In my article “How Will the Recent Amendments to Illinois’s BIPA Affect the Use of Biometric Data?”[1] I reported on the Illinois State Legislature’s changes in Senate Bill 2979 to the Illinois Biometric Information Privacy Act (“BIPA”). The changes were effective on August 2, 2024. One of those changes amended the limits on damages to one recovery per violation per person, regardless of the number of instances of collections of biometric information using the same method.[2] A recent decision of the U.S. Court of Appeals for the Seventh Circuit held that the change in damages applies retroactively to cases pending when the BIPA amendments became effective.
In Clay v. Union Pacific Railroad Co.,[3] the Court of Appeals consolidated three interlocutory appeals posing a common legal question of whether the BIPA amendment effective August 2, 2024, applies retroactively to cases pending when it was enacted. In its analysis, the Court distinguished between legislative amendments that are procedural or substantive, stating, “Crucially, the Supreme Court of Illinois treats remedial changes as procedural, not substantive.”[4] The Court determined that the amendment to the damages section in BIPA (740 ILCS 14/20) was remedial and stated, “Illinois courts have consistently ruled that they ‘can apply retroactively statutory changes to procedural or remedial provisions, whether they are outright repeals or amendments.’ We take this principle as the rule of decision for this case.”[5]
The Court of Appeals held:
Because the amendment to Section 20 of BIPA constitutes a remedial change, Illinois courts would have us apply it to cases pending when it was enacted. A plaintiff who alleges thousands of claims under BIPA Section 15 is only “entitled to, at most, one recovery under” Section 20. We hold that this amendment applies retroactively because it impacts only the statutory damages available to plaintiffs—it does not change BIPA’s substantive standards of liability.
The district courts in all three cases erred by holding otherwise. On remand, the district courts may need to reevaluate how this holding affects other aspects of these cases, including subject matter jurisdiction. But for now, it is enough to note that these courts, and others dealing with similar cases, must ensure they follow the latest guidance of the legislature when calculating damages under BIPA Section 20.[6]
The BIPA damages discussed in Clay are limited to 740 ILCS 14/20 (as amended):
(b) For purposes of subsection (b) of Section 15 [740 ILCS 14/15], a private entity that, in more than one instance, collects, captures, purchases, receives through trade, or otherwise obtains the same biometric identifier or biometric information from the same person using the same method of collection in violation of subsection (b) of Section 15 has committed a single violation of subsection (b) of Section 15 for which the aggrieved person is entitled to, at most, one recovery under this Section.
(c) For purposes of subsection (d) of Section 15, a private entity that, in more than one instance, discloses, rediscloses, or otherwise disseminates the same biometric identifier or biometric information from the same person to the same recipient using the same method of collection in violation of subsection (d) of Section 15 has committed a single violation of subsection (d) of Section 15 for which the aggrieved person is entitled to, at most, one recovery under this Section regardless of the number of times the private entity disclosed, redisclosed, or otherwise disseminated the same biometric identifier or biometric information of the same person to the same recipient.[7]
The bottom line is that even though the BIPA damages and consequences are limited by the 2024 BIPA amendment, they can, depending on the facts, still be substantial and may include, the following, for each “person aggrieved by a violation” of BIPA as stated in 740 ILCS 14/20(a):
For a negligent violation: liquidated damages of $1,000 or actual damages, whichever is greater.
For an intentional or reckless violation: liquidated damages of $5,000 or actual damages, whichever is greater.
Reasonable attorneys’ fees and costs, including expert witness fees and other litigation expenses.
Other relief, including an injunction, as the state or federal court may deem appropriate.
Rosenbach v. Six Flags Entertainment Corporation,[8] a seminal case in the history of BIPA litigation that had substantial consequences in the law, concerned only a single plaintiff, Stacy Rosenbach, as Mother and Next Friend of Alexander Rosenbach. If a business has multiple employees, customers, or other third parties, and collects and/or uses their biometric information subject to BIPA, the damages for a BIPA violation could become substantial.
While biometric information offers many valuable opportunities for businesses, their employees, and customers, businesses and their legal advisors need to confirm that the business’s use complies with all applicable laws (including but not limited to BIPA) concerning use of biometric information, including, without limitation, in connection with artificial intelligence systems.
Published in the ABA publication Business Law Today on September 4, 2024. Note, the author has been writing about the intersection of biometric data and the law since 2019. A partial list of those articles is linked here. ↑
740 ILCS 14/20 (Right of action) (amended effective Aug. 2, 2024). ↑
Clay v. Union Pac. R.R. Co., 171 F.4th 975, 2026 U.S. App. LEXIS 9487 (7th Cir. Apr. 1, 2026). ↑
Mediation, ordinarily a voluntary dispute resolution process, is private, informal, confidential, and nonbinding. A mediator, as a professional neutral facilitator, assists disputing parties in reaching an agreement to settle part or all of their differences. This process allows the parties to self-determine the outcome without the formal rules of evidence or procedure used in a court proceeding.
The actual conduct of the mediation may vary depending upon the style of the mediator and the nature of the conflicts. For disputes involving business and human rights (“BHR”) violations, these conflicts are known to frequently arise from commercial activities where harm to individuals, communities, or workers infringes on internationally recognized rights and standards (e.g., UN Guiding Principles on Business and Human Rights, OECD Guidelines, ILO Declaration on Fundamental Principles and Rights at Work).[1]
This article aims to highlight the value of co-mediation in BHR-related disputes, where evaluative and facilitative styles of mediation that are commonly used in legal and transactional cases can complement relational mediation styles typically used in community and workplace conflicts to create a more fair, collaborative, and inclusive dispute resolution experience that benefits all stakeholders.
What Makes Mediating BHR-Related Disputes Different?
BHR-related disputes generally do not have a one-size-fits-all mediation style. Notable types of BHR-related disputes include conflicts relating to labor and employment (e.g., forced labor / modern slavery, child labor, inadequate working conditions, wage issues); environmental and community impact (e.g., harm to local populations through environmental damage); land and indigenous rights (e.g., ownership and cultural rights); and corporate accountability and governance issues (e.g., harms due to lack of remedy for victims, failure to conduct environmental and human rights due diligence). The mediation style used depends on whether the goal is to reach a settlement, establish accountability, or preserve a long-term relationship.
In most cases, facilitative mediation helps parties to better understand each other through guided communications, which are commonly used in labor disputes, supply chain conflicts, and early-stage grievances. However, rights-based violations or significant power imbalances can hinder progress through this approach and thereby require the mediator to take a more active role in assessing claims and predicting legal outcomes by way of reality-checking the parties’ positions through evaluative mediation. Another style known as transformative mediation focuses on empowerment and nonfinancial needs and interests—most often centered in corporate-community conflicts and indigenous rights issues—and aims to address deeper human rights concerns like restoring dignity and establishing mutual understanding. Lesser-known mediation styles that are unique to BHR-related disputes include rights-based and interests-based mediations, where special attention is given to internationally recognized rights and standards and considerations for the broader nonfinancial and social interests of affected parties.
Benefits of Co-Mediation in BHR-Related Disputes
Co-mediation by multiple mediators can add value in BHR-related disputes in a variety of ways. When complex legal, technical, financial, societal, and cultural considerations are present, a co-mediation team can bring different strengths and a more holistic approach to communicating with different stakeholders with varying interests and needs. For instance, one mediator with deep legal expertise or industry knowledge can offer an evaluative style of mediation, while another mediator with high emotional intelligence competency can focus on behavior or relationship management. This complementary approach allows for more nuanced and sensible engagement between and among the various stakeholders.
Another major benefit to co-mediation is its ability to bridge cultural, linguistic, and other relevant gaps. Cross-border commercial disputes frequently involve parties from different traditions and worldviews, negotiation styles, and languages. Having mediators from different cultural backgrounds can help reduce misunderstandings, build trust, and ensure that perceptions of neutrality and legitimacy remain intact among all the parties.
Whether a dispute is cross-border or not, parties that are sensitive about a mediator’s background, viewpoint, and cultural knowledge can benefit from having a co-mediation team with mixed mediation styles to balance those concerns and make the process feel more equitable. Co-mediators can also collectively test ideas, challenge assumptions, and refine strategies in real time.
However, it is important that the co-mediators are complementary in style and aligned in strategy. This requires strong coordination; a well-matched and collaborative co-mediation team can deepen trust, improve communication, and increase the chances of a durable settlement.
In summary, a mediator’s ability to effectively transition between the different mediation styles in BHR-related disputes can significantly impact process and outcomes. The goal is to balance fairness and practical resolution, and the holistic perspective and well-rounded approach that co-mediation brings can help the parties to reach an agreement that is both profitable and principled for all stakeholders—and in a language that understands both the business needs of global commercial operations and the personal needs of communities that support them.
A useful resource for understanding BHR issues is the Business and Human Rights Centre, a global organization and knowledge hub that works alongside partners and allies to deliver comprehensive BHR-related news in multiple languages. ↑
An increasing number of states have recently enacted healthcare transaction review laws (“TRLs”). These laws reflect a decisive shift in state health policy. Transactions that historically fell within the domains of corporate law, regulatory licensure transfer oversight, and federal antitrust enforcement are now subject to independent state-level review regimes that often require advance notice; extended waiting periods; and, in some jurisdictions, affirmative pre-closing approval.
These new TRL transaction approval processes, particularly the laws that require pre-closing approval, are more akin to historical certificate of need (“CON”) reviews with new additional review elements. The more intensive processes are designed to take a global view of the effect the transaction might have on the provision of healthcare in a particular state by assessing issues such as cost, quality, access, competition, and health equity.
While healthcare has long been highly regulated, the emergence of TRLs represents not merely incremental oversight, but a structural reconfiguration of regulatory authority over healthcare mergers and acquisitions. In effect, states with TRLs have positioned themselves as gatekeepers of healthcare consolidation, particularly where investor-backed entities, management services organizations (“MSOs”), and complex ownership structures are involved.
This article summarizes how TRLs are structured and examines the additional regulatory burden they impose on transacting parties.
Pre-Closing Notice or Approval as a New Burden
The most immediate and tangible burden imposed by TRLs is procedural, involving mandatory advance notice; prolonged waiting periods; and, in some states, pre-closing approval requirements. Several states—such as California,[1] Minnesota,[2] Massachusetts,[3] New Mexico,[4] New York,[5] Oregon,[6] Illinois, and Nevada[7]—have enacted laws requiring either pre-closing notice or pre-closing approval.
Other states, including Massachusetts, have enacted legislation introducing more rigorous measures that will lengthen the review process and potentially delay transactions, such as broadening the scope of the Health Policy Commission Cost and Market Impact Review (“CMIR”) process.[8] Additionally, Rhode Island has promulgated regulations establishing “lack of notification” penalties to ensure compliance.[9]
These new requirements are often in addition to existing processes related to changes of ownership for a CON, license, or provider number. In many cases, TRL processes represent a significant increase in regulatory burdens compared to existing CON or licensure requirements, extending review periods and necessitating more detailed disclosures. TRL processes also impose substantial additional costs on the buyer, including expenses for market studies, external legal counsel, and consultants, none of which may have otherwise been incurred.
Transactions that previously did not involve executory periods—such as certain mergers or acquisitions of physician groups or MSOs—now often do. Overall, in states with TRLs, the time frame from signing to closing has lengthened, in some cases substantially, ranging from 30 to 180 days for notice[10] and up to 215 days if a CMIR is initiated.[11]
Materiality and the Types of Transactions Subject to TRLs
TRLs generally apply to “material transactions” or “material changes,” which are broadly defined to capture transactions deemed significant enough to warrant regulatory oversight. This includes mergers, acquisitions, asset or ownership transfers, changes of control, revenue-sharing arrangements, the formation of new healthcare entities, and real-estate sale-leasebacks that affect healthcare operations. Many states also treat a series of related transactions occurring within a defined period—such as five years—as a single transaction subject to review.[12] Covered entities can include hospitals, hospital systems, group practices, MSOs, provider-sponsored organizations, health insurance plans, and other affiliated healthcare organizations.
In many states, specific financial thresholds determine which transactions trigger notice or review—for example, $10–$80 million in Minnesota[13] and $25 million in gross revenues in New York.[14] Special scrutiny is often given to private-equity-backed transactions, MSOs, and real estate investment trust (“REIT”) deals, with additional notice, approval, or operational requirements imposed when hedge funds, private equity firms, or similar investors are involved.[15]
At the same time, certain transactions are exempt from TRLs, including those below statutory financial thresholds: for example, California requires notice only for entities meeting specific revenue or asset thresholds,[16] and Connecticut requires notice only for “material changes” that significantly alter a group practice’s business or structure.[17] Routine contracts or internal restructurings are generally excluded, as in Minnesota, which exempts corporate restructurings, mortgages, secured loans, clinical trial affiliations, and employment contracts,[18] and Nevada, which excludes transactions between entities under common ownership or with preexisting relationships.[19] Other states, such as Indiana, exclude practitioner-owned providers majority-owned by licensed in-state practitioners,[20] and nonprofit relief exists in California under certain circumstances.[21]
Comprehensive Scope of Review
The Model Act for State Oversight of Proposed Health Care Mergers, developed by the National Academy for State Health Policy and updated in 2024, provides a harmonized framework for reviewing healthcare transactions.[22] Many states have incorporated its concepts, emphasizing transparency, corporate changes of control, service line closures, prohibitions of physician non-competes, and private equity oversight.
In general, most TRLs examine a wide range of factors aligned with public policy objectives, including market concentration and competition, transaction history, pricing and cost trends, service quality and patient experience, accessibility and equity, obligations to underserved or government-payer populations, provision of low-margin essential services, consumer protection, compliance with prior regulatory conditions, clinical workforce impacts, financial effects of real-estate arrangements, and the consequences of facility closures.[23]
As previously discussed, notice and pre-closing requirements vary by state, and disclosure obligations can be extensive, including ownership and control party identification, organizational charts, ownership structures, operational and financial data, transaction agreements, and supporting economic analyses.
Many TRLs provide for public participation through hearings, comment periods, and post-closing reporting to promote transparency—for example, Oregon may hold public hearings,[24] Indiana publishes ownership information annually,[25] and New York posts transaction summaries thirty days before closing.[26]
Enforcement mechanisms include civil penalties, investigations, injunctions, and, in some cases, the authority to block or unwind transactions, although most TRLs restrict enforcement to government authorities and do not confer private rights of action.
Practical Concerns and Conclusion
State healthcare TRLs mark a fundamental shift in the governance of healthcare markets. Through mandatory pre-closing notice or approval, expansive definitions of material transactions, scrutiny of control arrangements, extensive disclosure requirements, and post-closing oversight, states have assumed an intensified gatekeeping role over healthcare consolidation.
From a practical perspective, drags on transaction timing can further deal fatigue and result in additional issues between transacting parties and even busted deals. Beyond the procedural hurdles, these processes also impose additional costs on buyers, which might translate into valuation adjustments, purchase price reductions, or shifts in deal structure as buyers seek to reallocate the regulatory risk or to preserve expected returns. Moreover, the intrusiveness of required disclosures regarding ownership and control structures may discourage parties from pursuing transactions in TRL states altogether. The imposition of post-closing conditions or the possibility of such imposition can lead to additional pre-signing and pre-closing negotiations between the parties about the implications of such conditions. In certain cases, buyers may look to negotiate force majeure–type outs relating to the imposition of significant conditions due to a change in buyer expectations.
It’s clear that for transacting parties, these laws introduce substantial procedural and substantive burdens. For scholars and policymakers, they present a compelling case study in regulatory evolution—where state governments respond to perceived gaps in federal oversight by constructing parallel and sometimes broader regimes of transaction control.
Healthcare transactions in TRL states are no longer governed solely by corporate law, licensure and CON frameworks, and federal antitrust doctrine. There is now a broader, layered state regulatory architecture that reflects an increasingly interventionist conception of the public interest in healthcare markets.
Cal. Health & Safety Code § 127507(c)(2) (West 2025). ↑
Minn. Stat. § 145D.01, subdivs. 2(b)–(e), 5(a)–(c) (2025) (establishing a minimum sixty‑day notice period for material health-care transactions, allowing the attorney general to extend the review period by up to ninety days and authorizing the attorney general to seek injunctive or equitable relief, including modification or unwinding of a transaction that violates statutory requirements or threatens the public interest). ↑
Health Care Consolidation Oversight Act, N.M. Health Care Auth. (2025) (showing that once a complete notice of a proposed health-care transaction is filed, the authority has a 120‑day review deadline to act). ↑
N.Y. Pub. Health Law § 4552(1) (McKinney 2024) (§ 4552 requires notice to the Department of Health at least thirty days before closing of a material transaction and forwarding of the notice to the attorney general; it does not authorize pre‑closing approval). ↑
I’ve long wondered how it has become standard for agreement and plan of merger to be the title for contracts that provide for a merger. (I’ll use merger agreement to refer to such contracts.) This article explains that it’s the result of confusion over how state corporation statutes are worded, with the result being amplified through copy-and-pasting.
But using agreement and plan of merger adds a needless wrinkle to the straightforward conventions for naming contracts. This article explains why you can instead give a merger agreement the simpler title merger agreement, with there being no realistic prospect of your merger filing being rejected by a state agency. It also suggests legislative-drafting fixes that would eliminate, or at least neutralize, the confusion.
A Widely Used Title
It appears the title agreement and plan of merger is now used much more often than the simpler title merger agreement. From my 24 April 2026 search of the U.S. Securities and Exchange Commission’s EDGAR database (via Westlaw), I determined that of all contracts filed on EDGAR in the previous 12 months, only 26 contain the phrase thismerger agreement, whereas 562—21 times more—contain the phrase thisagreement and plan of merger.
I’ve seen three variants: merger agreement and plan of merger, agreement of merger and plan of merger, and plan of merger and merger agreement. There might be others.
But agreement and plan of merger is a relative newcomer. Isolated instances appear in online databases in documents from the 1940s and 1950s. Many more examples are to be found in documents from the 1970s (in administrative materials) and 1980s (in caselaw) onward, but presumably that reflects the greater quantity of materials from recent decades that are available online.
“Plan of Merger” and “Agreement of Merger” in Corporation Statutes
Use of the title agreement and plan of merger is a function of state corporation statutes.
The Model Business Corporation Act (MBCA) uses the phrase plan of merger. That might be a carryover from earlier state corporation statutes. The influential New Jersey General Corporation Act of 7 April 1875 used plan of merger. (The phrasing of plan of merger, featuring plan modified by a prepositional phrase acting adjectively, now seems dated. Use of some comparable phrases has fallen off in favor of a version with a preceding attributive noun. For example, plan of study is now used far less often than study plan.)
States began adopting the MBCA soon after it was first promulgated by the American Bar Association in 1950. Thirty-six U.S. jurisdictions have now adopted the MBCA in whole or in part.
MBCA section 11.02(a) says “one or more domestic business corporations may merge with one or more domestic or foreign business corporations or eligible entities pursuant to a plan of merger, resulting in a survivor.” Section 11.02(d) says what information about the merger a plan of merger must include; it’s broad enough that “the terms and conditions of the merger” is one of the listed items. The MBCA doesn’t require parties to sign a plan of merger: Under section 11.04, it must be adopted by the board and approved by shareholders. And because of amendments to the MBCA, under section 11.06 a plan of merger need not be included with articles of merger filed with the state.
That approach—not requiring that the plan of merger be filed—is followed by a majority of states that have enacted statutes based on the MBCA. But Georgia, Kentucky, Minnesota, Nebraska, New Jersey, New Mexico, North Dakota, Rhode Island, South Carolina, Utah, and Virginia do require that the plan of merger be included in the articles of merger (also called a “certificate of merger,” depending on the state) filed with the relevant state agency.
Some states that haven’t enacted statutes based on the MBCA use the phrase plan of merger. Five others use agreement of merger instead: California, Delaware, Kansas, Ohio, and Oklahoma. (Like plan of merger, agreement of merger seems dated. And as in the case of plan of merger, use of some comparable phrases has fallen off in favor of a simpler version—witness the shift from agreement of sale to sale agreement.)
How Plans of Merger Relate to Merger Agreements
State corporation statutes that use the term plan of merger don’t also use the term merger agreement (or agreement of merger). So the statutes are silent regarding how plans of merger relate to merger agreements.
Some commentary considers plans of merger and merger agreements to be equivalent. For example, Practical Law’s glossary entry for plan of merger begins, “An agreement setting out steps of a merger of two or more entities,” even though the MBCA doesn’t in fact require plans of merger to be signed. Other commentary refers to both without suggesting they’re equivalent or offering any distinction.
The requirement that a plan of merger include “the terms and conditions” of the related merger could be understood as meaning that whatever the parties agree to regarding the merger must be included in the plan of merger. That leads some practitioners to treat the entire merger agreement as the plan of merger.
But others rely on a more limited plan of merger containing only key information and attach it as an exhibit to the merger agreement. (For an example of that approach, see section 2.01 of this merger agreement.) In states that require that the plan of merger be included in the articles of merger, the exhibit would be filed, not the merger agreement. See 18 John H. Matheson, Philip S. Garon & Michael A. Stanchfield, 18 Minnesota Practice Series:Corporation Law & Practice § 7:6 (3d ed., Jan. 2026 update). That has the benefit of limiting what a state agency must review, and it allows privately held companies to keep information confidential.
The Perceived Risk of Rejected Filings
But does including plan of merger in the title serve a useful purpose? If standard naming conventions applied, we’d give merger agreements the title merger agreement.
In the case of those states that require that articles of merger include the plan of merger, some lawyers have told me that if whatever contains the information that’s required in the plan of merger omits plan of merger from the title, you risk having your filing rejected. (An abbreviated plan of merger that’s an exhibit to the merger agreement wouldn’t pose that ostensible problem, assuming plan of merger appears in the title.)
A New Jersey resource refers to that risk:
If the acquisition agreement is used as the plan of merger, it is good practice to entitle it Plan and Agreement of Merger or Plan of Merger and Acquisition Agreement, or other words that include the words plan of merger, to avoid the risk of a filing clerk rejecting the certificate of merger because the clerk assumed the plan of merger was not included.
2 Jeffrey Shapiro, New Jersey Corporations & Other Business Entities § 14.06 (3d ed. 2025).
But what makes a plan of merger is the information it contains. It would be best to think of plan of merger not as a title but as a catchall term for merger information required by statute.
Thinking that omitting plan of merger from the title of a merger agreement could get a merger filing rejected relies on one of the defects that make up the legalistic mindset: literal-mindedness. You’re literal-minded if you think that to express the meaning conveyed by a term of art, you must use only that term of art. Literal-mindedness is inherent in the notion that a document can’t constitute a plan of merger unless plan of merger features in the title.
Virginia’s Experience
Let’s consider how this plays out in the case of Virginia, one of the states that require that articles of merger include the plan of merger.
The relevant statute, Virginia Code section 13.1-720, says articles of merger submitted for filing “shall set forth” the plan of merger. Because the plan of merger consists of specified information, there’s no reason to think that complying with the statute requires anything other than stating the relevant information, either in the filing or in an attached document. In particular, there’s no reason to think that the phrase plan of merger must appear in the title of a document.
I discussed this with a senior official of the relevant agency, the Virginia State Corporation Commission. They told me the Commission receives inquiries a couple of times a year from people wondering whether it rejects submissions that have “incorrect” titles, such as articles of merger that don’t include something with plan of merger in the title.
Although the Commission doesn’t provide advice on such questions, it is inclined to focus on the information that accompanies articles of merger rather than the label applied to that information. But if articles of merger include a merger agreement that doesn’t include plan of merger in the title, a Commission reviewer might delay approving articles of merger so they can check whether omission of plan of merger has any implications.
The Clerk’s Office of the Commission sometimes issues guidance on filing questions. They could conceivably do so to address this issue.
So the Virginia State Corporation Commission doesn’t have a policy of rejecting filings if the title omits plan of merger. Because I’ve found nothing to suggest that any of the other states that require filing the plan of merger has such a policy, I suspect that concern that a filing might be rejected is based on perceived risk, fueled by literal-mindedness, rather than actual risk.
Explaining Broader Use
So fear of filings being rejected is unconvincing as a reason for using plan of merger in the title of a merger agreement. Furthermore, that explanation applies only to states that require that articles of merger include the plan of merger. The title agreement and plan of merger is used in merger agreements involving other states, too. A different explanation is required to explain that use.
In the case of those MBCA states that don’t require that you file the plan of merger, one possible explanation for including plan of merger in the title is that those doing deals think it helpful to signal to those involved in a deal that the contract includes the information that by statute must be included in a plan of merger.
But the title agreement and plan of merger is routinely used as the title in merger agreements for mergers governed by state statutes that don’t use the phrase plan of merger. To pick just one high-profile example, the 2026 merger agreement for Paramount Skydance Corporation’s acquisition of Warner Bros. Discovery, Inc. provides for the merger of two Delaware corporations, and it uses the title agreement and plan of merger. Because the Delaware General Corporation Law uses the term agreement of merger, not plan of merger, there’s no basis under Delaware law for including plan of merger in the title of a merger agreement.
The likeliest explanation for this cross-contamination is copy-and-pasting. It’s easy to see how it happens: If someone is copy-and-pasting from a contract that contains something they’re unfamiliar with, they might be inclined to leave the unfamiliar part as is, either because they think it looks sophisticated or because they assume it serves some purpose they’re unaware of.
So economy of hypothesis suggests that agreement and plan of merger has become the preferred title for merger agreements by the following process: Due to lawyer literal-mindedness, some drafters elected to use agreement and plan of merger as the title, to acknowledge that the merger agreement isn’t just a merger agreement—it’s also a plan of merger! Then heedless copy-and-pasting kicks in, and here we are.
Besides being overblown, lawyers’ concern that filings might be rejected in states that require that you file the plan of merger is too limited, geographically, to explain the spread of agreement and plan of merger. If copy-and-pasting has resulted in agreement and plan of merger being used even though there’s no basis for it under Delaware law, we can assume that it has spread everywhere through copy-and-pasting.
Options for Those Doing Deals
At best, use of agreement and plan of merger as a title for merger agreements is an artifact of literal-mindedness. At worst, it’s applied without thinking. So it would be best if we stopped using agreement and plan of merger.
As things stand, in those states where the corporation statute doesn’t use the phrase plan of merger, it would make sense to use merger agreement as the title of a merger agreement: There’s no conceivable basis for including plan of merger in the title.
In those states where the merger statute uses the phrase plan of merger but doesn’t require that articles of merger include the plan of merger, you could safely use merger agreement as the title of your merger agreement because no state agency would have any say. But to resolve confusion over what function plan of merger serves, consider including a recital saying that the merger agreement, or an exhibit to the merger agreement, contains the information required in a plan of merger. For example, “This agreement contains [in sections A (heading), B (heading), and C (heading)] [in exhibit X] the information required for a plan of merger under [statute].” That’s more informative than just using plan of merger in the title.
This approach is already in use. A 2024 merger agreement says, in section 1.07, “This Article I [(The Merger)] and Article II [(Merger Consideration; Exchange of Certificates and Book-Entry Shares)] and, solely to the extent necessary under the MBCA, the other provisions of this Agreement shall constitute a ‘plan of merger’ for purposes of the MBCA (the ‘Plan of Merger’).” My version is simpler, and placing it in the recitals would make it appropriately accessible.
Even in those states where the merger statute uses the phrase plan of merger and requires that articles of merger include the plan of merger, you could justify using just merger agreement as the title of your merger agreement, given the lack of any evidence that state agencies reject filings that don’t use plan of merger in a title. And you could remove the risk of confusion, for anyone able to think rationally, by including in the merger agreement a recital of the sort mentioned above. By specifying what information is located where, such a recital would also make things easier for the agency checking for compliance with the corporation statute.
A Legislative Fix
But addressing the root cause of the process that has given us agreement and plan of merger—confusion over what constitutes a plan of merger—would require a legislative-drafting fix. That would best be accomplished by eliminating the phrase plan of merger from the MBCA by following Delaware’s approach, but using instead of agreement of merger the more modern merger agreement. That fix would require, among other amendments, changing plan of merger to merger agreement throughout the MBCA. But that’s unobjectionable: It wouldn’t impose a meaningful cognitive burden on those consulting the MBCA.
Another way to eliminate the confusion would be to amend the MBCA so it says that the phrase plan of merger describes a contract that contains the information required by statute.
In 2025, the Business Corporation Law of Alabama, an MBCA state, was amended to that effect. It now says this:
Except as set forth in Section 10A-2A-11.02(g), a plan of merger, whether referred to as a plan of merger, an agreement of merger, a merger agreement, a plan and agreement of merger, an agreement and plan of merger, or otherwise, means a writing described in Section 10A-2A-11.02 and includes any agreement, instrument, or other document referenced therein or associated therewith that sets forth the terms and conditions of the merger.
Ala. Code § 10A-2A-11.01 (LexisNexis 2026).
A Georgia statute achieves the same effect for purposes of limited liability companies:
Pursuant to a written agreement, which, unless otherwise provided therein, will constitute the plan of merger required by Code Section 14-11-902 if it contains the provisions required by that Code section, a limited liability company may merge with or into one or more business entities with such limited liability company or other business entity as the agreement shall provide being the surviving limited liability company or other business entity.
Ga. Code Ann. § 14-11-901 (West 2026).
Here’s my suggestion for achieving the same effect by adding to the definitions in MBCA section 11.01 the following:
“Plan of merger” includes a written contract that provides for a merger, whether or not the title of that contract uses the phrase “plan of merger.”
The MBCA says what a plan of merger must include, so by operation of the proposed definition, that requirement would apply also to a merger agreement, regardless of the title.
Defining plan of merger involves just one change. But instead of eliminating the confusion, it would leave it in place, while inserting an antidote for attentive readers to find. So it’s the less-effective option.
It might also be helpful to amend MBCA section 11.02(d) to make clearer what is meant by “the terms and conditions of the merger.” But because the MBCA no longer requires the plan of merger to be filed, any such amendment would have no bearing on meeting the requirements of a corporation statute by filing an exhibit to a merger agreement rather than the entire merger agreement. How that is handled would depend on the corporation statutes in the eleven states that still require that the plan of merger be included in articles of merger.
Breaking the Habit
The title agreement and plan of merger is now with us, and it’s not going away any time soon. Once something is in contracts, it tends to stay in there. After all, plenty of us still use witnesseth, even though it became a quaint fossil long ago.
So why aim to break the habit?
In swapping out agreement and plan of merger for a slightly shorter title, the aim wouldn’t be to make contracts marginally more concise. Instead, it would be to disrupt the factors that have fueled the spread of agreement and plan of merger: Confusion over how a plan of merger relates to a merger agreement. The triggering of literal-mindedness. And overenthusiastic copy-and-pasting.
Neutralizing that dysfunction might help remind us that our contract-language choices should make sense.
Mediation is nonbinding, but the goal is a binding deal. If a case is resolved, there may be a handshake, an unsigned or signed term sheet, or a full-blown settlement agreement. In my experience, the most common conclusion of successful mediation is a signed term sheet that contemplates a comprehensive settlement agreement later. But that is not universal.
There may be a mere exchange of emails, or an unsigned mediator’s proposal. Moreover, if there is a term sheet, it may say that it is fully binding, or more rarely, that it is not binding, or may simply not take a position one way or the other. As with any settlement, taxes should be considered, but when and how taxes should be addressed can vary.
The tax issues that can arise in a settlement are numerous. In an employment dispute, are all payments wages subject to withholding, or should there be an allocation between wage and nonwage damages on Form 1099? Can anything be excluded from income for physical injuries or physical sickness? Is any equity, or stock option compensation to be paid, and can anything be taxed as capital gain? How will IRS Forms W-2 and Forms 1099 come into play?
If a homeowner sues an insurer for not covering damage, relocation expenses, etc., what should the settlement agreement say about tax treatment? In an intellectual property dispute, is there a case for capital gain treatment to the plaintiff, and will particular wording help? If the case goes to verdict, has been appealed but settles during appeal, are the parties hamstrung by the verdict from a tax viewpoint? A complete listing of the potential tax considerations would be lengthy.
In each case, if a settlement is reached, monies will be paid and documents need to be prepared. But how should taxes be addressed during the mediation and later? The mediator may not want the parties to leave without signing a term sheet indicating that they are resolving the case for money, with a few other basic terms. Commonly, the term sheet will say that the parties will cooperate to produce a final longer settlement agreement which both parties will sign.
But what happens if a comprehensive settlement agreement is never executed? If the term sheet states that it is binding, and if it says nothing about taxes, where do the parties stand if they cannot agree on the terms of a long-form settlement agreement? In my experience, both sides usually want to have a comprehensive settlement agreement for numerous reasons, and some of those reasons may be more important than taxes.
Perhaps for that reason, I rarely see a binding term sheet that ends up being the definitive agreement. However, if the parties cannot agree on a more fulsome settlement agreement, it does occasionally happen. In those cases, one or both parties are likely to be happy that they do have a binding settlement agreement, albeit in a term sheet that the parties likely thought would never end up as the operative settlement agreement.
Tax Considerations for Signing a Term Sheet at Mediation
Does the fact that this turn of events can and does happen raise the question whether you should try to address taxes in a binding term sheet? After all, you are unlikely to know at the time of the term sheet if your case is going to be one of those few cases in which no long-form agreement is ever signed. Litigators are usually not responsible for the tax issues, so if there is not a tax adviser involved at the conclusion of the mediation, the term sheet may not say anything about taxes.
However, some term sheets include a provision that the parties will cooperate on an appropriate tax allocation. Another approach is to say that “the tax allocation and treatment shall be subject entirely to the plaintiff’s approval.” Another possibility: “the entire settlement payment shall be made to a qualified settlement fund established by the plaintiff.”
You could get more specific, such as by providing that there will be no federal or state tax withholding taken on the settlement payment. Or you may want to say that the settlement payment is entirely on account of personal physical injuries. Or you could say that a Form 1099 for the settlement payment will be issued to plaintiff’s counsel only, and not to the plaintiff.
There can be value in each of these approaches, and they are better than nothing. That is, if your choice is a skeletal term sheet that says nothing about taxes or a term sheet that addresses the most important tax issues to you, the latter seems better. Of course, even these kinds of tax provisions may be very difficult to orchestrate at the end of a long mediation where only the dollar amount has been resolved, and when everyone wants to go home.
Ideally, of course, whatever the binding term sheet says, the more comprehensive settlement agreement will be ironed out and signed later to flesh out all the issues, including taxes. As noted, I only rarely see binding term sheets that end up being the definitive settlement agreement because the parties are unable to agree on the terms of a long-form agreement. Still, I have already seen it occur several times this year, so it does occur.
Does that mean you should not sign a binding term sheet? This may be where the tax tail starts to wag the dog. That is, if the settlement is a good one, nailing it down and signing a term sheet likely makes sense from a business perspective. Still, the fact that the term sheet just might end up being the only document that the parties sign should make you think a little about taxes, and perhaps seek tax input before the mediation, or at least before your client signs a term sheet.
I only address tax issues, but there may be many other aspects of a customary long-form settlement that the parties would also be giving up if the post-term sheet negotiations break down and the long form is never signed. With a possible long-form stalemate, the potential choices impacting taxes might include these, among others:
Include all the tax provisions in the term sheet that you think are critical before it is signed, based on the assumption that the long form will never be signed.
Don’t bother with a term sheet and instead negotiate and sign a long-form settlement at the end of the mediation.
Don’t sign a term sheet; rely on an exchange of emails. A mediator’s proposal, which concludes some mediations, accomplishes the same, although some mediators may ask for a term sheet to be signed if the parties both accept the mediator’s proposal.
Tax Considerations in Signing a Long-Form Settlement Agreement at Mediation
Signing a comprehensive settlement agreement at mediation has advantages and disadvantages. On the plus side, if the parties hammer out a full-blown settlement agreement the day of the mediation, by definition, the binding versus nonbinding term sheet issue will not arise. Also, when the case is concluded with a full settlement agreement, it will really be concluded, hopefully including the tax issues.
On the minus side, the parties will be rushing to address many issues and to complete a settlement agreement. That may be after many hours (or even days) of mediation. It may be late at night, and everyone will be tired. Proximity and resources can also be an issue. The mediation may occur in a third-party location such as a mediator’s office.
The plaintiff and defense lawyers may be working on a draft settlement agreement on laptops or tablets. They may not have their full resources available, much less the time to reflect upon all the provisions and issues. If a binding settlement agreement is signed and there is no further documentation, there will be little opportunity to catch errors or to reflect on drafts over time.
Moreover, there may be little time to discuss the tax points or to solicit and implement tax advice. In some cases, there will be tax input by one or both sides prior to the mediation. It may be possible to have a template for what the plaintiff is requesting and for what the defendant is willing to provide on the tax points. For example, in an employment dispute, the parties will probably have considered the wage versus nonwage question in at least a general fashion.
In addition, if there is an argument for excluding some damages for physical injuries/sickness under Internal Revenue Code Section 104, the parties should consider it in advance. Any insurance coverage restrictions should be considered, too. However, in some cases, the parties may not seriously consider tax issues until a dollar amount is agreed upon by both sides.
Even if there has been some tax discussion, the tax issues may become intractable or be ignored if the settlement agreement must be signed that night. If a full-blown settlement agreement must be signed that night and the parties do not have the time or expertise to consider tax issues, then the tax issues may fall where they may. Both parties may suffer, especially the plaintiff. The plaintiff may have a painstaking wait until January 31 of the next year when IRS Forms 1099 are issued and may end up locked into a tax position they do not like.
Conclusion
In the end, I suspect that most successful mediations are still likely to involve a binding term sheet at conclusion. One or both sides want to know that they truly have a deal, and in most cases, the details, including the tax details, can be worked out later. Even so, it is worth considering your position in the unlikely event that no comprehensive settlement agreement will ever be signed.
It might make you or your client more desirous of saying something about taxes in the term sheet. Despite my discussion of the pluses and minuses of forgoing a term sheet and moving directly to a comprehensive settlement agreement at the end of mediation, there is nothing (tax-wise at least) wrong with that approach either. However the case is concluded, the tax issues are likely to be resolvable. But as in so many other settings, the side that is most prepared and proactive on the tax issues is more likely to end up ahead on those points.
It’s been six years since a global pandemic transformed the employment landscape for nonprofit organizations by cementing remote and hybrid work arrangements as an industry norm. While remote work presents many benefits—reduced real estate footprints, more manageable overhead costs, recruitment and retention advantages, and the promise of a better work-life balance—it also grafts expansive compliance obligations onto employers, which must comply with dozens (even hundreds) of employment laws in the various jurisdictions in which their employees reside and work. This article addresses legal, compliance, and practical issues and challenges facing a multijurisdictional nonprofit workforce. Note that this article is limited to domestic United States and not international jurisdictions; employing workers in international jurisdictions poses significant additional compliance obligations.
State Laws
In most instances, the laws in the jurisdiction where a remote employee principally works will govern the employment relationship. Employment laws vary from state to state and municipality to municipality.
Business Registration: All states require “foreign” (not incorporated in the state) corporations to register to do business in the state. Each state has different guidelines about when “physical presence” triggers state registration requirements, but, generally, having a remote employee in a state will trigger such a registration obligation. A business that does not establish a physical presence in a specific jurisdiction still may need to register as an employer in that jurisdiction in order to satisfy state payroll taxation requirements.
Taxation: Businesses that employ remote workers may need to pay (and withhold and remit) taxes to foreign states. Certainly, payroll deductions will be specific to the location in which each employee resides and principally performs their work. Employers also may need to fund a state’s unemployment insurance, disability insurance, or workers’ compensation programs, or, in some instances, contribute to a state’s paid-time-off (“PTO”) programs, as is the case in Maine, which levies a payroll tax on both employers and employees to fund its paid family and medical leave bank.
Employee/Independent Contractor Classification: While all nonprofit employers are subject to the U.S. Department of Labor’s worker classification guidance under the federal Fair Labor Standards Act (“FLSA”)[1] and Internal Revenue Service (“IRS”) worker classification guidance, employers also must abide by the worker classification laws in each state where remote workers reside. Some states have adopted the Department of Labor’s Economic Reality Test; others have adopted the IRS Common Law Test, the ABC Test, or variations of these tests. Employers must take care to comply with both federal and state laws when classifying employees and independent contractors. Improper classifications can result in statutory fines, back taxes and benefits, and other penalties.
Minimum Wage and Overtime: As with worker classification laws, all employers must comply with FLSA regulations on minimum wage and overtime pay. In addition to complying with the federal regulations, employers also must adhere to state minimum wage and overtime laws, which tend to be more employee-friendly than federal law. Each state sets its own minimum wage and rules on overtime pay. Vermont, for example, sets the minimum wage at $14.42 per hour, nearly double the federal minimum wage of $7.25 per hour. And California, for instance, requires nonexempt employees to be paid overtime at time and a half for all hours worked over eight hours in a day, whereas most states and federal law require the payment of overtime pay for hours worked over forty in a week. Employers must pay employees at or above the minimum wage set in the employee’s principal locality, all the while being mindful that certain municipalities set the minimum wage even higher than the state. In addition, employers should be mindful of how minimum wage differences between and among the states may impact the optics and fairness of an organization’s otherwise neutral salary administration policy. Finally, hybrid employers that require nonexempt employees to travel to and from headquarters should evaluate state laws carefully to discern whether nonexempt employees may be eligible to be paid wages (and overtime pay, if applicable) for travel time between their remote work location and headquarters.
Expense Reimbursement: Some states such as California have enacted laws that require employers to reimburse remote employees for certain expenses related to remote work, such as a portion of cell phone and internet plans. Again, in addition to regulatory compliance, an employer should consider how differential treatment with respect to expense reimbursement may impact staff morale, even if a legitimate business reason (e.g., compliance with the law) supports the differential treatment.
Leave Accrual: Several states regulate sick leave and PTO accrual, setting minimum thresholds for accrual, rollover, and payout upon termination. Internal policies must be styled carefully in remote and hybrid work contexts. Most notably, some states such as Colorado prohibit “use-it-or-lose-it” policies. In these states, while employers can cap leave accrual, they cannot cap rollover or payout upon termination, and any policies to the contrary will not be enforceable. Employers must be able to square their leave policy with all applicable state laws where their employees reside and work.
Paid and Unpaid Leave: All states have different laws with respect to paid and unpaid leave. Colorado, for example, entitles employees to jury duty leave, election leave, National Guard leave, Civil Air Patrol leave, and emergency responder and natural disaster leave, among other things. The District of Columbia entitles employees to bereavement leave, paid sick leave, jury duty leave, and family and medical leave, among other things. Other common types of leave include organ and blood donation leave, school activities leave, election officer leave, and crime victim or domestic violence leave. Some states require paid leave in certain circumstances, such as Alabama, which requires employers to pay full-time employees their normal wages while responding to a jury summons or serving jury duty. Other states, such as Mississippi, do not require such leave to be paid, though both federal law and Mississippi state law require employers to provide unpaid leave in certain circumstances. The myriad of state laws governing paid and unpaid leave is among the most complex aspects of establishing and maintaining a legally sound remote work compliance program, especially considering that this sampling does not take into account additional laws specific to various municipalities, such as Montgomery County, Maryland, which affords even greater leave benefits to employees than the State of Maryland otherwise offers.
Discrimination and Harassment: While federal law prohibits discrimination and harassment based on certain protected classifications, some states have expanded protected classifications. For example, twenty-seven states have enacted “Crown Laws” prohibiting discrimination or harassment based on hair texture and hairstyle. Other states prohibit discrimination based on homeless status or status as a victim of domestic violence. The District of Columbia prohibits discrimination on the basis of matriculation status. Several states require employers to furnish various notices to employees related to discrimination and harassment, as is the case in Illinois, which requires employers to furnish a notice about how to file a discrimination claim under the Illinois Human Rights Act.
Workplace Training: Some states mandate certain workplace training. For example, California requires employers with five or more employees to provide sexual harassment prevention training every two years, with different requirements for supervisory and nonsupervisory employees.
Miscellaneous Law: States also regulate criminal background checks, workers’ compensation, restrictive covenants (e.g., noncompete and nonsolicitation provisions), inquiries as to salary history, personnel file access, record retention, matters related to severance agreements, and more. A sound compliance program must take into account all relevant state (as well as local and federal) laws.
While, in most instances, the state and local laws of a remote worker’s primary work location govern the employment relationship, that is not true in all instances. As one example, if a small employer (two to nineteen employees) is headquartered in the District of Columbia, D.C.’s mini-COBRA law will apply to remote employees who reside outside of the District. Whether state laws apply to hybrid work arrangements will depend on the time allocated to remote work relative to the time allocated to work at an employer’s physical headquarters, as well as any nuances in state law. Generally, employees who spend the majority of their time working from a remote location will be subject to the laws of their home jurisdiction.
Practical Advice
While remote work offers great benefits, employers must pursue such engagements with great thought and care, devoting attention to both legal compliance and practical challenges that may arise in remote and hybrid work contexts. In so doing, employers should consider the following practical advice.
Audit employee and independent contractor work locations. Audit the primary work location and residence of all employees. Maintain a comprehensive list of states and municipalities where your organization employs workers or engages independent contractors.
Audit and evaluate worker classifications under relevant state laws. Presumably, nonprofit employers have classified independent contractors and employees consistent with the U.S. Department of Labor’s Economic Reality Test and the IRS Common Law Rule. As an extra and necessary precaution, evaluate each worker against the relevant state law, too, and document determinations.
Evaluate employee handbooks against state laws. Once you obtain a comprehensive list of remote work jurisdictions, engage counsel to review the organization’s employee handbook for legal form and sufficiency. Counsel can work with you to style policies that satisfy requirements of multiple jurisdictions, or where that is not possible or advisable, to include riders specific to certain jurisdictions.
Establish compliance infrastructure. Make sure you have the infrastructure in place to manage multijurisdictional compliance. Checks and balances should be implemented to ensure that “foreign” business registrations do not lapse. Revised job descriptions should be audited on a periodic basis to ensure compliance with worker classification laws. Human Resources must furnish required notices on an annual basis, or on whatever timeline is established by state or municipal law. Your payroll provider must supply appropriate tax forms to new hires and properly deduct state and local taxes. This is merely a sampling of what is involved, but an effective compliance program must be supported with an appropriate infrastructure.
Establish residency requirements: Require employees and independent contractors to obtain prior approval before relocating to a new statutory jurisdiction. This will enable the employer to evaluate whether it is equipped to comply with the laws of the “foreign” jurisdiction, and with that information, make an informed decision about whether it wants to approve or deny the request. Note that it is generally permissible for employers to prohibit their employees from working remotely from certain jurisdictions, so long as such prohibitions are imposed on an objective, consistent, and nondiscriminatory basis. Further, limit the duration in which an employee can remotely work from a different jurisdiction. Consider, for example, an employee who requests to work from an international location for two months. Here, you must take care to ensure that a casual decision does not unwittingly subject the organization to the business registration and taxation laws of the foreign jurisdiction, which, in some instances, may trigger in a matter of weeks.
Consider nonlegal implications of remote work. In addition to legal compliance, employers should think carefully about core work hours (especially where remote workers reside in different time zones), data security, remote work expectations (e.g., dress code, distraction-free environment, video camera expectations), concurrent childcare and eldercare responsibilities, and effective management and engagement strategies for remote workers. Consider adopting and enforcing a remote work policy that addresses these matters.
Review insurance coverage. Contact your insurance broker to confirm that the organization has appropriate insurance coverage for claims specific to remote and hybrid work (e.g., state employment law claims, cybersecurity attacks in remote jurisdictions).
While remote and hybrid work arrangements present many desirable benefits, employers must be careful to structure such relationships in a legally sound manner while accounting for some of the practical complexities that may arise in remote and hybrid work environments. A thoughtful, reasoned approach can nurture a healthy and productive culture, satisfy compliance obligations, and prevent problems in the future.
For more information, please contact the author at [email protected].
The sixth amendment to the European Union’s Capital Requirements Directive (Directive EU 2024/1619 or “CRD VI”) introduces a significant new hurdle for US banks lending into Europe. This article focuses on the impact of CRD VI on those US banks with a European nonretail borrower constituency that do not have a physical presence in Europe either in the form of a branch or a separately incorporated subsidiary. We also suggest some mitigating strategies banks may use to carry on doing cross-border business while remaining compliant with European requirements.
What is changing?
As of January 11, 2027, non-EU banks may only provide “core banking services” from either a local European branch or subsidiary or under an exemption set out in CRD VI (see below).
“Core banking services” include, among other things, deposit taking, lending, and issuing guarantees and commitments.
Market consensus is that, while CRD VI does not define “lending,” the term should be read widely to cover all wholesale lending, including syndicated lending and trade finance.
The activity of providing guarantees and commitments caught by CRD VI is likely to include letters of credit, trade finance facilities, and performance bonds issued in favor of EU beneficiaries.
In order to provide any core banking services as of January 11, 2027, US banks will be required to either: (a) establish a local branch—note that a branch may only operate in the country in which it is licensed and may not passport its services into other European territories; or (b) establish a full-blown subsidiary, which will benefit from a pan-European services passport.
How can US banks continue to lend into Europe without setting up a European branch/subsidiary?
The answer to this question lies in the scope of CRD VI, and in the (admittedly limited) exemptions set out in the legislation. These provide the following flexibility:
CRD VI only applies to banks: The requirement to provide core banking services through a branch or subsidiary applies only to banks or to entities that would be banks were they established in a European jurisdiction. Lending by a nonbank entity, such as a special purpose vehicle or credit fund, would not be subject to CRD VI. So it is open to a US institution to set up a nonbank lending vehicle in a jurisdiction of its choice through which to lend to European borrowers, and so fall outside the jurisdiction of CRD VI.
Inter-bank business is exempt from CRD VI’s restrictions: CRD VI provides a number of exemptions from the requirement to establish a European presence, one of which is when the core banking service is provided to another credit institution (bank). This may mean that fronting arrangements whereby an appropriately licensed European bank effects the loan to a European borrower funded through a back-to-back inter-bank relationship that falls outside CRD VI is exempt from its requirements. US banks participating in the back end of such exempt arrangements should not be subject to CRD VI requirements.
Services provided through reverse solicitation are exempt, but use caution: CRD VI exempts core banking services provided as a result of a client or counterparty’s “own exclusive initiative,” that is, as a result of reverse solicitation. As is always the case, deploying reverse solicitation as an exemption from regulatory obligations requires significant caution, not least because of the strict interpretation placed upon its use by many European regulators. However, while a scenario-by-scenario analysis is always advisable, it is possible to conceive of examples of effective reverse solicitation such as: (a) lending to an international conglomerate when the loan is negotiated, agreed, and executed outside Europe, with any European aspects of that conglomerate included as borrowers without their active participation in that process; and (b) borrowers can, of course, always approach US banks and seek loans on their own exclusive initiative. Caution will be required around subsequent offerings the bank may look at, but again, this will be a matter of a case-by-case analysis.
What happens next?
While CRD VI comes into force in January of next year, a grandfathering provision in the legislation preserves clients’ “acquired rights” in existing contracts entered into before July 11, 2026. Material variations and changes after this date will not be grandfathered, so banks should lock in as much as possible by this date. In addition, in order to facilitate the transfer of the lending arrangement to one of the alternative options compliant with CRD VI described above, banks should ensure that the shift can occur when required and without borrower consent when necessary.
It’s an approach that has transformed early-stage investing: crowdfunding. Small amounts of money can make a big difference for a business getting started or growing. In fact, a little from a lot of people can go a long way.
Crowdfunding generally refers to the process of raising large amounts of capital to finance a project or business venture through small-dollar contributions from a large number of people, typically over the internet on social media.[1]
Crowdfunding through online platforms such as Kickstarter, GoFundMe, and Indiegogo is a way to reach a broader audience and bypass traditional funding channels.[2] Initially, these websites only provided a product or a discount to an investor, on a donation or reward basis. Today, however, crowdfunding can also be used to offer and sell securities.
Traditionally, when raising capital, companies would seek options such as obtaining a small business loan, a grant, or venture capital funding. While these options remain available, crowdfunding is an opportunity to reach a broader potential investor base.
According to the U.S. Securities and Exchange Commission, Regulation Crowdfunding (“Regulation CF”) allows for eligible companies to use crowdfunding to sell securities. The Jumpstart Our Business Startups Act (“JOBS Act”)[3] established a new crowdfunding exemption from registration under Securities Act § 4(a)(6).[4] On October 30, 2015, the Securities and Exchange Commission issued its final rules to implement the crowdfunding exemption. Those rules became effective on May 16, 2016.
The crowdfunding exemption authorizes companies to offer and sell, through qualified intermediaries, limited amounts of equity securities to members of the general public who do not qualify as “accredited investors.” One requirement is crowdfunding through an intermediary, as discussed in the next section. As summarized on the Securities and Exchange Commission’s website, the other requirements are as follows:
[The rules] permit a company to raise a maximum aggregate amount of $5 million through crowdfunding offerings in a 12-month period
limit the amount individual non-accredited investors can invest across all crowdfunding offerings in a 12-month period and
require disclosure of information in filings with the Commission and to investors and the intermediary facilitating the offering[5]
Crowdfunding Through an Intermediary
If a company makes an offering for crowdfunding, it must be through an online platform. A company will only be able to engage in a crowdfunding offering through a registered broker‑dealer or a funding portal acting as an intermediary, and a company can only use one intermediary for a particular offering or concurrent offerings made in reliance on the exemption.[6] The offering must be conducted online only through the intermediary’s platform, so that the “crowd” has access to information and there is a forum for an exchange of information among potential offering participants.[7]
California’s Crowdfunding Exemption
Companies considering crowdfunding must also consider state securities laws. For example, effective as of January 1, 2022, California offers a crowdfunding exemption under Corporations Code section 25102(r). The law enables issuers to raise up to $300,000 on a funding portal through an offering conforming with federal Regulation CF[8] without a financial statement review.
There are numerous requirements for an issuer to receive a crowdfunding exemption in California, which are as follows:
The issuer must be a California corporation or a foreign corporation subject to Corporations Code section 2115;
the offering must follow the requirements of Subpart B of federal Regulation CF (except that the aggregate amount of securities sold by the issuer during the twelve‑month period preceding the date of offering, including the securities offered in that transaction, must not exceed $300,000);
the issuer need only include accounting statements certified by management rather than a review by an independent public accountant;
the issuer must take reasonable steps to ensure that each purchaser who is a natural person and not an accredited investor is able to evaluate the merits and risks of the prospective investment;
the issuer must give the purchaser a three‑day right to rescind any investment;
the issuer must not, itself or through any third party not licensed as a broker‑dealer, conduct any direct solicitation of the securities; and
the issuer must not require any investor to waive jury trials, be bound by law other than California, or file or resolve a claim or dispute in a forum other than California.[9]
Thus, while regulated, crowdfunding does have statutory exceptions that take its features into account and provide a way for eligible businesses to take advantage of an additional funding source.
Nebraska enacted LB 717 on February 25, 2026, amending multiple aspects of Nebraska consumer finance law. Among other changes, the bill expands the scope of loans covered under the Nebraska Installment Loan and Sales Act (“NILSA”) and establishes net tangible benefit disclosure requirements for installment loan companies and mortgage bankers.
Changes are scheduled to become operative three calendar months after the adjournment of the legislative session. The session adjourned on April 17, 2026, which makes the compliance date July 18, 2026.
Scope of the Installment Loan Law
The installment loan law has been amended to increase the scope of the law to now regulate loans of up to $100,000, up from the $25,000 limitation previously incorporated into the law.
The law generally continues to require an installment loan license for any nonexempt person: (a) engaging in the business of making loans; (b) that holds or acquires any rights of ownership, servicing, or other forms of participation in a loan or that engages with, or conducts loan activity with, an installment loan borrower in connection with a loan; or (c) that is not a financial institution who, at or after the time a loan is made by a financial institution, markets, owns in whole or in part, holds, acquires, services, or otherwise participates in a loan.[1]
However, loans subject to the act were previously defined as a loan or any extension of credit to a consumer originated or made with an interest rate greater than the maximum interest rate allowed under Neb. Rev. Stat. section 45-101.03 (“Interest Law”), with a minimum loan term of six months, and a principal balance of less than $25,000.[2] The maximum rate of interest under section 45-101.03 was and remains 16 percent per annum. Previously, loans of $25,000 or more were exempted from the usury limit, and thus there was no need for the license in order to assess a higher rate of interest for loans above $25,000. The amendment in LB 717 (1) removed the $25,000 cap on the loan amount under the NILSA, and (2) increased the exempted transaction amount under the Interest Law from loans above $25,000 to loans above $100,000. As a result, upon the operative date of the amendment, the NILSA will cover loans of up to $100,000 with rates greater than 16 percent.
Current Nebraska installment loan company licensees will need to adjust their processes and reporting to reflect any newly captured loans in the scope of the NILSA. Companies that do not currently hold a Nebraska installment loan license based upon the current $25,000 threshold should assess whether the amendments affect their Nebraska licensing posture and may require a license moving forward.
Net Tangible Benefits
Amendments enacted by LB 717 also established net tangible benefits disclosure requirements for refinancing loans by either a licensed mortgage banker or an installment loan licensee. While such requirements are common for mortgage loan licensees, we are not aware of similar requirements for non-mortgage consumer loans.
Installment Loans
As of the effective date, every installment loan company licensee must disclose “to the borrower, in connection with any refinance of an existing installment loan, whether or not the borrower will receive a net tangible benefit through such refinance.” Such disclosure must be on a worksheet prescribed by the Nebraska Department of Banking and Finance (“DBF”) or on a form prescribed by the DBF substantially similar to such worksheet.
“Net tangible benefit” means a benefit of a refinance that will be in the financial interests of the borrower. Net tangible benefit includes, but is not limited to:
(i) Obtaining a lower interest rate;
(ii) Obtaining a lower monthly payment, including principal, interest, taxes, and insurance;
(iii) Obtaining a shorter amortization schedule;
(iv) Changing from an adjustable interest rate to a fixed interest rate;
(v) Eliminating a negative amortization feature;
(vi) Eliminating a balloon payment feature;
(vii) Receiving cash out from the new loan in an amount greater than all closing costs incurred in connection with such loan;
(viii) Avoiding foreclosure;
(ix) Eliminating private insurance; and
(x) Consolidating other existing loans into a new loan.[3]
Mortgage Loans
Under the new requirements, as of the operative date of the amendment, a mortgage banker licensee must disclose to the borrower, in connection with any refinance of an existing residential mortgage loan, whether or not the borrower will receive a net tangible benefit through such refinance. The definition of “net tangible benefit” is substantially similar as to the definition under the NILSA.[4]
Other Amendments
Nebraska’s LB 717 also amended a number of different provisions throughout the state’s banking and finance laws beyond the scope of this article. For instance, the bill authorizes financial institutions (i.e., depositories) to institute an emergency closure in the event of cybersecurity breach; clarifies that certain small-scale “payroll processing services” are exempt from regulation under the Nebraska Money Transmitters Act; and amends various provisions related to digital assets (e.g., cryptocurrency).[5]
To mark the forty-year anniversary of the American Bar Association Business Law Section’s Mergers & Acquisitions Committee, Jorge Yanez, Gary McSharry, and Luciana Griebel, co-chairs and vice chair, respectively, of the International M&A Subcommittee, reflect on developments in cross-border M&A in the last forty years.
Over the last forty years, cross-border M&A has gone through the best and worst of times. The effects of many global economic events have affected the activity of international M&A, for better or worse. Take, for instance, the good years of the eighties, then the recession of the early nineties, the recovery during the Clinton years, the internet explosion, the dot-com implosion, the wars in the Gulf and Iraq, the subprime bubble burst and global financial collapse, the renaissance of the tech companies, the COVID-19 pandemic. All of these events affected cross-border M&A activity during the lifetime of the Mergers & Acquisitions Committee.
The Foundation of Global M&A
The mid-eighties are the clean starting point for the modern global M&A era. This is when collection of reliable statistics on global M&A began. This period was driven by deregulation, corporate restructuring, and hostile takeovers, especially in the United States and Europe. Then came the recession in the late eighties and early nineties. With this, leveraged activity stalled. However, and even though cross-border M&A was still relatively limited compared to what it is today, the foundations were being laid for the globalization wave that would follow in the mid-nineties.
In the nineties, after the world came out of recession, cross-border M&A began to explode. Liberalization of world markets after the 1994 General Agreement on Tariffs and Trade Uruguay Round, privatization trends in Asia and Latin America, the expansion of the European Union single market, and more openness in emerging markets all helped drive cross-border deals. This is the period that saw multinationals expand internationally through acquisitions, rather than start-ups. Around the world there was a sense and need to shape local laws to be more friendly towards cross-border transactions. On the other hand, emerging markets saw the need to adopt new regulations in areas like energy, antitrust, and telecoms to protect internal markets from the wave of new investment and acquisitions. In this period, and contrary to what would be expected, the EU had a more active role in global M&A than the United States or Asia. International M&A became so relevant that the M&A Committee formed a subcommittee dedicated to cross-border transactions.
From Dot-Com Reset to Record Activity
The late nineties, in anticipation of Y2K, came with a flurry of deals focused on telecoms and media. The dot-com era detonated. Transactions focused on these industries were overvalued. This period established the idea that M&A was no longer about buying competitors at home. It had become a tool for global expansion, capability acquisition, and market access. After the tech bubble burst, M&A activity weakened, especially in sectors that had relied on inflated equity valuations. This was a reset period. International M&A suffered a decline. Public companies and sophisticated investors turned to international markets that were not affected by the tech disaster and focused on acquisitions in industries that had more tangible value, like food & beverage, consumer products, steel, and diversified industrials.
With the correction of the markets in the post-bubble years came tranquility, however. This is when the International M&A Subcommittee (“IMAS”) took shape and was formed. With a heavy dose of Canadian lawyers and U.S. members with cross-border practices, the IMAS came to life. Soon members of the M&A Committee from the United Kingdom, the EU, Asia, and Latin America joined to expand the membership.
The five-year period preceding the 2008 subprime crisis witnessed a huge increase in international M&A activity. Low interest rates, lots of liquidity, a renewed interest in globalization that surpassed the one that took place in the mid- and late nineties, and the increase of private equity investment helped this new surge in cross-border activity. 2007 was a record year for cross-border activity, with the highest deal value in history up to that year; it was the pre-subprime-crisis high water mark. The IMAS increased membership not annually but with each meeting. The IMAS also began to engage in publication projects for the ABA; the very first project was the International Due Diligence Manual.
The 2008 Financial Crisis Changes Cross-Border M&A Practice
The “fat cow” period of cross-border activity after the correction of the dot-com burst ended with the subprime crisis in 2008. The financial crisis sharply interrupted the growth cycle. The start of 2008 had been very promising; cross-border acquisitions numbers were strong in the first three quarters of the year. Then, in the last quarter of 2008, all came falling apart like a house of cards, with lingering effects in 2009. The world stopped. Deals in the making stopped due to the financial markets. Huge consortiums and groups that based their activity on leveraged acquisitions had to adjust. However, these troubled times also brought opportunities for investors and large companies to acquire businesses in distress. The value of deals fell sharply, but cross-border activity continued as opportunities were evident for distressed M&A deals.
The subprime crisis brought other positive effects to cross-border M&A. Activity recovered, but with more discipline: Acquirers were focused on due diligence and looked at every detail. This had a huge effect on cross-border M&A legal practice. Transaction documents evolved, and new clauses were inserted in cross-border deal documentation. Representations and warranties in purchase agreements of businesses with operations in different jurisdictions took on more relevance than before. With discipline, mega deals came back. There was a high number of divestitures, as global companies understood that they had to focus on core business growth. In the 2010s, the IMAS engaged in two more publication projects for the ABA: (i) the International Joint Venture Review; and (ii) the updated version of the International Due Diligence Manual.
Pandemic Shock and Technology-Assisted Rebound
Times were good again for international M&A until 2020 and the COVID-19 pandemic, a global event, which influenced the way deals were made. The pandemic caused a deep immediate shock to the markets and a normal and understandable decline in cross-border deals, but once technology and tools to manage long-distance negotiations were available, activity rebounded and came back to normal quickly.
The rebound came so fast that 2021 became the new record year for international M&A activity. The tools available to M&A practitioners made things significantly easier, and growth in data centers and crypto helped fuel the surge in deal activity. This is the period in which artificial intelligence started to play a role in the creation of legal documents. Private equity also became a huge player, making the contrast between conventional M&A and PE M&A wider. International M&A also became selective, focusing on regions that showed progress and respect to the rule of law.
Looking Forward
Predicting the future of international M&A is a complex endeavor. The trends in M&A, especially those involving cross-border transactions, are heavily influenced by global events. These external factors can rapidly shift the landscape, making long-term forecasting particularly difficult. Still, there are some long-term trends to point to. Over the last forty years, globalization has largely prevailed over nationalism. This shift has had a decidedly positive impact on international M&A activity, facilitating deals and partnerships across borders. The dominance of globalization has enabled companies to expand their reach and has encouraged the growth of cross-border transactions. Looking forward, artificial intelligence is poised to have a significant influence on the M&A legal practice. In the coming decades, the advancements brought by AI will shape how legal professionals approach and manage M&A transactions. The evolution in the past forty years in international M&A will be modest compared to the dramatic changes that could take place in just half that time in the future driven by technological innovation.
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