations are currently being debated and will be issued by the SEC in 2013 – nothing is final yet. As it stands, Title III of the Act will permit participating companies to sell up to $1 million in securities while remaining exempt from the requirements of Section 5 of the Securities Act. In addition to this cap, proposed restrictions on investors will limit crowdfunding investing to an amount tied to their annual income or net worth. Despite these restrictions, this is an exciting shift in the investment paradigm for entrepreneurs because the new rules will remove the strict restrictions on companies advertising and selling securities to unaccredited investors. Instead, companies will be able to solicit investments directly from unaccredited investors through an intermediary funding portal.

Crowdfunding is not a new idea. Rewards-based crowdfunding has been in existence for years without violating SEC rules and is popular for philanthropic and entrepreneurial causes. In this model, individuals invest money with a company or individual, but only as a donation or for some type of reward – there is no expectation of financial profit. Additionally, some companies are beginning to use existing state securities laws which exist in many states, including Colorado, to setup investment crowdfunding platforms that carefully work within the federal framework. This is a detailed topic beyond the scope of this entry.

This is Part 1 of a two-part series. Stay tuned for Part 2.

Joel Jacobson is a Contracts and Operations Associate with H.B. Stubbs Company, LCC – a national design and fabrication firm headquartered near Detroit, MI for exhibits displayed by technology and automotive companies. He focuses on contracts, employment law, and a variety of non-legal business issues. Joel serves on the Executive Council of the Denver Bar Association Young Lawyers Division and has an interest in topics impacting start-up companies in the Denver entrepreneurial community. He can be reached by email at jmjacobson1@gmail.com or on Twitter @J_m_Jacobson.

The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.

Colorado Judicial Ethics Advisory Board Opinion: Judge Whose Daughter is Marrying Deputy DA Must Recuse from That Attorney’s Cases but May Preside Over Cases from Other Attorneys in Same Office

The Colorado Judicial Ethics Advisory Board issued C.J.E.A.B. Formal Opinion 2012-07 on October 31, 2012, finalized and effective October 29, 2012.

Opinion 2012-07 considered a situation where a judge’s daughter was in a relationship with a deputy district attorney in the judge’s district. The judge is a District Court judge whose docket includes criminal cases. Throughout the course if his daughter’s relationship, the judge recused himself from cases involving her boyfriend, and made a full advisement when other attorneys from that district attorney’s office appeared before him. Recently, his daughter became engaged to the deputy district attorney, and the judge requested an opinion on whether he must recuse from all cases involving the district attorney’s office, and also if he could serve as the weekly “duty judge” who reviews and approves search and arrest warrants.

The Judicial Ethics Advisory Board concluded that the judge must continue to recuse himself from any case in which the deputy district attorney who is engaged or married to his daughter appears, but he may preside over cases from other attorneys in the district attorney’s office, provided that his future son-in-law has no personal involvement in those cases and provided that he makes a full disclosure to all parties regarding the relationship.

The Judicial Ethics Advisory Board also determined that the judge can continue serving as the weekly “duty judge” as long as his future son-in-law is not involved with preparing or reviewing any of the search or arrest warrants and affidavits.

The Board considered relevant portions of the Code of Judicial Conduct in making its determination, particularly Rule 2.11(A)(1) and (2)(b), which require recusal when a judge has a personal bias or prejudice, and there is a familial relationship. The discussion also noted that the potential for impropriety is greater in the private sector than the public sector for financial and reputational reasons.

All of the Colorado Judicial Ethics Advisory Board opinions may be found here.