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A Review of Director Fiduciary Duties

by Kelli E. Madigan, Shareholder

Quadrant v. Vertin

In Quadrant v. Vertin, a derivative action for breach of fiduciary duty was brought by Quadrant Structured Products Company, a creditor, against the directors of Athilon Capital Corp. (“Company”) and the Company’s controlling shareholder, EBF & Associates. Quadrant also asserted fraudulent transfer claims directly against Company and EBF, as the Company was insolvent at the time actions giving rise to the claims were taken.

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Is Your Investment Advisor Subject to the Fiduciary Standard?

by Kelli E. Madigan, Shareholder

Department of Labor proposed new more stringent rules on persons giving investment advice, including retirement account advisors, broker-dealers, and insurance agents.  Specifically, the new rules are an expansion of the definition of “fiduciary” and a modification of the existing “fiduciary standard” under the Employee Retirement Income Security Act.  The expanded definition of fiduciary would now include many investment advisors, such as 401K plan advisors, IRA investment advisors, broker-dealers and insurance agents, to whom the fiduciary standard did not previously apply.

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Business Law Basics: Buy-Sell Agreements

by Joseph R. Harvath, Associate

A buy-sell agreement is an agreement that governs the sale of stock in a corporation.  The agreement can come in many different forms, and it may be limited or fairly general in scope. Examples of the different types of buy-sell agreements include the following: agreements that merely limit the power of a shareholder to sell stock with consent of the board of directors or other shareholders; agreements that allow other shareholders to purchase stock or provide a right of first refusal; and agreements that impose a duty on shareholders to buy the stock of any shareholder who dies, is adjudicated incompetent, or retires or otherwise withdraws from the business.

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Illinois Inheritance Tax and Estate Planning

by Kevin J. Richter, Shareholder

The Illinois Inheritance Tax has become an important estate planning aspect that must be factored in to larger estates.  The current exemption of $4 million applies to each individual and may not be coupled with the other spouse.  Therefore, unlike the federal exemption, the Illinois Inheritance Tax cannot be “carried over” to the surviving spouse.

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Accountant’s Privilege and the Illinois Public Accounting Act

by Kevin J. Richter, Shareholder

A recent Illinois Supreme Court case dealt with the application of the accountant’s privilege. The Illinois Public Accounting Act at 225 ILCS 450/27 provides that “A licensed or registered certified public accountant shall not be required by any court to divulge information or evidence which has been obtained by him in his confidential capacity as a licensed or registered certified public accountant. This Section shall not apply to any investigation or hearing undertaken pursuant to this Act.”

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