North America

Can Phase I Reports Hurt Your Client?

In an article titled, “How Phase I Reports Can Hurt Your Clients,” (ALI-ABA Practical Real Estate Lawyer, Vol. 27, No. 6, November 2011), environmental guru Larry Schnapf cautions purchasers of property that an ill-conceived Phase I report may result in their losing CERCLA ability protection or expose them to misrepresentation claims.  The article’s primary concern is that a Phase I report may not necessarily assist a purchaser in establishing a CERCLA:  1) third-party defense; 2) innocent landowner defense; or 3) bona fide prospective purchaser defense, the requirements for each of which are set forth in the statute. 

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New OIG Advisory Opinion – Pediatric Hospital May Provide Housing, Meals, etc.

New OIG opinion allows pediatric hospital to provide lodging, transportation, meals and other items to patients and their families.

For more information please visit or click on the headline above.

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U.S. Department of Labor Targets Hospitality Industry Through New iPhone/iPad Applications

By:  Casey Cosentino

There is an on-going trend by the U.S. Department of Labor (“DOL”) to leverage popular technology to increase public and consumer awareness of the laws and regulations it enforces. Indeed, the DOL is continually exploring creative ways to share information with the public using the fastest and most-wide reaching means available. Through technology, the DOL is intentionally providing employees and consumers with enforcement data about companies, particularly hotels and restaurants, so that they can make informed employment and patronage decisions. 

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Overhauling the Medicare Coverage with Evidence Development Guidance Policy? Comments Requested by CMS

On November 7, 2011, the Centers for Medicare & Medicaid Services (“CMS“) issued a public solicitation for comments on the Medicare program’s coverage with evidence development (“CED“) guidance policy. Comments are due by January 6, 2012. In CMS’s most recent solicitation for comments, CMS describes CED as a mechanism “through which we provide conditional payment for items and services while generating clinical data to demonstrate their impact on health outcomes.”[1] We urge all clients interested in Medicare coverage for new items and services to submit comments.

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Multistate Tax: InvestOhio offers up to $100 million in tax credits

The State of Ohio is now offering a non-refundable personal income tax credit for investing in small businesses in Ohio. Interested investors must act quickly for a share of the limited amount of tax credits, which will be awarded on a first come, first served basis. Registration begins Monday, November 14, 2011.

To encourage investment in the more than 900,000 small businesses in Ohio, the State has launched InvestOhio, a program which could allow a non-refundable personal income tax credit of 10 percent to investors who acquire an ownership interest in an Ohio small business. To be eligible, the Ohio-based business in which the investor invests must have no more than $50 million in assets or no more than $10 million in annual sales. The business must also have at least 50 Ohio-based employees that are subject to Ohio personal income tax withholding OR have more than half of its employees be Ohio-based employees that are subject to Ohio personal income tax withholding. The small business must reinvest the cash that was invested (into one of five categories of allowable expenses) within six months. Furthermore, the investor must retain his or her ownership interest for two years before claiming the tax credit. (We issued an alert on this subject in September 2011, InvestOhio: New Ohio tax credit enacted to encourage investment in Ohio).

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McDonald Hopkins Services and Industries Overview Brochure

Despite the complexity and uncertainty in the world today, our attorneys are focused on insightful legal solutions that help our clients strategically plan for an increasingly competitive future.

That is why we have an 80-year track record of counseling our clients through the most difficult times.

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Professional Women Too Stressed to Sleep

I was not surprised to see an article in The New York Times regarding the prevalence of insomnia among working mothers.

Last week, I attended a dinner of the National Association of Women Lawyers (NAWL) General Counsel Institute. At the dinner table, I enjoyed interesting conversation with some accomplished women. We shared anecdotes of work, work-related travel, children, homework, and sleep – or, more accurately, our lack of sleep.

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Estate Planning Alert: Low interest rates plus low valuations create extraordinary planning opportunities

Interest rates are at historic lows.  Market values of many assets are lower than they were a few years ago.  This juxtaposition creates potentially significant wealth transfer opportunities.  A few strategies offer particular advantage.  Let’s first review why the juxtaposition works and then review the planning opportunities.

The interest rates for loans to family members and related party transactions are lower than they have been in several decades because they are set by the IRS each month based on U.S. Treasury rates.  These rates in turn set the valuation rate used to determine the value of property transferred in certain types of gift strategies. As a result, this rate is at an all time low of 1.4% (in November).  In the valuation process, this interest rate is the assumed rate for valuing the remainder interest that is the taxable gift component in some of the strategies discussed below.  This rate is often referred to as the “hurdle-rate” in terms of the rate of return required for the strategy to perform as well as the valuation projection for tax purposes.  While relative investment rates of return are low, the assumed rate is fixed at the time of the transfer, so when rates of return increase to more normal levels and market values increase as a result, the chance for success of these strategies should be greater than under normal circumstances.

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Interns: potential costs of this unpaid workforce

What do AT&T, IBM, the Cleveland Indi- ans, and more than 800 other employers have in common? At present, they are all openly seeking unpaid interns on Craigslist and Monster. Unpaid interns allow companies to keep costs down while continuing to provide high-quality services and products to customers and clients – all in an economic climate where employers are looking to reduce expenses. Given that the nation’s unem- ployment rate is hovering around 9%, there is a large pool of candidates willing to take unpaid internships to demonstrate their considerable skills and experi- ence in the hopes of a paid position at the company or elsewhere.

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By Douglas Weiner and Meg Thering

On October 20, 2011, the Computer Professionals Update Act (“the CPU Act”) – one of the first potential pieces of good news for employers this year – was introduced in the U.S. Senate.  If passed, the CPU act would expand the computer employee exemption of the Fair Labor Standards Act (“FLSA”).  S. 1747.

Unlike much of the other legislation affecting employers that has been proposed or passed this year, the CPU Act would make business easier for employers and decrease the risk of employee misclassification lawsuits.  If the proposed legislation passes, employers would be able to classify more employees as exempt from the overtime provisions of the FLSA.  This would be a welcome change from the persistent drum beat of enhanced enforcement initiatives announced by government agencies and upticks in class and collective actions this year.

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